This blog summarizes key takeaways from our fiscal resiliency podcast series, episode four.
As fiscal challenges (including the COVID-19 pandemic) continue to disrupt the higher education landscape, colleges and universities need all the insights on available options they can get these days. Meeting the academic, health and safety needs of students, faculty and staff, while also ensuring fiscal resiliency and available liquidity, requires institutions to take a strategic approach to aligning resources through proactive enrollment and fiscal management lenses.
As a college or university’s governing body, the board of directors or trustees bears a large responsibility for overseeing institution sustainability and fiscal resiliency. The perspective, involvement and leadership of a board is as critical as ever as institutions navigate the current environment.
In many ways, boards are facing a perfect storm. Issues that have been brewing for years have now combined with the ongoing pandemic to impact operations, enrollment and financial performance in a way that may be overwhelming for some institutions. As a result, institution leadership is left trying to proactively improve short and long-term liquidity, which often results in their seeking guidance from board members when options are not obvious, and/or needing advocacy when options require difficult decisions. Frequently in these trying times, both board members and senior leaders find themselves pondering the question, “What do we do now?”
A top priority for any institution of higher education is ensuring the success of its students. More and more, students’ perspectives include looking at college in terms of value – what value does the institution bring, what value are they receiving for the money they spend, and are they receiving the basic necessities (health, safety, etc.) that empower them to focus on the value-added aspects of education?
Board members must consider the student perspective when exploring options for enhancing liquidity and fiscal resiliency, and consider questions such as:
Seeking answers to these crucial questions is one of the most critical roles a board member can play in guiding strategy and initiating the process of transforming an institution into one that will not just survive the pandemic, but will take this moment to change for a stronger, more resilient future.
The first key to effecting change from a board perspective is being honest and objective. What has been done to sustain or grow enrollment in the past? Is it working? Is the board truly supporting institutional decisions that help to meet student needs? Is the institution offering education at an affordable cost while remaining fiscally responsible and sustainable?
With these questions in mind, the following are two important mindsets for board members to adopt.
Board members should review the institution’s strategic priorities and continue progressing toward defined outcomes annually, for both opportunities and potential downsides. Today’s problems likely cannot be fixed by the passing of time or increasing tuition. Now is the time to examine fiscal strategies and evaluate all potential solutions from the perspectives of student success and institutional sustainability.
Only you and your fellow leaders know when it’s the right time for change. And truthfully, you only know that it’s time if you’re continually reviewing key drivers from a strategic perspective. Immerse yourself in intimately understanding the fiscal drivers that are critical to your institution’s, and your students’, success – and stay on top of these, consistently – so that if one or more of these indicators begin to falter, then you can change course. That is when you’ll know it’s time for change.
At Baker Tilly, we have tomorrow’s discussions today. Connect with us to discuss ways we can help your institution make strategic change to support fiscal resiliency.