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May 13, 2002

The President's Cabinet responds to the College Executive Committee


As the principal officers charged by the Board of Trustees for administration of the University, we want to respond to the statement by the Executive Committee of the Emory College faculty. We believe firmly in the principle of shared governance of the University by faculty and staff members.

No university is, or should be, an oligarchy. At the same time, no university can be, fully, a democracy. What a university must be, however, is a forum for the exchange of accurate information, for fair and civil debate about the implications of that information, and for wise decision making. It is in the interest of furthering these ends that we respond to the faculty letter printed in this issue of Emory Report.

On several matters we agree with the faculty: The cuts in benefits are regrettable, and the process by which the decision was made could have been longer, more transparent, and more laden with information for those who would be affected by those cuts. Nevertheless, we believe the decision to cut benefits was, in the end, necessary, and that the cuts finally arrived at are much less severe than those originally proposed.

The faculty and staff must have appropriate avenues for participating in the governance of the University. Responsibility for ensuring that these avenues are well utilized must be shared. We here pledge ourselves to nurturing and facilitating as fully as possible the engagement of faculty and staff in the means of governance that are already in place, and to collaborating to create new means of engagement where necessary.

Emory must have an ambitious vision. We believe it does have an ambitious vision. We are not wavering from that vision, which has been fully articulated in a number of important documents derived from deep and wide-ranging discussions with faculty, staff, trustees, alumni and students and published over the past seven years. These documents include Choices and Responsibility; A Vision for Emory; The Emory University Campus Master Plan; the Strategic Plan for Oxford College; the report of the Commission on Teaching; the current study of research at Emory being led by faculty members from all schools of the University; and other such manifestations of the caliber of intellectual life and aspiration at Emory. We remain as committed as we have always been to doing all that is possible to enhance Emory’s standing in the world.

The Emory College faculty, along with other faculty and staff members, have registered their points of concern in the “Statement of Grave Concern.” We would like to address each of those points.

Are the cuts in benefits necessary?
The Statement says that the cuts “may be unnecessary and counterproductive,” that savings will be offset by delayed retirements and reduced bequests from faculty and staff, and that the costs of medical care will be slowed because “the federal government is poised to increase Medicare coverage for drugs.”

First let us note that it would be unwise to frame a budget on the basis of what the federal government might do. Should the federal government institute universal health care for all Americans, our budgetary worries might—or might not—be over. In the meantime, we are confronted with the grave and unmistakable reality of double-digit increases in health care costs. The University’s own contribution to the health care of its employees and its retirees has ballooned dramatically over the past few years. With every increase in costs, the University has absorbed much more than it has passed on to employees and retirees. For as long as prudently possible, Emory continued to contribute fully 69 percent of the costs of health care premiums for those who had retired from the University.

But as this benefit has absorbed more and more of our operating budget, we have had fewer and fewer resources to put into salaries, libraries, financial aid to our students, and maintenance of our physical plant. We had to make a choice. The choice was this: Should we continue to tether our fortunes to external forces over which we have no control and which can, with each passing year, constrict our mission; or should we limit our exposure to something that can, in the end, severely damage us? We chose to limit the University’s vulnerability while maintaining a competitive benefits package.

As we do every year in anticipation of the open-enrollment period, we are currently redesigning the health care plan to make it both as effective and as affordable as possible. More than 100 faculty, staff and administrators from across the University are involved in these discussions. Our hope is that this review will help to minimize the impact of the overall benefits changes on retirees especially.

Will the impact of the benefits cuts be severe and demoralizing?
No one finds delight in the necessity to reduce a benefit. This is not a decision the administration and trustees could take lightly or could initiate without regret. Our colleagues, staff and friends are affected by the decision. We ourselves will be affected by it.

In balancing our responsibility to the financial viability of the University and the need of colleagues and friends for affordable health care, we had to make trade-offs. Although it may not ease the pain to say so, the cuts are not as severe as they might have been. The University is not—as some comparable private colleges and universities are doing—laying off staff and aborting searches to fill faculty positions.

The choices we made were reasonable and protect our central assets. We reduced our contribution to the premium costs of retiree health care from 69 percent to 50 percent, and we capped the growth of our continuing contributions to 4 percent per year. This cap derives from the same logic that governed the reduction in the first place: not to undermine our mission by tying it to the increases that actually do jeopardize our future. We have heard expressions of disappointment, betrayal, anger and deflation of spirit as a result of this decision. We understand these expressions. But with regret, we believe it must stand.

Will the cuts affect Emory’s academic standing?
The “Statement of Grave Concern” is absolutely correct in noting the disparity between Emory’s No. 8 endowment and its No. 18 ranking in U.S. News and World Report. The reasons for this are many and complex and have much to do with geography and history. Even in 1979, before the great Woodruff gift and the tremendous growth of the endowment during the 1980s and 1990s, Emory’s endowment ranked 16th in the nation. But its faculty salaries that year ranked near or at the bottom of its cohort of peers, and its academic standing was that of a strong, regional doctorate-granting university, not a major research institution.

