B-School Life

Board Members Quit After Thunderbird Vote on For-Profit Partnership


Board Members Quit After Thunderbird Vote on For-Profit Partnership

Photograph by Getty Images

At least two members of the Thunderbird School of Global Management board quit in protest after the business school agreed to a controversial plan to form a partnership with the for-profit Laureate Education.

In sharply worded e-mails to the board, Merle Hinrich and Harry Cockrell said the partnership is not in the best interest of Thunderbird. Hinrich said the school’s alumni, who have expressed concerns that the partnership will devalue their degrees, deserve an apology. “We have no credible authority to lead Thunderbird,” Hinrich wrote in a July 1 e-mail to the board. “This is the end of Thunderbird as we have known it. … My personal belief is that the Laureate transaction is a tragedy for Thunderbird and a total windfall for Laureate.”

Thunderbird announced the Laureate partnership in March, saying it will allow the expansion of its online and executive education offerings and the launch of an undergraduate business program, its first in more than 50 years. Thunderbird said it will continue to operate as a private, not-for-profit educational institution and retain control of its curriculum, faculty, and admission standards.

But alumni almost immediately opposed the plan, citing the for-profit education industry’s problems with recruiting practices, educational quality, and job placement. One alumnus organized a petition to suspend the partnership, arguing that the plan would “cause permanent and irreparable harm to the Thunderbird brand, ranking, and academic reputation”—claims the school disputes. The petition has so far gathered nearly 2,000 signatures.

The board voted June 26 in favor of the proposal—subject to the approval of its accreditor, the Higher Learning Commission. The two resignations were submitted on July 1 and 2. An e-mail announcing a third resignation couldn’t be authenticated by Bloomberg Businessweek. Thunderbird did not disclose the vote until July 3 and declined to comment on the vote or the resignations. Matthew Yale, a spokesman for Laureate, also declined to comment.

In his resignation letter, Hinrich said the partnership will leave Thunderbird financially dependent on revenue from Laureate. With three seats on the Thunderbird board, he argued, “ultimate control” of the school would be in the hands of a for-profit company. The new undergraduate program, Hinrich added, will be a “complete distraction to the original Thunderbird graduate study program and a destruction of the Thunderbird brand.”

In his e-mail, Cockrell said the partnership “will inevitably change the culture and dynamics of the school as we know it today,” adding that “such fundamental shifts in policy and direction [are] not in line with the mission of Thunderbird.”

Thunderbird, in Glendale, Ariz., offers graduate business degrees as well as online programs and nondegree executive education programs. Its full-time MBA program is ranked No. 45 in the latest Bloomberg Businessweek ranking. Laureate Education, in Baltimore, serves more than 750,000 students through campus-based and online programs in 29 countries.

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Louis_lavelle
Lavelle is an associate editor for Bloomberg Businessweek.

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