This increase, approved at the board’s meeting last week, follows an increase of the same size last year. Chancellor Mark S. Wrighton said he hopes endowment spending will continue to grow in years to come.

The rise in spending comes on the heels of an approximately 21 percent return on the University’s endowment investments this year.

Endowment spending is based on the average value of the University’s endowment over the past five years. Due to negative returns in recent years of economic downturn, this year’s increase in spending is well below this year’s investment returns.

“The aim is to try to increase the spending from the endowment by at least inflation. One percent is lower than inflation. And so that creates a sort of strain for us,” Wrighton said.

The one percent increase accounts for just under $2.5 million in additional endowment spending, and the total endowment spending accounts for 10 percent of the University’s operating budget.

According to Wrighton, most of the increased spending has been predetermined by donors for specific uses, such as endowed professorships, scholarships, research programs and other special projects.

“Where those dollars go is defined by what the endowment has been given to us [for], in terms of purpose, by the donor…There’s no decision. It’s already preordained, if you will,” he said.

The board also began the process of setting next year’s tuition, providing the administration with a range of potential rates. The administration will present a proposal to the executive committee of the board in January, and the committee will decide what tuition will be.

“But because our costs are rising, one percent additional payout is helpful…We’re not keeping pace with inflation in that particular revenue stream. So, we’re hoping that we will have better investment returns in the endowment,” Wrighton said.

Trustees also elected Robert Frick, former vice chairman of the board of Bank of America, to the board of trustees.

The board approved the December graduating class before their Saturday ceremony, as well as new tenure appointments and promotions.

The meeting also addressed innovation and entrepreneurship at the University. Trustees broke into discussion groups that addressed topics such as the economic benefits of research projects and the role of innovation and entrepreneurship in fulfilling what the University refers to as its “educational mission.”

Senior Kady McFadden, a student representative on the University’s board of trustees, answers questions during the Student Union Senate meeting Wednesday night. (Matt Mitgang | Student Life)

Seniors Danielle Porter and Kady McFadden both participate in a unique extracurricular activity: They serve as the only student representatives on the board of trustees. The board of trustees, which acts as the official governing body of Washington University, has 50 or so members. The student representatives are encouraged to share their opinions during committee meetings.

On Wednesday, Porter and McFadden sat in for a question-and-answer session at the Student Union Senate meeting.

The session comes at a time when the representatives want to be more open about what they and the board do.

“I think sharing with the student body has to be a part of [the position],” Porter said.

Despite this, much of what goes on in the board meetings must remain confidential, so Porter and McFadden are only able to discuss certain points.

The role of students on the board

Between the two representatives, Porter and McFadden serve on the board’s committees for buildings and grounds, public relations, finance and undergraduate experience.

The board and the committees, except buildings and grounds, meet four times a year. The buildings and grounds committees meet once a month.

These committees are where most of the Board’s work is done, according to Porter, as the board itself focuses more on overseeing the various committees.

“Instead of a decision-making body or a doing body like Senate…[the board is] really more of an oversight body, and it’s almost the fear of the board is more powerful than the actual action of the board itself,” Porter said. “If something horrible, horrible was going to happen, the board would step in.”

Within the committees, the roles of the students are malleable.

“Specific board members have their own perception of what our role is,” Porter said. “There’s no set thing that we can or can’t do.”

Some members take a strong interest in the representatives’ perceptions of the school as a whole. Others want students’ opinions on specific voting matters.

A voice, but not a vote

Porter and McFadden are not able to vote on board decisions.

Porter and McFadden see their roles on the committee as largely symbolic and think that even if they were given votes, the gesture would be symbolic as well.

“Coming into this, I felt so privileged to even be chosen to be on the board, I didn’t look at it as I don’t have a vote,” Porter said.

Rather, the representatives serve as liaisons between the student body and the board. This is not to say, however, that the representatives ought to be approached by other students with messages for the board.

“I think our position is unique in that we can’t help every student who comes to us with an issue,” McFadden said.

How they were chosen

Porter and McFadden were nominated for their positions based on their previous involvement with University affairs. Porter is a biomedical engineering major, residential advisor, former president of the National Society of Black Engineers, former peer-led, team-learning (PLTL) leader and Cornerstone tutor. McFadden has been involved with SU, including serving as speaker of the Senate for a term, and Senior Class Council. McFadden also was instrumental in bringing the bottled water ban to campus.

