Auburn University

Edward R. Richardson, Interim President

Office of the President

107 Samford Hall

Auburn University, AL 36849

Response to the Report of the Special Committee

September 28-30, 2004

Prepared by:

Linda S. Glaze

Accreditation Liaison and Co-Director of Self Study

and

John G. Heilman

Senior Presidential Advisor

November 12, 2004

SECTION 1.1: Institutional Commitment and Responsibilities in the Accreditation Process

RECOMMENDATION 1: The Special Committee recommends that the request made by the Commission on Colleges be completed: that each member of the Board of Trustees of Auburn University, including the new members, certify in writing that he or she is committed to the accreditation process, that Auburn University will cooperate in all aspects of the process of evaluation, and that it will maintain an atmosphere of openness and cooperation during evaluation.

COMMITTEE CONCERNS:

The Special Committee cited numerous steps that the University has taken to demonstrate its commitment to the accreditation process. In particular, the Committee observed the openness and cooperation exhibited by all constituencies during the Special Visit and the University’s decision to dismiss legal action against SACS and its willingness to participate in the process to vacate the lawsuit. In addition, the Special Committee cites the positive nature of the May 7, 2004 Board Resolution. However, the Special Committee expressed concern that the language of the resolution “only partially covered the requested action” (Report of the Special Committee, p. 7).

INSTITUTIONAL RESPONSE:

On November 12, 2004, during a regularly scheduled meeting of the Board of Trustees, the individual members of the Board of Trustees certified in writing their commitment to the accreditation process and to the maintenance of an atmosphere of openness and cooperation as an indication of their cooperation with the evaluation process. Each member signed the following statement:

AUBURN UNIVERSITY BOARD OF TRUSTEES

CERTIFICATION OF COMMITMENT TO ACCREDITATION PROCESS

As a trustee of Auburn University, I understand the importance to the University of the accreditation process. I affirm that I am committed to the accreditation process. I further affirm that for as long as I serve as a trustee of Auburn University, I will cooperate in all aspects of the accreditation process of evaluation and will do all that is within my power to maintain an atmosphere of openness and cooperation for myself and for Auburn University.

Signed: _______________, Member

Auburn University Board of Trustees

{Copies of the individually signed statements are included with this response.}

SECTION 1.4: Condition of Eligibility-Governing Board

RECOMMENDATION 2: The Special Committee recommends that the Board of Trustees take appropriate actions to ensure that it lives up to its own Code of Ethics and that the Board is not controlled by a minority of its members.

COMMITTEE CONCERNS:

In relationship to Condition of Eligibility 3 from the Criteria for Accreditation, the Special Committee reviewed the four requests included in the Commission’s letter dated December 17, 2003. The Special Committee found that the institution met three of the four requests; namely, that it (1) provided sufficient documentation related to the appropriate roles of the President and Board; (2) demonstrated that neither the presiding officer of the Board nor the voting members have any inappropriate business relationship with the institution and (3) demonstrated that the new trustees have been confirmed and have begun to fulfill their responsibilities as Board members.

Although the Special Committee acknowledged “the major changes that the Board of Trustees has made toward satisfying” the Commission’s fourth request, specifically, “documentation that the Board is not controlled by a minority of Board members,” the Special Committee expressed concern that the documentation provided was not satisfactory. In reaching this conclusion, the Special Committee stated that it heard complaints about the disclosure process included as part of the Code of Ethics and about the existence of business relationships, but only specifically cited the relationship between two of the fourteen members of the Board of Trustees that “appear to violate the Board Code of Ethics” (Report of Special Committee, p. 11).

INSTITUTIONAL RESPONSE:

Although the institution welcomes the constructive advice inherent in the peer evaluation process, Auburn University believes that it has met the Commission’s request to “provide documentation that the Board is not controlled by a minority of Board members” (Report of Special Committee, p. 9). It may be helpful to put the University’s actions in response to the Commission’s concerns in context. The Commission and the University agreed to the appointment of an independent investigator to review several issues including relationships between Trustees. The independent investigator twice reported upon the relevant relationships in reports which have been submitted by the investigator to the Commission.

