Higher education controversies traditionally have been a helpful and relevant source of governance guidance for the broader corporate community. In recent years, well-documented problems at institutions such as Penn State, Rutgers, Ball State, St. John’s and others have provided useful lessons on important governance issues such as board-executive reporting and lines of authority, principles of effective oversight, financial management and levels of board engagement. So it is, also, with the recent academic misconduct scandal at the prestigious University of North Carolina at Chapel Hill.
To characterize the UNC situation as a “garden variety” college sports scandal would be to ignore its unique and broad-based governance relevance. Rather, it serves as an instructive illustration on two concepts: first, how organizational scandal can arise from totally unexpected sources; and second, how cultural and behavioral proclivities can unintentionally perpetuate a scandal. Indeed, its lessons regarding human nature, institutional loyalty, organizational culture and employee ethical consciousness have broad-based relevance across industry sectors.
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