The following Chronicle of Higher Education commentary says it all about a nonprofit board that has failed in its fiduciary duty. Worth the read.
The NCAA Is Too Far Gone for Incremental Reform
At its spring meeting last month, the Knight Commission on Intercollegiate Athletics made a radical recommendation. We urged the NCAA to shift from being a membership association — with inherent conflicts of interest — to being an independent leadership organization capable of propelling real change in the college revenue sports of Division I men’s basketball and football.
We concluded that the National Collegiate Athletic Association, and by extension the university presidents who lead it, cannot engineer that transformation under its current governance structure, even with the best intentions.
The NCAA recognized its organizational limitations in the recent wide-ranging basketball scandal. An FBI investigation exposed a corrupt recruiting environment rife with under-the-table payoffs to high-school players and kickbacks to college coaches, which led to criminal charges against coaches, agents, and shoe-company executives.
In response, the NCAA appointed an independent Commission on College Basketball, led by Condoleezza Rice, to develop a reform agenda to halt the abuses. The Rice Commission rightly emphasized the NCAA’s often overlooked role: to administer what "is effectively a public trust in the United States — athletic competition among college athletes."
We believe the NCAA can only become a true leadership organization, and fulfill its responsibility to administer this "public trust," if its governing board and the Division I Board of Directors are controlled by a majority of independent appointees, much as is the case with many corporate and nonprofit boards.For years, university presidents have lamented the corrupting influence of money in Division I men’s basketball and Football Bowl Subdivision programs but claimed they were largely helpless to act on their own, so long as other presidents and institutions felt obligated to protect the interests of their conferences, institutions, and powerful alumni associations.
The NCAA’s repeated inability to prevent abuses in college revenue sports has been fueled by what Rice called a "circular firing squad … the fault was always that of someone else." Independent and objective oversight is key to fixing those buck-stops-there conflicts of interest.
If the NCAA fails to clean up men’s basketball now, when will it do so? Rice put it well when she warned that if university presidents, trustees, coaches, athletic directors, and other stakeholders don’t take far-reaching action, "the cynicism and skepticism that is so prevalent now will be rewarded with the sport’s collapse."
We were pleased to see the Rice Commission endorse a longstanding Knight Commission recommendation to add independent directors to the NCAA Board of Governors, the organization’s highest-ranking governing body. But we want the NCAA to go beyond that by adding independent members to the 24-member Division I Board of Directors, which now has only institutional representatives and which controls the policies that shape the richest and most powerful college sports programs.
As a matter of guiding principle — and if independent leadership is to become a reality — both NCAA boards must ultimately have a majority of independent directors.
We commend the Rice Commission’s work, including its proposal to create an independent infractions-and-enforcement process for cases of major and complex violations. In several areas like governance, we encourage university presidents and the NCAA to go further than the recommended changes.
Financial transparency in agreements with shoe and apparel companies is another area that requires stronger reforms. First, the NCAA should establish a rule that no university can give away the right to any employee to have a contract with a shoe, equipment, or apparel company contingent on players wearing or using the companies’ equipment or products. Such contracts must be made only with the university, not with individual coaches or athletic directors.
Second, we support the Rice Commission’s proposal that showcase basketball tournament operators be required to disclose more about the income they receive from shoe companies and other sponsors. By comparison, however, NCAA rules and reporting forms do not require coaches and other university employees to disclose their own outside income from similar sources. We believe NCAA coaches and colleges should be held to a higher disclosure standard, not a lower one.
To remedy this, the NCAA should restore and enforce a requirement that coaches disclose and receive prior written approval from their university president for any athletically related outside income. Additionally, all Division I schools — whether public or private — should be required to publicly disclose outside income that any employee receives from a company whose products, apparel, or equipment are required to be used by the university’s athletes. Sunlight may not be a cure-all, but it is a good deterrent to shady behavior.
This is the moment of opportunity to restore public faith in the NCAA’s ability to be an effective steward of big-money college sports. Business as usual just won’t cut it anymore.
Arne Duncan and Carol Cartwright are the co-chairs of the Knight Commission on Intercollegiate Athletics. Duncan was previously the U.S. secretary of education, and Cartwright is president emeritus of Kent State University and Bowling Green State University.