####
 If I may interrupt your conversations to convene us. This is
going to be a very busy day. We're discussing the Intellectual Climate Task Force
report. Let me begin by affirming again my gratitude to all of those who were
associated with it. Most especially Pamela for her deft chairing of the project
and say again that the results were so much more than I had even hoped for, and a
fortiori more than I had expected when we had set out. I think that if we
dedicate ourselves to the examination of the report and the implementation of its
recommendations as appropriate this year it can truly energize us as a faculty,
as a community. It can also thrust us into the leadership position in the country
in terms of attention to the quality and the character of undergraduate
education; something that we are often criticized for paying too little attention
to in research universities, something that I frequently find myself defending
with respect to Chapel Hill because I believe it to be the case that the quality
of attention to undergraduate education here today is as great as it was in my
day and in my day it was everything I could have asked for. So I think we begin
from a good base.

I want to say again, especially to the Tar Heel reporters, who I believe by now
have gotten the message, that it's not as if we're trying to fix something that's
broken. We're trying to take something that's good and make it better. That is
the spirit in which we should proceed. We are already. I want to ask Dick
Richardson and Sue to just very briefly adumbrate some of the things that they
are doing and have been doing that are in the spirit of the Intellectual Climate
Task Force Report. For example, as we're focusing now on preparing for the
upcoming short session of the legislature and promoting the renovation of the
undergraduate library, we have the planners of that project looking at the
Intellectual Climate Task Force Report and integrating the recommendations
regarding meeting space and that sort of thing into the conceptual planning of
the renovation of the library. We are doing that also with the new Institute for
Arts and Humanities building.  Ruel Tyson has jumped to the occasion of
integrating the thinking of the Intellectual Climate Task Force committee into
his thinking about the new Institute for Arts and Humanities building. So we're
moving in terms of the physical reconfiguration of the campus even Lenoir Hall
the design of which predated the final report of the Intellectual Climate Task
Force did not predate the thinking of the committee that was looking at physical
spaces on campus and outside the classroom interaction with faculty and students
so the program that was written for the Lenoir Hall renovations took that into
account as well.

Dick, if you could just briefly say some of the things you're doing and then I'll
ask Sue to do the same and then we'll go to questions and answers and then we can
start discussing.

####
 I was just going to observe that emblematic of the kind of
fecundity of thought that can be engendered by the report and the discussion of
it is the plan that Risa Palm has come up with for freshman seminars. She has
proposed 160 freshman seminars with 20 students each so that every single student
here would be in a freshman seminar first semester which I think is wonderful
because we know that all of the students that we admit are capable of doing the
work here which raises the question why do we have attrition the freshman year.
One of the things that we know is that students here are confronted with the
demand that they do a significantly greater level of work in preparing for class
and writing papers and taking tests than they had to do in high school. Sometimes
they just fall by the wayside and many studies that I've seen have shown that
what discriminates between those students who stay and those students who drop
out is those students who stay have almost in every case had a relationship,
one-on-one kind of relationship, with a faculty member or graduate student/mentor
somebody in a senior position who has been important to that student in answering
questions or just providing a sympathetic ear to the student's problems. The
students who drop out rarely have had such an experience. So in a freshman
seminar with 20 students, every student will come into a pretty intimate
relationship with a member of the faculty which I think will significantly reduce
freshman attrition. I'm very enthusiastic about the plan that Risa has proposed.

Let me stop there. The purpose of this is not for me to talk to you about the
Intellectual Climate Task Force Report but for you to talk about it among
yourselves. Before we go into that, let me ask if there are any questions about
anything?