By contrast, just last month (April 19) The Chronicle of Higher Education reported that the average salary for full professors at Emory ranks 15th in the nation, just behind salaries at Duke and at the end of a list led by Harvard, Rockefeller, Princeton, Yale, Stanford and Chicago. (Emory actually ranks seventh after adjustment for regional differences in cost of living.)

We are in good company, in both the degree to which our faculty are compensated and the measures of our academic standing. None of those universities is likely to step aside for us to take its place. But with the belief that the best faculty will raise Emory’s academic standing, Emory has sought for more than a decade to strengthen its competitiveness in the market for both faculty and staff. We constantly monitor salaries in the marketplace. And with an aim to maintaining a competitive edge, we have asked the Ways and Means Committee to make salary competitiveness the highest priority in preparing the budget for fiscal year 2003–04.

Why was the faculty not consulted?
As we noted above, we believe firmly in the principle of shared governance in a university. Both according to centuries-old tradition and according to the bylaws of Emory University, however, shared governance does not mean there are no boundaries.

Trustees must establish policy and approve budgets and hire presidents; they do not meddle in administration. Faculty members must set academic standards, establish curricula and energize the intellectual life of the Univer-sity; their role in managing the details of daily administration is, for the sake of their principal work, limited. Administrators are charged with making it possible for staff members to do their jobs, for faculty members to do their jobs, and for the institution to run smoothly while remaining strong financially; they may not, by themselves, set University policy or tell the faculty how to go about their scholarship.

That these spheres of responsibility exist does not mean they do not overlap, or they do not impinge on each other and make consultation necessary. Clearly a decision that affects every employee and retiree, such as the decision to reduce benefits, necessarily entails consultation.

The Statement condemns “the senior administration’s unwillingness to engage constructively with the proposals in the College faculty’s Resolution and the Open Letter” sent by the College faculty. Yet those documents, which were shaped by the collaboration of many people—along with the various open forums, Faculty Council and University Senate meetings, and a mountain of correspondence from individuals over the past three months—not only have fully aired the views of hundreds but also were heard, wrestled with and taken to heart by administrators and trustees charged with keeping the budget of the University in balance.

The benefits changes proposed in January were not the changes approved April 11 by the trustees. And the significant difference between January and April is directly a result of the dialogue in which the administration, faculty and staff engaged. The administration did not agree with all of the counterproposals made during that dialogue. That does not constitute refusal to engage constructively.

What about new structures for consultation?
Half a century ago, the Board of Trustees established the University Senate as the body by which faculty and staff could exercise their shared responsibility for the governance of the University. That body has been presided over ably by some of the most respected and most senior faculty in the University. One committee of the Senate—the Fringe Benefits Committee—spent countless hours poring over the proposals for cutting fringe benefits, issued a thoughtful and deeply considered report containing some agreement with the proposals and some counterproposals. This committee’s report had the effect of mitigating the degree to which both retirement benefits and medical benefits to retirees were modified.

The governance structure works. It must be put to work in a still more vital way. The degree to which this happens depends on the faculty and staff.

But we pledge ourselves to facilitating that engagement. The president, the provost, several vice presidents and one dean, representing the Deans’ Council, meet monthly with the Senate to present information, hear respon-ses and engage in discussion on issues of the most vital importance to the life of the University. This is the forum for these matters. It is the body that represents the faculty and staff—and the students as well—in recommending policy and action to the president and to the Board of Trustees.

The Statement calls for elected faculty representatives, with voting privileges, on the Board of Trustees. This will be a matter for the Board to decide. But we oppose such representation. It is absolutely necessary that a board of trustees act with objectivity, but not with indifference, in setting the policies and strategic directions of the University.

To the degree that faculty members are affected directly and materially by budget decisions, they are interested parties—that is, they stand to gain or lose by the decisions they would be making as part of the Board. Certainly they might serve as advisory members of the board or its committees—just as the chair and the chair-elect of the Faculty Council serve as representative faculty to the Academic Affairs Committee of the Board. We have recommended to the Board some ways in which such advisory relationships might be initiated.

Our shared responsibilities entail sometimes painful choices that we would rather not have to make. This has been an admittedly difficult process. Hundreds of people have spent thousands of hours to find the best path forward that can maintain the academic excellence and the long-term financial strength of Emory University. We commend all of those involved in this extraordinary effort and are certain that this decision will strengthen the University in its educational, research and service missions.

William M. Chace
Howard O. Hunter
John L. Temple
Michael M.E. Johns
William H. Fox
John L. Ford
Kent B. Alexander
Gary S. Hauk