Substantive Change: Control, Structure or Organization
Institutions contemplating a Change of Control, Structure or Organization should contact HLC as early in the process as possible. Candid and timely communication between HLC and an institution helps facilitate the review process. Review the Change of Control, Structure or Organization process and related policies in detail.
Change of Control, Structure or Organization Process
Related Policies
Change of Control, Structure, or Organization (INST.B.20.040)
Processes for Seeking Approval of Change of Control (INST.F.20.070)
Monitoring Related to Change of Control, Structure, or Organization (INST.F.20.080)
HLC policies on Change of Control, Structure or Organization define HLC’s oversight regarding proposals that change, or have the potential to change, the governance of an institution or its fundamental structure or organization. This includes, but extends beyond, change of ownership transactions (such as merger or sale). As a result, per HLC’s Glossary, the term “Change of Control” more broadly refers to any proposed change to which these policies apply.
Approval of Change of Control
The policy also stipulates that the only decision-making body that can take action to approve an application for Change of Control, Structure, or Organization is the Board of Trustees. Peer reviewers, with the support of HLC staff, work together to provide the Board of Trustees a report analyzing the evidence available and evaluating whether the application submitted by an institution satisfies the Key Factors articulated in policy for approval.
These changes include, but are not limited to, eight major types of Change of Control. Additional scenarios may also trigger a Change of Control review:
- If an institution forms a relationship with an entity that has no corporate or financial relationship with the institution to perform certain services;
- If an institution works with other related accredited institutions to pool or consolidate services into another related entity that may be another corporation or may be a division of one of the institutions;
- If an institution has a parent or affiliated corporation that provides various services to the institution, or if an institution intends to purchase or merge with another accredited institution that has an existing relationship with a parent or affiliated corporation, and the relationship with the parent or affiliated entity is to be maintained after the purchase through a shared services relationship with the former parent or affiliated corporation; or
- If an institution forms a new related or separate corporation into which the institution transfers some of its existing operations and/or services and this new corporation would then provide services to the accredited institution; or if an institution may transfer assets related to academics and student services into the new related or separate corporation, and the institution is expected to become the services corporation (which may also be authorized to sell its services to other institutions with which it had no previous relationship).
Notification of Change of Control
Finally, as with any category of substantive change, there are certain circumstances in which only notification to HLC is required. Institutions contemplating a Change of Control should consult with their staff liaison as soon as possible to confirm whether notification or approval is appropriate under HLC policy. When notification is appropriate, it should be made in advance of consummating any such Change of Control.
Questions?
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