In its introductory commentary, the Special Committee has noted that “he [Interim President Richardson] and Board President Pro-Tempore McWhorter have worked effectively and tirelessly to move people, processes and policies in new directions consistent with the recommendations of the Commission on Colleges. The President and Board of Trustees, working together, have made decisions and passed an unusually large number of resolutions completely relevant to the concerns of the Commission on Colleges” (Report of the Special Committee, p. 6). Among the accomplishments that the Special Committee cited in its report are the following actions: 1) the amendment of the existing “Conflicts of Interest Policy for Auburn University Board of Trustees” into a “Code of Ethics”; 2) the development of an “Auburn University Board of Trustees Code of Ethics Compliance Form”; and 3) the establishment of an Audit Committee charged with monitoring compliance with the Code of Ethics, one of its nine responsibilities defined in the Charter.

In revising its “Conflicts of Interest Policy for Auburn University Board of Trustees,” the Board of Trustees largely tracked the guidelines that are included in the Criteria for Accreditation and that are incorporated into the new Principles of Accreditation, as well as the guidelines set forth by the Association of Governing Boards in its publication entitled Board Basics: A Guide to Conflict of Interest and Disclosure written by Richard T. Ingram. The second clause from the Code of Ethics confirms this: “WHEREAS, in accordance with accreditation requirements and emerging principles of institutional governance, the Board of Trustees now wishes to bolster such previously adopted Conflicts of Interest Policy, to rename such resolution as ‘Code of Ethics,’ and to recommit itself to the principles reflected therein. . . ” (Auburn Board of Trustees Code of Ethics, adopted May 7, 2004). In particular, the Board incorporated specific language, similar to that found in both the Criteria and Principles, into the Code of Ethics, which was adopted unanimously by the Board of Trustees in a roll call vote at its May 7, 2004 meeting. Pertinent sections from the Code of Ethics follow with phrasing related to the Commission’s standards underlined.

1. A member of the Board of Trustees shall, when making decisions in that capacity, exercise independent judgment so that no minority cohort of the Board, or organization or interest separate from the Board, controls the decisions of the Board, and accordingly, such that the sole concern of each member is the benefit of the institution.

2. A member of the Board of Trustees shall not use his or her position on the Board of Trustees of Auburn University to profit financially from any service on the Board of Trustees, except by receiving normal and customary reimbursement for expenses for service as a Trustee.

3. In order to avoid any potential or real conflict of interest involving the position of a Trustee of Auburn University and any business or economic interest which said member of the Board has, the board member shall fully and publicly disclose said interest and will not participate in the discussion, debate, or voting upon said matter. Said disclosure shall be duly noted in the minutes of the meeting of the Board of Trustees or committee, if appropriate. The Board of Trustees, or a duly charged committee thereof, has the responsibility for administering the disclosures required in this Code of Ethics.

The compliance form that the Board of Trustees adopted at its June 10, 2004 meeting also includes the following statement which parallels language from the Criteria and the Principles: “I further certify that I have ______ do not have _____ any contractual, employment, personal or familial financial interest in Auburn University” (Auburn Board of Trustees Compliance Form, adopted June 11, 2004).

Besides incorporating in its Code of Ethics specific language from the Criteria and Principles, the Board of Trustees also established principles to address business and professional relationships among Board members. These principles go well beyond the requirements of the Commission on Colleges. First, Board members must certify that they “have no business or professional relationship with any other board member or any entity affiliated with any other board member which constitutes a violation of any provision of the Code of Ethics” (Auburn Board of Trustees Compliance Form, adopted on June 11, 2004). Second, if Board members have any business or professional relationships with other Board members, they must disclose those relationships and certify that “all such relationships are on terms no more favorable . . . than the terms that are usual and customary in the ordinary course of comparable business or professional relationships.” Finally, Board members must certify their promise to sever even “usual and customary” business or professional relationships – or to resign from the Board – should there be any effort to influence the “independent judgment” that Paragraph 1 of the Code of Ethics requires Board members to exercise. Each of these certifications is made on penalty of perjury. Auburn University contends that these requirements of the Board’s Code of Ethics, both in design and in implementation, at a minimum meet and actually exceed the accreditation standards of the Commission on Colleges.

