Governance changes ahead?

Peter F. Lake's December 5, 2010, commentary in the Chronicle of Higher Education may spell trouble ahead for independent school governors in the United States.  From the first paragraphs:

A potential crisis for the private, nonprofit university is looming. Congress has just regulated for-profit colleges as never before; most observers believe that even more regulation—this time of private nonprofit higher education—is coming. Will it be our own 1933? That was the year Congress passed landmark securities legislation to correct a corporate culture that had inflamed the crash of 1929 and then the Great Depression. Are we—should we be—on the verge of a legal revolution in accountability?

The answer: Most likely, and soon.

Lake's notion, not at all far-fetched, is that the self-perpetuating nonprofit board at a private university is one of the least scrutinized and regulated places in all of corporate governance.  And this state of affairs will likely not continue indefinitely, given the size of endowments at risk and the escalating costs of attendance for undergraduates.

While I disagree with Lake that tighter regulation of nonprofit governance is a good thing whose time has come, I do agree that nonprofits should get ahead of this curve.  And sooner rather than later.  Independent schools, incorporated as 501(c)3 nonprofits in the United States will likely get swept up in any rush to regulate that affects our collegiate cousins, despite the fact that we are small fry by comparison.