Motion for Consideration by the University of Louisville Board of Trustees. January 14,2015 Be itrresolved that: 1. Effective June 30, 2016, the President of the University of Louisville (the University") shall not concurrently serve as the President of the University of Louisville Foundation, Inc. and its affiliates (the “Foundation”). 2. ‘The Board of Trustees of the University encourages the Board of Directors of the Foundation to review the President's role in its governance structure including, for example, the President's continued role, if any, on the Nominating Committee, on the Executive Committee, and as a voting member of the board. Such review should include best practices and a comparison of Foundation governance structures to peer and aspirational schools. 3. The Chairman and the Treasurer of the Board of Trustees ofthe University are delegated responsibility to work through the financial implications of this motion and policy change with the current President of the University. Support Statement for Motion ‘The University has 12 colleges and schools and three campuses. Its legislative mandate and mission is to be a “premier, nationally recognized metropolitan research university.” In pursuit of this mission, the University is focused on, among other things: + increasing the number of baccalaureate (and STEM + H) degrees awarded annually; + increasing the graduation rate; * increasing the first- to second-year undergraduate retention rate; + securing a Phi Beta Kappa chapter; + increasing annual research awards; + increasing grant and contract expenditures; + pursuing priority research and commercialization areas; + increasing collaborative partnerships with the community; + promoting diversity; and, ‘+ managing a world-class competitive and compliant athletic program. ‘The Foundation now has over $1 billion in assets, As of June 30, 2104, the Foundation wholly or partially owns at least 14 subsidiaries which operate businesses focused on a wide range of activities including real estate development, life science business development, operating a golf course, student housing, equityinvesting in start-up companies, and administering deferred compensation plans and agreements, Additionally, the Foundation’s focus on raising annual funds and capital campaigns will likely have to increase in the coming years because (i) the Foundation has recently - and is expected to continue to ~ provide such a large amount of annual support to the University, and (it) the Foundation’s current spend rate of over 7.48% is unsustainable over the long-term. ‘The Board of Trustees has previously affirmed, and continues to affirm, that the Foundation can best fulfill its mission and best support the University as a separate, distinct, and independent entity apart from the University. ‘The Board of Trustees also recognizes that the size, complexity and challenges of both the University and the Foundation have increased dramatically in recent years. As such, each of these entities is of a size and complexity that it should have its own, separate and independent president to best pursue each of its respective missions, Best governance practices of ACC, peer, and aspirational institutions generally separate the powers of the President of the University’s role as President and his/her role on the Board of Directors of the Foundation, which are comparatively limited. In order to improve the University's standing amongst its ACC and peer group colleagives, its governance structure must be improved and aligned similarily. In short, the Board of Trustees believes that the President of the University and the President of the Foundation is each a full time job and should be held by two different individuals. Finally, the Board of Trustees acknowledges that passing this motion may have certain financial ramifications for the University and/or the Foundation, but believes any such financial obligations will be outweighed by the short- and long- term benefits that will be realized by enacting this motion.