Sam Houston State University (SHSU) is a member of the Texas State University System (TSUS) and has a governing board that is a legal body consisting of nine members. In order to conduct business, five members of the board must be present to constitute the required quorum. This board has specific authority over the institution, is an active policy-making body for the institution, and has been assigned the task of ensuring that the financial resources of the institution are adequate to provide a sound education program. Rules and regulations are in place to assure that both the presiding officer of the Texas State University System Board of Regents and a majority of other voting members of the board are free of any contractual, employment, or personal or familial financial interests in the institution and that the board is not controlled by a minority of board members or by organizations or institutions separate from it. The board is not presided over by the chief executive officer of the institution.
Legal Body with Specific Authority Over the Institution
The organization, control, and management of the TSUS, of which SHSU is one of seven component institutions, “is vested in the Board of Regents, Texas State University System” as stipulated in Texas Education Code, Chapter 95.01 [1] and 96.61 [2]. The University Organizational Chart also indicates the board’s authority over the institution [3]. The governing board structure is stipulated in the Texas Education Code, Chapter 95.02 [4], which states, “the board is composed of nine members appointed by the governor with the advice and consent of the senate.” This statement is reinforced by the TSUS Rules and Regulations, Chapter I, Section 3 [5]: “The Board of Regents of The Texas State University System is composed of nine members appointed by the Governor of Texas with the advice and consent of the State Senate.” The legal history of the TSUS System Board of Regents is summarized in the TSUS Rules and Regulations, Chapter I, Section 1 [6], and a list of the current members of SHSU’s governing board can be viewed at the TSUS website [7].
The Board of Regents has specific authority over the institution and is an active policy-making body for the institution as stated in the Texas Education Code, Chapter 95.21: (a) “The board is responsible for the general control and management of the Universities in the system” and (b)
The board has authority to promulgate and enforce such rules, regulations, and orders for the operation, control, and management of the University system and its institutions as the board may deem either necessary or desirable. When a power is vested in the board, the board may adopt a rule, regulation, or order delegating such power to any officer, employee, or committee as the board may designate [8].
Further, the TSUS Rules and Regulations, Chapter I, Section 2 stipulates the following:
The Board is responsible for the general control and management of the Components in the system and may erect, equip, and repair buildings; purchase libraries, furniture, apparatus, fuel, and other necessary supplies; employ and discharge Presidents or principals, teachers, treasurers, and other employees; and fix the salaries of the persons so employed; and perform such other acts as in the judgment of the Board contribute to the development of the Components in the System or the welfare of their students. The Board has authority to promulgate and enforce such rules, regulations, and orders for the operation, control, and management of the system and its Component institutions as the Board may deem either necessary or desirable. When a power is vested in the Board, the Board may adopt a rule, regulation, or order delegating such power to any officer, employee, or committee as the Board may designate [9].
The policies created by the TSUS Board of Regents are listed in the TSUS Rules and Regulations [10]. These rules are applied and implemented at the quarterly board meetings and demonstrated in the following sample board meeting minutes from the August 2017 [11], the November 2017 [12], and the February 2018 [13] Quarterly Board Meetings.
Fiduciary Oversight Over the Institution
The TSUS Board of Regents has been assigned the task of ensuring that the financial resources of the institution are adequate to provide a sound education program by the Texas Education Code, Chapter 95.28 [14], which stipulates the following:
All appropriations made by the legislature for the support and maintenance of the system universities, for the purchase of land or buildings for the universities, for the erection or repair of buildings, for the purchase of apparatus, libraries, or equipment of any kind, or for any other improvement of any kind shall be disbursed under the direction and authority of the board. The board may formulate rules for the general control and management of the universities, for the auditing and approving of accounts, and for the issuance of vouchers and warrants which are necessary for the efficient administration of the universities.