On August 12, 2004, the Audit Committee of the Board of Trustees met. Among its responsibilities, the Audit Committee is charged to review the compliance forms. The Special Committee was provided copies of the individual compliance forms and the Minutes from the August 12 meeting of the Audit Committee. Based upon the Special Committee’s review of these documents, it appears that the Special Committee has concluded that Auburn University has failed to provide sufficient documentation to demonstrate that the Board is not controlled by a minority of its members.

The institution wishes to provide clarification on the following information that has been presented as documentation that the Board is not controlled by a minority of its members.

1) First, according to 3.1 of the Audit Committee Charter, approved at the June 11, 2004 annual meeting of the Board of Trustees, “the Committee shall be comprised of three (3) Trustees, appointed by the President Pro Tem, each of whom shall be independent Trustees and free from any relationship that, in the opinion of the President Pro Tem, would interfere with the exercise of his or her independent judgment as a member of the Committee.” The members of the Board of Trustees who are appointed to the Committee should also: “. . . have a working familiarity with basic finance and accounting practices, and at least one (1) member of the Committee shall have accounting or related financial management expertise. Committee members may enhance their familiarity with finance and accounting by participating in educational programs conducted by the University or an outside consultant” (Auburn University Board of Trustees Audit Committee Charter, approved June 11, 2004).

Mr. McWhorter, the President Pro Tem, serves on the Audit Committee. He appointed the remaining two Audit Committee members, Mr. Charles McCrary and Ms. Virginia Thompson, from among the five most recently added members of the Board. Ms. Thompson serves as Chair of the Audit Committee. According to the website of the Board of Trustees (http://www.auburn.edu/administration/trustees/members.html), Mr. McCrary is the President and CEO of Alabama Power and has earned a J.D. from the Birmingham School of Law. Ms. Thompson is currently marketing director of East Alabama Medical Center and previously worked for accounting firms in the Mobile area. Thus, both Mr. McCrary and Ms. Thompson have the business and accounting background to provide an independent evaluation of the compliance forms.

In the discussion related to the appointment of the five new members of the Board, the Special Committee observes that “[a]lso, there were convincing reports from faculty, staff, students and alumni that the appointment and participation of the five new Board members is a positive move toward dispersing power and influence among board members” (Report of Special Committee, p. 12). [In fact, there are six new members if one includes Governor Riley, who took office in 2003.] This observation further indicates the independence of the newly appointed board members. The two new members, Ms. Thompson and Mr. McCrary, along with Mr. McWhorter, concluded in the August 12, 2004 Minutes of the Audit Committee that “Board Members are in compliance” after carefully reviewing the individual compliance forms of all the Board members.

2) It should be noted, with regard to the minority control issue, that even if one trustee yielded power over all the relationships identified on the ethics compliance forms, the number of influenced trustees, including the controlling trustee, would not constitute a majority of the entire Board. Furthermore, according to Section 4.8 of the Board of Trustees Bylaws, “all matters considered by standing or special committees shall be reported to the Board with an advisory recommendation for action by the Board. The report shall include a summary of committee members’ comments on the matters reviewed and suggested for further administrative action.” Therefore, Board action must result from a decision of the whole and cannot result from a minority of the Board.

