Earlier in my career I worked in the Boston financial services industry, specifically in the investment management and brokerage areas. Frequently the SEC would conduct “sweep reviews/examinations” of the industry to ensure that regulated entities were in compliance with securities laws and that the interest of the public was protected. The SEC coined the expression “let the light shine in” as a mission statement for these industry-wide examinations. The proposed Higher Education Transparency Act seeks the same fundamental goal of letting the light shine in on the financial activities of large private colleges and universities in Massachusetts and ensures that the interest of the public is maintained.
Granted, the colleges and universities that are affected by this proposed legislation provide a valuable service to society as a whole. However, it should be noted that as tax-exempt organizations these institutions are benefactors of favorable public and financial policies. Colleges, particularly those with sizeable real estate holdings and endowments, derive an undetermined amount of financial benefit from sources above and beyond their functions as educators. As such, they should be obligated to bear the same if not a greater fiduciary responsibility to the public than that of for-profit organizations in disclosing their financial performance and relationships. Public colleges and universities in Massachusetts are already required to provide similar information as that proposed in the bill. Shouldn’t private colleges and universities be held to the same standard? Additionally, some of these institutions were the recipients of sizable amounts of federal stimulus money. The decision to accept public support in the private sector during the financial crisis required more financial disclosure by those institutions. Once again, shouldn’t private colleges and universities be held to the same standard?
The most recent financial crisis has required difficult financial decisions to be made by all – nobody enjoys making them or being on the receiving end of them. If the colleges are asking the workers at the lower end of the pay scale (security guards, custodians, and food service personnel) to bear a disproportionate share of the financial burden during this economic downturn, then that’s not acceptable. These workers, for the most part, are locked into their current positions. They have very few options and opportunities for employment elsewhere, unlike the professors and administrative staff at these colleges. To place an unfair amount of the burden on those who can afford to bear it the least is unconscionable. If this financial information isn’t universally made available to all interested parties then how can these employees know if the pain of these financial decisions is being equally shared by all rather than by those who can LEAST stand to bear it?
In the end, this law should remove a great deal of the angst from the relationship between management and (union) employees especially at the bargaining table during contract negotiations. As I read it, the ultimate goal of the legislation is to facilitate an employer-employee relationship that works for both parties. Absent full disclosure, that can’t happen.
John Carbone is a security officer at Harvard University and a Service Employees International Union Local 615 shop steward.