Governance Standards in Institutional Mergers and Acquisitions

The statement that follows is excerpted from a longer draft statement, On Institutional Mergers and Acquisitions, which was prepared by a joint subcommittee of the Association’s Committee A on Academic Freedom and Tenure and the Committee on College and University Governance (Committee T) and approved for publication by the parent committees and by the Association’s Council in November 1981. Committee T in February 1983 approved the separate publication of the following section of that statement entitled Procedural Standards in Implementation which deals with the faculty’s role.

Protection of faculty rights and prerogatives in a merger situation requires early and full faculty involvement in any discussions leading to a merger. The role of the faculty, first in the planning of an institutional merger or acquisition and then in implementing it, derives from the principles of shared responsibility and authority as set forth in the Statement on Government of Colleges and Universities. Because, according to the Statement on Government, “the faculty has primary responsibility for such fundamental areas as curriculum, subject matter and methods of instruction, research, faculty status, and those aspects of student life which relate to the educational process,” and because these areas will inevitably be affected by a merger or acquisition, it is imperative that the faculty of the concerned institutions be afforded a meaningful role in the planning and implementation of mergers and acquisitions. This role is set forth with additional particularity in the Association’s statement on The Role of the Faculty in Budgetary and Salary Matters:

The faculty should play a fundamental role in any decision that would change the basic character and purpose of the institution, including transformation of the institution, affiliation of part of the existing operation with another institution, or merger, with the resulting abandonment or curtailment of duplicate programs.

Before any decisions on curtailment become final, those whose work stands to be adversely affected should have full opportunity to be heard. In the event of a merger, the faculties from the two institutions should participate jointly in negotiations affecting faculty status and the academic programs at both institutions.

The essential point is that the faculty of both institutions should be involved before decisions or commitments to affiliate have been made, or before any decisions on curtailment of programs (if such decisions are an aspect of the affiliation) become final. Preliminary or exploratory discussions about the possibility of institutional affiliation may in some instances occur without full faculty involvement, but full involvement of the faculties of both institutions should begin early in any course of discussion that appears likely to eventuate in an affiliation; any final commitment bearing on institutional affiliation made without full faculty involvement would be inimical to the principles set forth in the Statement on Government and the statement on The Role of the Faculty in Budgetary and Salary Matters.

The possibility for abuse of the merger situation is greatest in those cases in which a condition of imminent or existing financial exigency is offered as the basis for exceptional treatment of the tenure commitment as outlined above. As in any instance in which a condition of financial exigency is offered as a justification for modification of tenure obligations, the decision on the financial situation of the institution is too grave, and its consequences too far-reaching, to be made solely in restricted administrative circles. Any decision to seek merger in a context of financial exigency should be made with the fullest possible participation of the faculty in the institution that would be acquired. The faculty of the institution that is experiencing severe financial difficulties should be informed as early and as specifically as possible of those difficulties, and that faculty should participate fully in any decision to seek merger as an alternative to possible extinction.

Merger of two institutions when one is experiencing financial exigency may present opportunities to preserve faculty positions and protect faculty status. At the same time, care must be taken that merger is not employed as a means of breaching tenure obligations. The Association offers its advice and assistance, as early as possible in the course of merger negotiations, to ensure compliance with the standards set forth in this statement. In all merger situations, the Association is prepared to enforce adherence to these standards, in accordance with its  established procedures for processing complaints and cases.