####
 Okay. what are their concerns?

####
 Had I had it to do over again, I would have made an effort to
have the kind of dialogue that I think would be very healthy to have about the
nature of the Nike contract and the idea of entering into a contract with any
corporation for sponsorship of any part of what we do, similar to the Nike
contract. So I regret we didn't do that. The question about the relative role of
academics and athletics is certainly an appropriate one and one that is vexing to
me. I have two perspectives on it: I have the perspective of Michael Hooker, the
philosopher, who thinks things are entirely out of kilter in society. We misplace
our values. I mean yesterday we had a marvelous reception for Dean Smith when he
announced his retirement and everybody turned out but as I looked around the
room, I'd never seen as many television cameras or as many reporters. I dare say
if we say had a ten strike where every Nobel Prize awarded in a given year was
awarded to a member of the faculty of this campus and we paraded them all out to
meet the press, you might get a couple of television stations to cover it but
nothing at all comparable to what we had yesterday in the announcement of Dean's
retirement. And Dean observed to me as we were preparing for the press
conference, "There's something wrong with the values of a society that would put
this much emphasis on a coach retiring." So I believe that strongly. The
institution of intercollegiate sport in society has reached a point that it is
difficult for us to manage the tension between what we know we are and want to be
and what we have become as a purveyor or provider of public entertainment, which
is what intercollegiate athletics is.

Now I can wax philosophical about the value of participation in sports for the
individuals that do it, but if you really believe that then you emphasis
intramural athletics which makes opportunity available for a much larger number
of people. The truth is that we are part of the entertainment industry like it or
not. One institution simply cannot unilaterally disarm. When I was preparing to
take over this post, one of the things that I did was to go back and look at the
experience of Frank Porter Graham with respect to intercollegiate athletics. 
Biographers probably haven't pointed this out but it seems to me that the
beginning of his decline in this state was when he tried to de-emphasize football
at Carolina. If you haven't read that episode in the history of this university,
go back and read Dr. Frank's struggles with that. He had his head handed to him.

The problem I see from a philosophical perspective is a problem in society more
than a problem at this university. The challenge as manager at this university is
simply to keep things in balance. In that regard, we are the only major
university, to my knowledge, that hasn't had a scandal in its athletic program in
the last thirty-five years. And we haven't. The last one just preceded Dean's
arrival and, in fact, resulted in Dean being here, being named the basketball
coach. Which, as I understand it, was initially an effort to de-emphasize
basketball at Chapel Hill, (laughter) hiring an assistant coach rather than going
out and getting a big-name coach.

So I think we do a good job. We have done a good job but it is something that I
worry about daily and if you talk to Mack Brown he'll tell you he worries daily
about the fact that while he tries to recruit the best players he can and
certainly provides all the right examples for them and all the right messages for
them, they are, after all, eighteen to twenty-two year olds and they have their
own cultural values, as we know from wrestling with the problem of drinking on
campus. We have got far more embarrassing problems coming from our
non-intercollegiate athletes than we do from our intercollegiate athletes of
late. It is a problem when you're dealing with this age group.

I'm just pleased that we have not had an institutional scandal where it looked
like we were bending the rules or breaking the rules of integrity in
intercollegiate athletics. But, again, I don't want to rest on our laurels. It
requires constant vigilance. The members of your department are right to raise
the issue of the balance between academics and athletics. I think we do a pretty
good job of it. They are right to raise the issue of corporate sponsorship of
anything that we do. There is a lot of corporate sponsorship here. Those are
issues that I hope we will continue to discuss and debate and worry about in the
years ahead.

Anything else?

Okay. Thank you.

####
 Let me address the challenge that we had in producing the vision
for educating our students in the 21st century. I've given a lot of thought to
this. I don't think many people think more about technology and its impact on
society than I do and I am absolutely convinced that, in order to prepare
students for a technology-infused 21st century, what we need to do is pretty much
what we've been doing for the past 200 years. That is, provide a good liberal
arts education. The ideal is to enable students, to give them the wherewithal, to
live meaningful and productive lives in an economy that will be greatly
transformed from the one we've grown up in. A technology-infused economy where
change is the only constant and where there is a lot of chaos. If you want to
enable students to live a productive life in an economy where technology's
continuously changing, you don't give them the knowledge of the latest state of
the art principles of a particular discipline, you acquaint them with the
subtending epistemology of that discipline and that's what we've always done. If
you want to enable them so that they can retool their skills as they go along in
a changing workplace and if you want to enable them to live a meaningful life in
a chaotic world, then you teach them the eternal verities. You teach them the
classical disciplines of the humanities, the arts, that tell us about the world
and our place in it and give us a sense of comfort in the world and a sense of
identity in it.

