UVa’s “Agency” Problem

by James A. Bacon

Last week the Ryan administration presented a graph to the Board of Visitors showing how tuition & fees for undergraduate Virginia students is lower at the University of Virginia than at any other Top 50 higher-ed institution in the country. As we noted in our post last week, the comparison comes with so many caveats as to be useless. But the implication was obvious as the Board undergoes the three-month process of setting tuition & fees for the next two years: UVa is a bargain.

But maybe not. UVa officials have long basked in the university’s reputation as one of the “best values” in higher-ed. That reputation takes a beating in a new Wall Street Journal ranking of “best values” based on a calculation of how many years it would take for someone earning the median earnings 10 years after graduation to pay off the net cost of attendance over four years. UVa ranks 74th nationally.

Rankings vary widely depending upon how they are constructed, so the WSJ exercise in calculating educational value should be taken with a grain of salt. Public universities, which draw their student bodies disproportionately from smaller pools of talent in the states they serve, are at an inherent disadvantage compared to elite institutions that recruit nationally. UVa fares better in rankings using different methodologies. But the Journal’s ranking should puncture any illusions that UVa offers a uniquely compelling educational proposition.

When administrators share graphs like the one showing UVa as a spectacular bargain, it behooves students, parents, alumni and above all the Board of Visitors to understand the motives of those presenting the information. They are invested in protecting the status quo — a status quo that is largely geared to serve their interests, values and priorities.

In making that assessment, I am not singling out President Ryan and his leadership team for invidious comparison with any other university leadership. Higher education has a systemic governance issue. Economists call it the “agency” problem. In essence, the interests of “management” — the administrative leadership of colleges and universities — are not necessarily aligned with the interests of other stakeholders. In the corporate world, governance structures have evolved to ensure that management interests align with those of shareholders. No such structures have emerged in higher ed, in part because nonprofit universities have no shareholders.

University presidents invariably are paid well, but they aren’t in the game for the money. Men and women of their leadership caliber most likely would make bigger paychecks in the private sector. They have other motivations — prestige and ideology. Senior university leadership enjoy prestige that is commensurate with the status of the institutions they serve. Accordingly, their incentive is to increase the prestige of those institutions; other considerations, such as affordability for the middle class, are secondary. University leaders also see themselves as social change agents, invariably with a left-of-center world view. Thus, at UVa, Jim Ryan’s definition of making the university “great and good” means pursuing leftist social-justice and environmental goals at the expense of more traditional objectives.

This doesn’t make members of Team Ryan bad people. It just means that members of the Board of Visitors need to be attentive to how their interests are not necessarily aligned with those of the institution or the Commonwealth of Virginia. Accordingly, board members should be sophisticated consumers of the information they are presented and exercise an appropriate level of skepticism.

Of course, none of these matters were explored last week during the discussion, led by former Bowdoin College President Clayton Rose, about Board of Visitors “best practices.” That discussion focused exclusively on how board members should behave. Rose uttered not a word of the agency problem, not a word about the president’s responsibilities.

Whose interests were served by the way that discussion was framed? Perhaps Board members should ask that question as well.

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Walter smith
Walter smith
3 days ago

Great and Good is a secular humanist manifesto and had no business being adopted, and implemented, by the Board. An abdication of educational duty and duty to citizens of Virginia, and people of the world with respect to Jefferson. “We hold these truths to be self evident…” Greatest human words written

2 days ago

Thank you Mr. Bacon for such a well written and spot on article as to zeroing in on who Ryan actually is and what the BOV is facing. As to Ryan I will go further in pointing out the obvious. He is a high priest of the leftist woke cult which seeks to remove any dissenting voice by way of tactics that are designed to shame into submission as exemplified by this sermon as given by this dude Rose as to civility(i.e. conformity). At UVA this segues nicely as to the long standing tradition of the “Virginia gentleman.” His sermon to the BOV, in a nutshell, “now run along be nice little boys and girls and let Father Jim do his thing.”
This current Ryan-BOV dynamic is simply once again a demonstration of the societal codependent dynamic that has plagued our nation for many years in that you have two groups. On the left maniacally driven toward destruction of long standing institutions while on the right those who rightfully oppose this but who at the same time want to be liked and who easily fall prey to the left’s tactic of “you need to be nice.” A very unhealthy codependency which can only be remedied when those on the right acknowledge their unhealthy need to be liked and choose then to stand up to the blatant idiocy of the left. There was a time when even they privately acknowledged their identity as “useful idiots” but that went out the window when liberals turned into and chose the current mania(yes, insantiy) of the left.
It is high time the BOV stand up and stop falling into this trap of being nice!

Patrick Ryan
Patrick Ryan
2 days ago
Reply to  Clarity77

Heartily agree.
That “orientation” session was more suited to a local non-profit with first time board members. Complete waste of valuable BOV time.
Leftists cannot be defeated until the right resolves to ignore the inevitable epithets/characterizations and bore into the elements of whatever issue is at hand.