Sudbury letter: Laurentian's board has failed in its duties and should be replaced

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As details continue to emerge highlighting how Laurentian University arrived at the mess it is in today, and what its future may hold, we are seeing university administration (and their legal counsel) square off against faculty and other academic staff over where the blame should be assigned.

In reality, both parties are guilty of contributing to the mess we witness today. University administration controls the purse strings and failed to properly oversee the university’s affairs.

Many (but certainly not all) faculty members and academic staff, meanwhile, continue to draw substantial salaries to maintain a myriad of unpopular and mediocre programs. As the Report of the Proposed Monitor notes, “the majority of (the university’s) students are enrolled in a relatively small subset of programs. A large number of programs have consistently low enrolment and are not financially sustainable.”

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Putting aside the substantial culpability of each party for the time being, however, my question is a simple one: where has the university’s board of governors been throughout all this?

By way of background, a university’s board of governors is responsible for setting the high-level governance and management objectives of the university, which university administrators are then ultimately responsible for carrying out.

Each governor has a “fiduciary duty” to the university; that is to say, an obligation to act honestly and in good faith with a view to the best interests of the university, as well as to exercise the level of due diligence, care, and skill, that any reasonably prudent person would exercise in a similar situation.

Put simply, this means that each governor is expected to act in the best interests of the university, and to show a level of care and skill in overseeing the university’s affairs that any other reasonable person would exercise if they were in that governor’s shoes.

There’s no question that insolvencies and bankruptcies happen to businesses every day, even to the most prudent actors. The hard truth is that sometimes businesses fail, and no degree of care or skill could have prevented that failure.

This is not the case for Laurentian, a large, semi-public institution backstopped by hundreds of millions of dollars of grants, donations, and government funds. The board of governors would have been presented the university’s year-end financial statements each year, which clearly show continuous year-over-year deficits and growing and material debt levels during the previous decade.

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Were they simply ignoring this alarm as it grew steadily louder, year after year? The reason so many commentators have called this situation unprecedented is, because frankly, allowing this to happen while playing (at least partially) with house money is completely preventable and totally inexcusable.

If you owned a business, and you learned at the end of the year that your business had lost a substantial amount of money, would you not make adjustments to address the causes of these losses? Would you not tighten your belt and cut unnecessary expenses?

Moreover, if these losses persisted for several years, would not take drastic action to save your business and protect those who are relying on you?

Yet Laurentian’s board of governors has been receiving warnings for numerous years that the university was travelling down this dangerous path and still failed to prevent it. While any reasonable person would have taken drastic action years ago to right the ship, the board of governors did not. They did, however, green light a variety of new and expensive capital projects.

It is a fair question to ask if the governors met their fiduciary duty to the university to carry out their obligations with skill and care. Regardless, the board has failed to safeguard the university and all of its members should resign immediately. They should make way for individuals who are prepared to make the tough decisions to save this university and the incredible contributions it makes to our community.

Robert Zamora

Sudbury 

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