3) In order to document the President’s control of intercollegiate athletics (Criteria 5.5.2), Auburn University provided the Commission with a summary of actions taken in the June 2004 Progress Report. In addition to the actions personally undertaken by Interim President Richardson to establish institutional control, the Board of Trustees eliminated the Athletic Committee of the Board of Trustees and adopted a Policy on Intercollegiate Athletics. In the Progress Report submitted to the Commission on Colleges in June 2004, the institution noted that “[t]hese actions are important because they (1) abolish a committee which some saw as institutionalizing minority Board control over athletics” (Auburn University June 2004 Progress Report, p. 30). Having reviewed the actions taken by the University in terms of Intercollegiate Athletics, the Special Committee has concluded that “Auburn University has documented evidence showing that “the ultimate control of the athletics program rests with the Chief Executive Officer” (Report of Special Committee, p. 14). By eliminating the Athletic Committee and instituting a Policy on Intercollegiate Athletics, not only did the institution address perceived problems with athletic control, it also eliminated the perception that a minority of the Board, through the Athletic Committee, controlled the entire Board.

4) Although the institution believes that the first clause of Recommendation 2 should be considered a suggestion in that it does not refer to any written policy included in Section 1.4 (Condition of Eligibility 3) in the Criteria, Interim President Richardson has recommended that the Board take two actions in response to the Special Committee’s concerns. First, Dr. Richardson, though confident in the Audit Committee’s ability to evaluate member compliance with the Code of Ethics, wanted to give complete consideration to the Special Committee’s conclusion that the compliance forms reveal a lack of compliance with the Board’s own policy and thus, a failure to comply with the minority control criterion. Accordingly, he has asked the members of the Audit Committee individually and without consulting with any other Audit Committee member to revisit their judgment in that regard. The members of the Audit Committee have completed the requested review and have affirmed their original conclusion that all Board members are in compliance with the policy and that, in fact, no minority cohort of the Board controls the entire Board. At the time of the November 12, 2004 meeting of the Board, each member of the Audit Committee signed the following affirmation:

AFFIRMATION

I, ______________, am a member of the Audit Committee of the Auburn University Board of Trustees and was present at the Audit Committee meeting on August 12, 2004. At that meeting, the Committee found after review of the information on the “Auburn University Board of Trustees Code of Ethics Compliance Document” and a discussion concerning that information, that a minority of Board members did not control the majority. My signature below affirms that as an individual committee member and without consulting with any other Audit Committee member, I have again reviewed those forms and discovered no additional information that would, in my opinion, warrant additional Committee action.

_____________________________________

( Name )

Member, Audit Committee

{Copies of the individually signed statements from the Audit Committee are included with this response.}

Second, in the spirit of cooperation with the accreditation process, the Board of Trustees has resolved to comply fully with the additional steps recommended in the Special Committee’s Report. To that end, the Board of Trustees approved the following resolution at its November 12 Board meeting.

EXECUTIVE COMMITTEE

RESOLUTION

AUTHORIZATION FOR EXTERNAL INDEPENDENT REVIEW

WHEREAS, Auburn University and the Board of Trustees have received the report of the Special Committee of the Commission on Colleges of the Southern Association of Colleges and Schools related to Auburn University's probationary status;

WHEREAS, Auburn University and the Board of Trustees are fully committed to the accreditation process, a commitment that each Trustee has acknowledged in a separate writing signed today;

WHEREAS, Auburn University and the Board of Trustees are committed to full disclosure to the Auburn community and to the public of Auburn University's status with respect to probation;

WHEREAS, Auburn University and the Board of Trustees will comply fully with the additional steps recommended in the Special Committee's Report;

NOW, THEREFORE, BE IT RESOLVED that Interim President Edward R. Richardson, or such other person who may be acting as President, be, and he hereby is, empowered to select one or more appropriate external, independent organizations to determine if business relationships of members of the Board are in compliance with (I) the Board Code of Ethics and (ii) other reasonable ethical practices, and to suggest appropriate remedial actions, if any are advisable.

This resolution authorizes the President to appoint one or more independent, external reviewers whom he will ask to review the compliance forms and report their independent judgements concerning compliance and to suggest remedial action if any. The President is establishing the process for selecting a representative individual from the reviewing organization(s) with the strong intention of completing such review in time to report the results to the Commission at the 2004 Annual Meeting. The President is committed to completing this review in accordance with the Special Committee’s suggestions and has committed all available resources to that goal.