Finally, the most important thing that we can give them to prepare for a world we
can't fully envision, is the ability, the capacity to think analytically,
critically, to make judgments in environments of ambiguity and uncertainty and
that's what a good liberal arts education does. That's why the intellectual
climate is aimed at doing, that is producing an atmosphere where everybody will
be engaged with the important questions of the day, whatever they are. Whether
it's Nike or binge drinking or whatever it is, people will be engaged with those
questions. There'll be an exciting and vibrant atmosphere where people are
concerned about ideas. I like the report, obviously, and I do think it addresses,
though not directly, the question of what kind of education do you want to
provide for the 21st century.

First Year Initiative

####
 Let's begin. Professor Craig Melchert will present a memorial
resolution for Professor Emeritus Robert Howren.

####
 Thanks Bill. I was, as some of you know, just up at the
University of Michigan with a delegation from Chapel Hill and learned there that
the M Club which is the Rams Club counterpart, like the Rams Club here, accounts
for most of the philanthropic donations to the academic programs at Michigan. 
Bill, we appreciate it very much.

Let me mention a few things and then invite your questions. We just last week
awarded the next round of technology grants. These are for faculty technology
projects and that amount was about $2 million dollars. We had a number of
proposals that were not funded but that I thought and Dick Richardson thought
were worthy of being funded so we have freed up another $400,000 to fund those
and I think that Dick just notified the recipients of those grants today.

We are also going to take some of the money that the legislature gave us in the? 
it's very difficult to describe? The legislature each year appropriates money to
us and then based on historical patterns of vacancies, they anticipate how much
money we won't spend that has been appropriated and they take that back. It's
called the reversion. This year they reduced the reversion, at our request, from
2% of our personnel budget to 1% and they directed that we spend that money on
technology and libraries so we are going to take some of that money that is
directed to be spent on technology and issue another request for proposals from
faculty this time to focus on putting your course on the internet or developing a
course for the internet if you don't want to put on the internet one that you've
got already.

The focus on the internet is a strategic ploy on our part in anticipation of the
growth of the internet as a major means for delivery of education. When I talk
about internet based courses, I get the reactions from the faculty that range
from mild disdain to outright hostility and very little expression of support but
I can tell you from talking with other university chancellors and presidents and
from my visits to other campuses that this is going to be a substantial part of
the future of higher education, like it or not. And there are many reasons for
that and we could discuss them and should discuss them at some point in the
future but it is with us, like it or not, and I am convinced that internet-based
education is going to change the economics of higher education so that if we want
to continue doing what we have always prided ourselves on our doing well, that is
traditional liberal arts education for residential 18 to 22-year-olds, if we're
going to continue doing that, we will have to enter the arena of internet-based
education as well, not because we will use it to serve that population but
because we will use it to serve the other 95.5% of the world's population that
lives outside the United States and where there is an enormous demand for
American higher education.

Why do we have to serve that market? Why can't we let somebody else? Because the
revenues associated with serving that market, the global population, will change
the economics of higher education. Those institutions that get into the business
of global education, internet-based, will have revenues that will dwarf the
dreams of Avarice and will enable those institutions to buy the best faculty, to
build the best facilities and to, ultimately, buy the best students. So, if we
want to maintain the position in higher education that we have had for the last
hundred years, a position of leadership, of having the best facilities, the best
facilities and the best students, we have to get into the business of
internet-based education. I have absolutely no doubt about that. Just emblematic
of the change to come is that, as some of you know, the school of management, the
business school at Duke last year went online with an internet-based MBA degree,
Master of Business Administration degree, and for this degree they charge a
little over $80,000 in tuition and they had to close out enrollments because of
demand. They marketed it only in Southeast Asia. That gives you some sense of the
scales of magnitudes that we're talking about in this kind of arena. Like or not,
it is with us. The challenge for us is to ensure that internet-based courses have
the same quality that our residential courses have or, if they don't, they at
least have quality that satisfies our standards and that is a challenge for us.