Based on these credentials, Porter and McFadden were selected as representatives following a series of applications and interviews with members of the Department of Campus Life, the Office of Residential Life, Greek Life Office and several student organizations.

With additional reporting by Dan Woznica

Chancellor Mark Wrighton recently announced six new members to Washington University’s board of trustees. New board members Gregory Boyce, John Dains, Steven Leer, George Paz and Harry Seigle began their terms July 1. George P. Bauer began his term in December.

The new members were selected in a collaborative effort by both Wrighton and the board. The board of trustees’ main goal is to oversee the implementation of the mission of the University and to select and evaluate the chancellor. Much of what the board does relates to the endowment and how the interest from the endowment is spent each year.

“We try to pick people who have high integrity and commitment to the values we have for the community, which include an aspiration for innovation,” Wrighton said.

George P. Bauer
Affiliation: GPB Group Ltd.
Education: Bachelor’s and master’s degrees in engineering from Washington University.
Bauer is chairman and CEO of GPB Group Ltd., an investment-banking firm based in New Canaan, Conn. Bauer has spent 31 years with IBM Corp., holding executive positions in marketing, finance, and business systems, including chief financial officer positions of several IBM divisions. He also held leadership positions in IBM’s European operations. After his retirement in 1987, he became executive professor of management information systems at Georgia State University.

Gregory H. Boyce
Affiliation: Peabody Energy
Education: Bachelor’s degree in mining engineering from the University of Arizona,  advanced management program degree from Harvard University’s Graduate School of Business.
Boyce is chairman and CEO of St. Louis-based Peabody Energy, the world’s largest private-sector coal company. Boyce was once CEO for Rio Tinto mining company in London as well as president and CEO of Kennecott Energy Co., which became the nation’s second-largest coal company during his tenure. In April 2009, Boyce was ranked 114th in the country for highest CEO salary by Forbes magazine.

George Paz
Affiliation: Express Scripts Inc.
Education: Bachelor’s degree from the University of Missouri-St. Louis.
Paz is chairman, president and chief executive officer of St. Louis-based Express Scripts Inc., one of the largest pharmacy benefits management companies in North America, with more than 50 million members. Paz joined Express Scripts in 1998 as senior vice president and chief financial officer. Previously, he was a partner at Coopers and Lybrand, managing the firm’s Midwest insurance practice, and was executive vice president and chief financial officer for Life Partners Group.

Harry Seigle
Affiliation: The Elgin Company
Education: Bachelor’s degree from Washington University, J.D. from Northwestern University.
Seigle is principal of The Elgin Co. in Elgin, Ill., a company involved in real-estate acquisition and management, private investing and philanthropy. Previously, he was chairman and president of Seigle’s Inc., an Elgin-based, family-owned building supply company that was sold to Stock Building Supply in 2005. He worked for Chapman and Cutler LLP in Chicago before joining his family’s business, then known as Elgin Lumber Co., founded in 1881.

Steven F. Leer
Affiliation: Arch Coal Inc.
Education: Bachelor’s degree in electrical engineering from the University of the Pacific, MBA from Washington University’s Olin Business School.
Leer is chairman and chief executive officer of Arch Coal, Inc. He was president and chief executive officer from the time the company was formed in 1997 to 2006. Prior to the launch of Arch Coal, he was president and chief executive officer of Arch Mineral Corp., one of Arch Coal’s predecessor companies. He also has held executive positions with the Valvoline Co., Ashland, Inc. and Ashland Coal, Inc. Leer is a member of The Wall Street Journal’s CEO Council, a yearly conference that covers worldwide economic issues.

John F. Dains
Affiliation: Helm Financial Corp.
Education: Bachelor’s degree from the Olin Business School at Washington University.
Dains is chief executive officer of Helm Financial Corp., a leading railcar and locomotive operating leasing company based in San Francisco. Dains joined Helm Financial Corp. in 1987 as chief financial officer and was named president and chief operating officer in 2000. In 2005, he was named CEO. Before joining Helm Financial Corp., Dains worked at IC Industries in Chicago as vice president of finance for the Railroad Products Group of the Abex Corp. subsidiary. Dains made significant contributions to Hillary Clinton’s campaign.