The Texas Education Code, Chapter 95.29 [15] further states the following:
The board shall file in each house of the legislature at each of its regular biennial sessions a statement of the receipts and expenditures of each of the system universities, showing the amount of salaries paid to the various teachers, contingent expenses, expenditures for improvements, and other items of expense. The board shall also file its recommendations for appropriations for the universities.
The TSUS Rules and Regulations, Chapter III, Section 6.7 [16] reinforces the Texas Education Code, Chapter 95.29. The board’s role in fiduciary oversight over the institution is evidenced throughout the following sample board meeting minutes from the August 2017 [11], the November 2017 [12], and the February 2018 [13] Quarterly Board Meetings.
Contractual, Employment, Personal, or Familial Financial Interests
Both the presiding officer of the TSUS Board of Regents and a majority of other voting members of the board are free of any contractual, employment, or personal or familial financial interest in the institution. The TSUS Rules and Regulations, Chapter II, Section 4.11 [17] addresses the issue of nepotism by stating, “no individual may be employed in the System Administration who is related within the first degree of consanguinity to a member of the Board of Regents, or to an employee in the System Administration.” Furthermore, the TSUS Rules and Regulations, Chapter VIII, Section 3.2 [18] specifically prohibits conflict of interest as it applies to contracts and other fiduciary interests by stating, “neither the System nor a component thereof may enter into a contract in which a Regent or the Regent’s spouse has a direct or indirect pecuniary interest.” In addition, this policy goes on to state the following in Section 3.4:
A Regent who has a personal or private financial interest in a measure, proposal, or decision pending before the Board . . . shall disclose such interest in a public meeting of the Board, and such disclosure shall be entered in the minutes of the Board. The Board may consider such measure, proposal, or decision, but any Regent having such an interest shall not vote or otherwise participate in such deliberation or action of the Board.
This policy also covers the aspect of the Regent as a stockholder when it states the following in Section 3.2:
If a Regent is a stockholder or director of a corporation seeking to enter into a contract with the System or a component thereof, but owns or has a beneficial interest in no more than one percent of the corporation's outstanding capital stock, the contract may be executed so long as it is an affiliation agreement, license (including a license of intellectual property), or sponsored research agreement, or it is awarded by competitive bidding or competitive sealed proposals. An interest owned by the Regent's spouse is considered to be a "beneficial interest." The affected Regent must disclose such interest in a public meeting of the Board of Regents and shall not vote on the contract or transaction.
To further validate that there is no conflict of interest for board members, this policy requires that “each Regent, the Chancellor and the presidents of the components shall file a financial statement with the Texas Ethics Commission not later than April 30, each year. . . .” Additional ethics and conflict of interest policies are outlined in The TSUS Rules and Regulations, Chapter VIII, “Ethics Policy for Regents and Employees of the Texas State University System” [19].
Majority Control
The board is not controlled by a minority of board members or by organizations or interests separate from it, in accordance with the Texas Education Code, Chapter 95.05 [20]:
Five members of the board shall be a quorum for the transaction of business at any business meeting and, unless a greater number is required by the board’s rules, the act of the majority of the members present at any meeting shall be the act of the board.
The TSUS Rules and Regulations, Chapter I, Section 4 [21] supports this policy by requiring that “a majority of the members of the Board shall constitute a quorum, and no formal action shall be taken by the Board in the absence of a quorum.” Sample board meeting minute excerpts have been provided as evidence of quorum requirements [22].
Presiding Officer of the Board
The TSUS Rules and Regulations, Chapter 1, Section 5.1, Subsection 5.11 [23] stipulates the following:
The Chairman of the Board shall be elected from the membership of the Board at the regular November Board meeting to serve a one-year term to commence immediately upon election. He or she may succeed him or herself one time only. He or she shall appoint the membership of all Board committees; formally execute, in the Board’s name, all contracts and documents authorized by the Board; and, otherwise perform such other duties as a board chairman customarily performs.
As evidenced by the Board of Regents membership listing [7] and SHSU’s Organizational Chart [3], the President of SHSU does not serve as Chairman of the Board of Regents and therefore does not preside over the Board.