We have entered into relationships with two companies recently that will assist
us in developing internet-based courses. One, College Access, or University
Access, a company founded by one of our graduates, a Morehead Scholar out in
California, is working to develop video-based courses, video-based content and
the other, IXL, an Atlanta Company, that has set up a division specifically to
provide templates for internet-based courses to do the marketing associated with
them and so forth. We have invited people from those two companies to come on
campus and to meet with faculty who are interested in putting their courses on
the internet.

Let me say something about Nike. I have the feeling that this is going to be a
recurring theme. Several people have asked me why didn't we do what Duke has done
which is they announced last week they're requiring that all of the vendors that
license their logo and manufacturer apparel with their logo on it have codes of
conduct that they require their licensees to adhere to. Well, actually we did
exactly what Duke did. We did it at the same time they did because every
university that contracts with the licensing agent that we contract with and that
Duke contracts with did it at the same time. We all did it together. Duke just
had the good sense to call a press conference and announce it. So they got the
credit for it but we had done what they did.

Yesterday there were officials on campus from Nike and they met with some
students. I met with them earlier in the day and I made a request of them and I
am happy to say that they have agreed to the request. My request was that they
invite a couple of students and the Chairman of the Faculty Council and a
reporter from the Daily Tar Heel to go to Southeast Asia and tour whatever
factories over there they wanted to tour and see whatever they wanted to see and
come back and tell the rest of us what they saw. To Nike's credit, they agreed to
do that. So I think that that will be an important next step in the campus
dialogue about Nike.

I want to again say that I think there's a much deeper issue here which I would
love to have discussed. It goes far beyond Nike. It goes to the issue of the
values and the character of our culture. A culture where people would pay $150
for a pair of sneakers that cost probably $10 to manufacture and $50 to advertise
and the rest is profit. There might be a little hyperbole in that but there's not
a lot. The point is that our values as a society are out of whack when we do
things like that and when there are, at the same time, children who go without
adequate health care, who go hungry. A society that puts that kind of emphasis on
sport is a society, I think, that needs to examine its values and I hope that
over time we can do that. But, again, I say with respect to the Nike contract
itself, I am satisfied that we have not compromised our integrity in signing it. 
I am convinced that we have not. But I'm also open to being dissuaded from that
view by considerations that have not yet been adduced and to which I am open.

Let me announce that we have filled the Dean's position at the School of
Business. Most of you probably read the article this week, the announcement of
the appointment of Robert Sullivan. Bob was Dean of the School of Management at
Carnegie Mellon University. There he did two things that we found particularly
attractive. One was that he globalized the curriculum. That is he refocused the
school of business there from a focus primarily on domestic business to a focus
on business as a global phenomenon. And the other thing that he did was that he
worked significantly to bring that campus into the world of distance learning,
digital-based education. In this case, primarily satellite-based education. He
formed a partnership between the school of management at Carnegie Mellon and
Technologico de Monterey in Mexico which, as some of you probably know, is the
MIT of Mexico. By far the best institution of higher education in Mexico and
which has five dedicated satellites and a footprint that covers most of Latin
America and does distance education throughout Latin America. Sullivan, at
Carnegie Mellon, brought them into partnership to provide business education
throughout Latin America. Those are the two aspects of what he did at Carnegie
Mellon that were particularly impressive to us. He has more recently been
director of IC Squared which is the University of Texas' Center for
Entrepreneurship which examines questions of technology transfer, the creation of
high-tech companies based on intellectual property that comes out of
universities. He's done a good job there. That comports with what the Kenan
Institute for Private Enterprise does. We think he will be an appropriate and
good dean then for the Kenan Flagler Business School.

