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Arkansas State University System Board of Trustees Approves Henderson State Merger Agreement


LITTLE ROCK — The Arkansas State University System Board of Trustees today approved a merger agreement and transition plan with Henderson State University, which would become the ASU System’s seventh member institution.

Previously approved by the Henderson Board of Trustees on Nov. 21, the agreement is subject to approval of the Higher Learning Commission and action by the Arkansas General Assembly. ASU System President Chuck Welch said the target for completing the transition is Jan. 1, 2021.

On Oct. 24, the Henderson board approved a resolution to join the Arkansas State University System and proceed with development of a merger agreement. The board also voted in favor of Henderson retaining its name and mascot as a member of the ASU System. On July 29, Henderson signed a Memorandum of Understanding for the ASU System to provide various operations support services to the university.

Under terms of the merger agreement approved today, the Henderson interim president will now report through Welch to the Henderson board as part of an interim management process. Welch will chair the search committee for a new Henderson president, who would become chancellor of the institution following the merger. The search process will begin in January, he added.

“Henderson has a long history of serving students in higher education and will be an outstanding addition to our system,” said Welch, who served as president of Henderson from July 2008 to April 2011 immediately prior to becoming president of the ASU System. “It’s an institution that is very special to me, and I’m confident Henderson will be a mutually beneficial addition. We appreciate the Henderson board’s trust in us and will continue to work with the trustees toward a smooth transition.”

Henderson would become the second four-year institution in the ASU System and the third higher education institution to join the system in four years. Mid-South Community College in West Memphis became Arkansas State University Mid-South in July 2015, and College of the Ouachitas in Malvern will become Arkansas State University Three Rivers effective Jan. 1 pending approval of the Higher Learning Commission.

“This is an historic day for the ASU System,” said Niel Crowson of Jonesboro, chair of the ASU Board. “The pending affiliations of College of the Ouachitas and Henderson State are important as we focus on how to better serve students with quality educational opportunities as efficiently as possible. This will give us a significant presence in southwest Arkansas and give us more ability to control expenses for all our institutions through shared services and contracts.”

Trustee Price Gardner of Little Rock said he was excited about the opportunity with Henderson on the heels of the COTO merger.

“We’ve had a vision of expanding the footprint of the system and the brand and identity of the system,” Gardner said. “It’s a triple win for students, faculty and administration at those institutions because of what the system does in shared resources and collaboration.”

Additional provisions of the agreement include:

  • Requesting an expansion of ASU board membership from five trustees to seven, with the initial two new appointees by Gov. Asa Hutchinson having “specific familiarity with Henderson State.”
  • Creation of a Henderson Board of Visitors to be appointed by the governor of Arkansas pursuant to legislative enactment. The Board of Visitors would have an advisory function and serve as a liaison to the ASU president and board.
  • Giving the ASU System the right to retain a third party to review Henderson’s operations and financial standing. The ASU System has issued a request for proposals for third-party audit services.
  • Providing ASU System with ongoing management compensation that is consistent with the current Henderson MOU and the formula used by other ASU System institutions.

Moody’s Investor Services issued a report that determined Henderson State University’s decision to join the system is “credit positive” for Henderson because of increased oversight expected from joining the ASU System.

“ASU’s system of oversight, which has led to strong fiscal stewardship at its other campuses, is likely to help restore balanced operations at HSU,” the report said. “Governance and oversight by the State of Arkansas will continue to be credit positive for HSU and enhance its strategic position. The state demonstrated solid oversight both through supplying short-term cash flow relief for HSU and encouraging it to join the ASU system.”

Founded as a private institution in 1890, Henderson has a strong liberal arts heritage with more than 65 undergraduate and graduate programs. It became a public institution in 1929 and is the second oldest university in Arkansas under state control. Henderson, which competes in NCAA Division II sports, would become the third ASU System institution with an intercollegiate athletics program. Arkansas State has an NCAA FBS Division I program, and ASU Mid-South competes in NJCAA Division II men’s and women’s basketball.

In other business, the board elected Stacy Crawford of Jonesboro to serve as chair effective Jan. 1. Gardner was elected vice chair, and Christy Clark of Little Rock will be secretary.

Crowson, in closing remarks as chair, said he was proud of major strides the ASU System has made, including the mergers, increased institutional reserves and enhanced financial reporting processes. He noted national concerns about the long-term sustainability of the higher education model as we know it today.

“I share these same concerns,” Crowson said. “I am also proud of our recent efficiency study and the good work that is happening as a result. I believe today we are more strategic, analytical and accountable than we have been in the past. However, I do not think we can just rest on these accomplishments. We must continue to look to the future and consider whether our model is sustainable in the long run. We must be strategic and innovative.”

The board also approved a resolution for the naming of the Electric Cooperatives of Arkansas High Voltage Lineman Technology Building at ASU-Newport.

The ASU System, based in Little Rock, currently serves almost 34,000 students annually on campuses in Arkansas and Queretaro, Mexico, and globally online with a total operating budget of $285 million. The ASU System includes Arkansas State University, a four-year Carnegie R2 Doctoral research institution in Jonesboro with degree centers in Beebe, Mountain Home, Blytheville, Forrest City, and West Memphis. Arkansas State University Campus Queretaro opened in September 2017. The system's two-year college institutions include ASU-Beebe, with additional campuses in Heber Springs and Searcy and an instructional site at Little Rock Air Force Base; ASU-Newport, with additional campuses in Jonesboro and Marked Tree; ASU-Mountain Home; and ASU Mid-South in West Memphis.

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