Hiring an executive-search firm to find a new college president or provost has become pretty standard across higher education.
Governing boards that hire such companies justify the price, often in the six-figure range, by saying they provide expertise and add professionalism.
But a new study being presented on Friday raises questions about the role of those companies in the process at public colleges and whether taxpayers are getting their money’s worth.
By hiring a search firm, “governing boards are outsourcing their most important responsibilities,” said James H. Finkelstein, a professor of public policy at George Mason University and the lead author of a report on the study.
“Is it reasonable to hire a third party that is solely interested in making a profit?” said Mr. Finkelstein, who will present the study here at the annual meeting of the American Association of University Professors. Mr. Finkelstein’s co-author is Judith A. Wilde, a higher-education expert with Beta Group Consulting.
Using open-records requests, the researchers acquired the contracts and related materials from 61 high-level searches, conducted by 21 different search firms, for public two- and four-year colleges during the 2015-16 academic year. Those searches represented a little more than half of the 112 searches that the researchers identified as taking place during that period (Over all, three-quarters of the 112 searches used search firms.)
About 70 percent of the resulting contracts were from four-year colleges. And 70 percent of the agreements were for presidential searches, while the remaining 30 percent of searches were for provosts.
The cost of the searches that the researchers examined was nearly $79,000, on average, but it ranged as high as $160,000.
A little more than half of those agreements were based on a fixed fee, but a quarter based the cost on the salary of the successful candidate. In addition, nearly half of the agreements tacked on indirect expenses or “administrative fees” of $2,000 to $30,000.
Wide Latitude
The researchers found that the contracts seem to give the search firms wide latitude in how they operate, with few specific requirements, said Ms. Wilde.
Less than half of the agreements have much detail about what services the search firms will provide, she said. “That doesn’t mean they’re not doing it, but it’s not in the contract.”
In many cases, if the search firms offered specific services, it came at an extra price, the study found.
As an example, only 10 percent of the contracts required the search firms to conduct background checks on candidates, said Mr. Finkelstein. Twenty-two percent of the firms checked criminal backgrounds for an additional fee, the study found.
Even when a search firm looked into a candidate’s past, Mr. Finkelstein said, the check was sometimes accompanied by the caveat that the firm could not be held liable for incorrect information.
Ms. Wilde said the firms often check only publicly available sources for information on college degrees. Candidates “can put anything on a website,” she said.
All of that adds up to an environment in which the search firms could be driving the process for their own financial benefit, rather than governing boards’ protecting the public interest, Mr. Finkelstein said.
More than half of the contracts the researchers examined were written by the search firms, not the governing board that was hiring them. “This struck us as unusual, at best,” Mr. Finkelstein said, “since these are public institutions and, as such, most often the procuring agency would produce the instrument of agreement.”
Fourteen of the contracts offered assistance in negotiating an employment agreement with the successful candidate, creating a potential conflict of interest, Mr. Finkelstein said.
“Even if it is appropriate to hire these firms,” he asked, “don’t institutions have the obligation to ensure that these agreements protect the public interest?”
Eric Kelderman writes about money and accountability in higher education, including such areas as state policy, accreditation, and legal affairs. You can find him on Twitter @etkeld, or email him at eric.kelderman@chronicle.com.