I think most of you know that we have consummated our negotiations with Madeline
Grumet to be Dean of the School of Education. I've spoken about her on a number
of previous occasions. We are awaiting approval of her appointment. Madeline is
Dean of the School of Education at Brooklyn College of the University of New
York. What especially appealed to us about Madeline was the way that she had
brought the School of Education at Brooklyn into the service of some of the
poorer school in all five boroughs of New York. I am convinced that we can
achieve the most results if we focus on some of the poorest performing schools of
North Carolina and I think this probably came from my 100 county tour where it
was apparent to me that the schools in Wake County and Forsyth County and
Mecklenburg County can do pretty well by themselves. They don't need a lot of
assistance from us but some of the under-funded schools in the rural areas can
use every ounce of assistance that we can provide. And that is something that
Madeline has done in the boroughs of New York beautifully with the resources of
Brooklyn College and so I look for her to do that here.

And finally, let me say something that arose from a conversation that I had with
Lolly Gasaway last night. We were sitting together at the Spangler Family Dinner
and we talked about web publishing and we were talking about the high cost of
journals and I raised the question well, why don't scholars simply put their
publications on the web using their own server and thereby bypass the expensive
process of scholarly publication via journals? And Lolly said, "Well, it's
because of tenure and promotion considerations. You need the certification of
refereed journals, peer-referred journals." And I observed that we could simply
ask scholars who have published on the web without the benefit of referees to
submit in the review process of tenure and promotion, submit their three or four
best articles and then we send them out for peer review, get an appraisal back
and we would have accomplished the same thing that peer review and refereed
journals accomplishes, thereby saving the world a great deal of money and the
planet a lot of trees. Lolly thought it sounded okay. I'm going to ask the
Chancellor's Advisory Committee which looks at these matters to investigate the
question of whether it isn't appropriate to begin considering in tenure and
promotion decisions not just refereed articles but unrefereed web published
articles because I am convinced that that is part of the wave of the future.

Let me stop there and invite questions.

####
 Dick can you respond? It would be a great surprise to me to
learn that the library had a flat budget.

####
 I'd sooner believe that hippopotamuses can fly than that the
library has a flat budget this year.

####
 I know that our library has moved up substantially here over the
last two years in the research library group? the hierarchy? as the result of
funding increases that have come over the last two years. There's no sense in
debating a priori what is a matter of empirical fact. We'll find out and we'll
report back to you.

####
 Yea, there's two companies we've been working with. The one
founded by the Morehead fellow that's called University Access. What they do is
work with faculty members to assist them in putting their course on videotape and
they're working now with Bob Connolly in the School of Business to put the
macro-economics business course, Business 18 I think it's called, on video. What
they bring to the equation is production-quality studios and coaches who have
been in the business of producing training videos for a long time and so know how
to coach faculty members to appear to be more than just a talking head. I mean,
if you videotaped me, this exchange, it would be pretty boring for people who are
accustomed to seeing graphics and so forth to illustrate a lecture and so they
coach you in how to do that. How to make a lecture more interesting for video. 
That's that company. And what they're doing is developing, in the jargon of the
trade, content. That is courses that have been reduced to a videotape so that
when courses are broadcast over the internet they can, via compression technology
that isn't yet available, they can be available to be delivered over the
internet. The other company is a company, IXL, that has a model template for the
structure of a course on the internet and has a lot of graphics and still
pictures and video footage and so forth that can be used to enhance a course. So
what they do is work with a faculty member and figure out how to enhance the
course with visuals. The same thing you might do if you were going to enhance a
course that you were presently teaching with overheads or with slides. Something
that you may not have thought about doing. Went through this myself a few years
ago where I had a standard introduction into the history of philosophy and it
occurred to me one day it might make it a lot more interesting for students if
instead of talking about Greek philosophers I flashed up a photo of a bust of
Aristotle, for example, and provided that visual image and it worked a lot
better. That's the kind of thing that these coaches do. So that's what the
companies do and then they market the courses and can assist with the
registration.

