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Where was the board?
Inside HigherEd reports that the Stevens Institute of Technology in New Jersey is being sued by the state for breach of fiduciary duty. According to the story, the complaint alleges that Stevens' president along with the chair and two vice-chairs of its board of trustees spent the university's endowment contrary to donor intent and board guidelines and improperly compensated the president, all the while concealing Stevens' deteriorating financial position from the rest of the board.
Although the full picture has yet to emerge, one thing is clear. Trustees have a fiduciary responsibility to ask questions and get answers. This case is an important lesson to all trustees and donors that good governing structures and careful monitoring are essential to ensure that endowments and other gifts are not misused.
Cole R. Milliard is an intern at ACTA and a third-year law student at The Catholic University of America's Columbus School of Law.
Posted by Anne D. Neal on September 18, 2009 at September 18, 2009 06:00 PM
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