Boards of trustees, agency problems, and university output

Abstract

The analysis and empirical evidence in this paper indicate that the structure of the boards of trustees of state universities influences the provision of higher education. The structure of the boards is important because it helps to define the constraints on the board members and on the internal agents of the universities. An implication of this study is that public universities can be made to function more like private ones by placing them under separate governing boards. These results are especially interesting when examining the trends regarding board structures. The trend over this century across the states has been toward increasing the number of universities under the jurisdiction of a single board. This analysis suggests that the trend is a response to political pressure from educators, not from taxpayers and consumers of higher education.