5) Finally, on November 2, 2004, Governor Riley issued a letter calling for nominations for one of the at-large positions that will be vacated by Ms. Golda McDaniel in February 2005. In his letter, he outlines the process for Trustee selection found in Amendment 670 of the Alabama Constitution: “The process begins with a five-member Trustee Selection Committee, consisting of two members from the Board of Trustees, two members from the Auburn University Alumni Board and the Governor or his designee. This committee will nominate individuals for the open seat to the board.” According to his letter, “[t]he committee will begin the process of interviews and finalizing a selection as soon as possible, following the submission due date. Please submit nominations and relevant information by Friday, December 10, 2004 (the Committee may accept nominations up until the interview dates). . . .” [The letter can be found in its entirety at the following web address: http://www.auburn.edu/administration/trustees/govletter110204.html.]

Upon the appointment of the third at-large Trustee during the legislative session commencing in February of 2005, half of the Trustees will be newly appointed to the Board. They are (1) Governor Bob Riley, (2) Mr. Charles Ball, (3) Dr. Dwight Carlisle, (4) Mr. Charles McCrary, (5) Ms. Sarah Newton, (6) Ms. Virginia Thompson, and (7) the at-large Trustee to be selected. It should also be noted that the State Senate must confirm or deny such nominations. The confirmation is for a fixed seven-year term of office, and there is no provision in the Alabama Constitution for the removal of a Board member.

In sum, Auburn University believes that it has demonstrated that it is in compliance with the requirement from Condition of Eligibility Three (Section 1.4, Criteria for Accreditation) that “the Board must not be controlled by a minority of Board members.”

SECTION 6.1.5: Organization and Administration-Administrative Organization

RECOMMENDATION 3: The Special Committee recommends that the President of Auburn University be formally evaluated before July 1, 2005.

COMMITTEE CONCERNS:

“In its review and interview process, the Special Committee found that there apparently had not been a formal evaluation of a President of Auburn University for nearly a decade or more. This means that the Board of Trustees did not formally evaluate any of the last three Presidents of the University” (Report of Special Committee, p.18).

INSTITUTIONAL RESPONSE:

As part of the 2003 Self Study process, the Steering Committee made the following recommendation: “The Steering Committee recommends that procedures to periodically evaluate all administrators be developed and put in writing and practice and a formal procedure for evaluating the chief executive officer be implemented” (Self Study, VI-16). The following response related to the evaluation of the chief executive officer was developed during the tenure President William Walker and was included in the Addendum that the institution provided to the Visiting Committee in February of 2004:

The evaluation of the President is the responsibility of the Board of Trustees, which is charged with hiring, evaluating, and terminating the President. The Office of the President has discussed this recommendation with the President Pro Tempore of the Board of Trustees, and the following approach reflects those discussions. The Board of Trustees will develop a plan to evaluate the President, taking into account the Association of Governing Boards’ guidelines on evaluation of the chief executive officer and other relevant literature. The expectation is to have this plan developed by the end of the spring 2004, for implementation in the 2004-2005 academic year.(Addendum, p. 83)

At the November 12, 2004 meeting of the Board of Trustees, the Board reconfirmed its commitment to develop and implement a process of evaluating the President by the passage of the following Resolution:

EXECUTIVE COMMITTEE

RESOLUTION

PRESIDENTIAL EVALUATION

WHEREAS, Southern Association of Colleges and Schools (SACS) criteria requires that the effectiveness of all administrators, including the chief executive officer, must be evaluated periodically and the SACS Special Committee Report includes a recommendation that “the President of Auburn University be formally evaluated before July 1, 2005;” and

WHEREAS, the Board of Trustees is committed to the accreditation process and to meeting the accreditation criteria.

NOW, THEREFORE, BE IT RESOLVED that the Board of Trustees will formally evaluate the President before July 1, 2005, and the President Pro Tempore will develop and lead the evaluation process.