Volume 36, Issue 3, Fall 2017
Shareholder Theory in Academia
The managers of colleges and universities have to make decisions on a wide range of issues with regard to goals and how they may be pursued. “Managers” refers to such positions as the president, provost, vice president dean, and director of a university. This paper lays out the theoretical basis for the right answer for these decisions. It does so by setting out the fundamental function of an academic institution, linking this function to a duty, and explaining how to satisfy this duty in hard cases. This article’s thesis is that university managers have a duty to shareholders alone. Shareholders are those who own the university. This duty is satisfied when managers satisfy the fundamental project shareholders assign to a university.