NC State Board of Trustees

Responsibilities, Duties and Delegated Authority

Footnotes to Power Point Presentation

Slide 2: The UNC System

  1. Information and guidelines regarding Board of Trustee membership can be found in the General Statutes at N.C. Gen. Stat. § 116-31.

Slide 3: The BOT’s Role

  1. The Chancellor’s role and duties can be found in the General Statutes at N.C. Gen. Stat. § 116-34(a).

Slide 4: Fiduciary Responsibilities

  1. A trustee or other fiduciary must “act in good faith” and they must “never paramount their personal interest over the interest of those for whom they have assumed to act.”

-Miller v. McLean, 252 N.C. 171, 174 (1960)

  1. The North Carolina Uniform Fiduciaries Act describes something as being done in good faith when “it is in fact done honestly, whether it be done negligently or not.”

-N.C. Gen. Stat. § 32-2(b).

  1. a. A board member has to give “undivided allegiance” to the University when making decisions. Information obtained as a member of a board may not be used for personal gain but for the best interest of the University.

- (briefly discussing the legal responsibilities of nonprofit boards).

b. Conflicts of interest and issues of self dealing are addressed in great detail in the UNC Policy Manual at Chapter 200.1(5). The section includes definitions indicating what gives rise to a conflict, procedures of handling the conflict and sanctions that may be imposed for violating those procedures.

In short, a conflict occurs when a board member knowingly allows the University to enter into a business transaction with an entity in which the board member has a substantial interest.

  1. a.The duty of care is often described as the care that “an ordinarily prudent person would exercise in a like position and under similar circumstances.”

- (briefly discussing the legal responsibilities of nonprofit boards).

b.The best way to meet the duty of care is to be informed. Attend all required meetings and carefully read and consider any documents or agreements that deal with the University’s interests.

***Directors and board members are afforded some measure of protection for their decision making by what is known as the business judgment rule. The rule creates a presumption that decisions made by boards and directors were made with due care, in good faith and with the best interest of the corporation, or in this case the university, they represent in mind. Absent a rebuttal of this presumption by a party opposing the board’s decision, it is highly unlikely that a decision made by the board will be overturned by a court although a court may still hold a board liable if there it is clear there was no rational business purpose at all for the board’s business decision. Of course, the business judgment rule will not protect boards or board members who did not act in good faith, exercise the requisite amount of care or act in the best interest of the university at the time they made a decision.

- See Hammonds v. Lumbee River Elec. Membership Corp., 178 N.C. App. 1, 20-21 (2006).

Slide 7: The BOT’s Sources of Authority

  1. Chapter 116 of the North Carolina General Statutes can be found online at
  2. The Code of the Board of Governors and UNC Policy Manual can be found online at

Slide 10: Distinguished Professor’s Endowment Fund

  1. When the sum of the challenge grant and matching funds in the Distinguished Professors Endowment Trust Fund reaches:

(1) One million dollars ($1,000,000), if the sum of funds described in G.S. 11641.15(a)(1) or G.S. 11641.15(b)(1); or

(2) Five hundred thousand dollars ($500,000), if the sum of funds described in G.S. 11641.15(a)(2) or G.S. 11641.15(b)(2); or

(3) An amount up to two million dollars ($2,000,000), if the sum of funds described in G.S. 11641.15(a)(3) or G.S. 11641.15(b)(3);

the BOT may recommend to the Board of Governors, for its approval, the establishment of an endowed chair or chairs.

Slide 11: Campus Law Enforcement

  1. The BOT may then enter into joint agreements with the governing board of any municipality or county to extend the law enforcement authority of campus police officers into any or all of the municipality's or county’s jurisdiction and to determine the circumstances in which this extension of authority may be granted.

*BOTs may enter into similar agreements with any other constituent institution of the University of North Carolina.

11. Compensation for senior personnel fixed by the BOT pursuant to this section shall be consistent with the compensation structure, policies, and pay ranges set by the Board of Governors.

Slide 13: Information Technology

12.This includes security and encryption standards, software standards, hardware standards, acquisition of information technology consulting and contract services, etc…

*Initial policies, rules, and any changes must be submitted to the Office of Information Technology Services for review.

Slide 14: Traffic, Parking and Registration of Motor Vehicles

13.A BOT may;

  1. Set aside parking lots and other parking facilities on campus
  2. Issue and charge fees for permits to park in these facilities
  3. Install meters and set aside spaces where vehicles may be parked for specified periods of time
  4. Install automatic gates, employ attendants, and use any other device or procedure to regulate its parking areas and facilities
  5. Provide for the issuance of stickers, decals, permits, or other indicia representing the registration of vehicles or the eligibility of vehicles to park on campus
  6. Establish procedures for the collection of penalties

BOTs shall cause to be posted appropriate notice to the public of applicable traffic and parking restrictions.

BOTs shall provide for printing and distributing copies of their traffic and parking ordinances.

All ordinances adopted pursuant to this section shall be recorded in the minutes of the BOTs and copies shall be filed in the office of the President of the University of North Carolina and the Secretary of State.

Slide 16: Chancellor Selection

14.The search committee is to be composed of representatives of the BOT, the faculty, the student body and the alumni.

The chair of the BOT and the President shall jointly establish a budget and identify staff for the committee.

After receiving the committee’s report, the BOT is to nominate at least two names for the president in designating a nominee for the chancellorship.

Slide 18: Property and Buildings

15.BOTs shall be responsible to the Board of Governors for preparing and maintaining a master plan for the physical development of the institution, consistent with the total academic and service mission of the institution as defined and approved by the Board of Governors.

16.Any proposal involving the acquisition or disposition by an institution of any interest in real property shall be recommended by the BOT to and must be approved by the Board of Governors; provided, that

  1. if the proposal involves an interest in real property which is valued at less than $50,000, the BOT may authorize such transaction and proceed to obtain the necessary approvals from appropriate state officials and agencies, without first obtaining the approval of the Board of Governors.

17.These include the following:

(1) the selection of architects or engineers for buildings and improvements requiring such professional services;

(2) the approval of building sites;

(3) the approval of plans and specifications;

and (4) the final acceptance of all completed buildings and projects.

Slide 20: Student Financial Aid

18.Applies only to scholarships and forms of financial aid to students which are limited in their application to or are supported from sources generated by an individual campus.

OGC 7/14/10