####
 Sure.

####
 Yes.

####
 Well, the cost to us won't be anything. We're going to share
revenues with them that derive from delivering internet-based education. So we
simply share the profits.

####
 Because somebody else does something poorly doesn't mean we have
to. What I said was that the challenge for us was to maintain our standards and
not put on the net a course that doesn't meet our standards. That's the
challenge. How do we do that? I don't know. We work on it. I said that I'm
convinced that if we want to keep doing what we have always done well, that is
residential liberal arts education for 18 to 22-year-olds, then we need to be
willing to embrace the changes that are taking place in global distance education
because the revenues attendant to that will change the economics of higher
education. I am absolutely convinced and I cited the Duke example. The economies
of scale that can be achieved via the internet should make it more attractive not
less attractive to do that kind of education. And it should be possible to do it
with exactly the faculty we have which is one of the reasons that we're issuing
these grants for people to put their courses on the internet.

Look at some of the internet based courses before you judge. The ones I've looked
at, the ones we've produced seem to me to be pretty good. Just to illustrate the
economies of scale remark, consider this: We, right now, have a master of public
health program that is largely but not entirely internet based and it is
delivered to public health officials throughout the state of North Carolina now. 
The reason for creating it was as a way of serving the state of North Carolina. 
There are a lot of public health officials throughout the state who don't have
adequate training in public health and that world, as you know, is changing
rapidly and there's an additional training that is needed for them but these are
people in their thirties and forties who have kids in school, mortgages, can't
quit their job, pull up stakes and move to Chapel Hill to get a masters degree. 
So we can serve them, are serving them, by providing internet-based master of
public health degree. The marginal increase in cost for serving a million people
around the globe versus the 100 people in North Carolina we service is zero
because once you're on the net you're on the net. So that gives you some sense of
the scale of what is possible we're talking about. And, again, if we've satisfied
our quality standards for the public health officials for North Carolina, we will
presumably thereby have satisfied our quality standards for whatever our audience
is.

But these are issues that have to be debated, discussed and we have to be
satisfied in the end that we have met our quality standards.

####
 You've lost me. What were their --  What did they say, what did
he say?

####
 You lost me. Please let's pursue the "one hand giveth and the
other hand taketh away." I don't know anything about Mack Brown and his players
so I can't respond to that. But I was present for the check from the Educational
Foundation so what is the issue there?

####
 Which gesture concerns --

####
 As I say, I can't respond to that but I certainly concur with
the sentiment that characterize the award of the check that's something that's
encouraging intellectual --

####
 If the statement is as you suggest, it seems to me that that is
inappropriately cutting off debate but I don't want to imply by assenting to the
conditional that I am assenting to the antecedent to the conditional. (laughter)

I have to --  I have to -- please.

####
 Well, I'm counting on the community to offer coaching tips to
the students before they go and I suspect that if the students are picked that
I've been talking with over the past couple of weeks, I don't think anybody is
capable of pulling any wool over their eyes. I think they'll probably do a pretty
good job of observing what they observe and I would imagine the same for the DTH
reporter. If Pete agrees to go, I think it would be hard to dupe Pete.

I have to beg your indulgence. The Center for Study of the American South is
having it's fund raising affair down in Louisiana this evening and tomorrow. So
I'm going to duck out of here at 4:00 and go down help them raise money.

Thank you very much for your attention.

####
 Yes, the last time when it was first broached I affirmed my
support for it and I reaffirm my support for it today. I would have -- After the
painful case of last year, I would have exulted in the opportunity to meet with
the Faculty Committee and discuss their perspective and my perspective but I was
forbidden from doing that because of those procedures.

####
 We're changing the normal order of things today so that we can
hear from the President. The University President really needs no introduction
but it would be inappropriate not to give her one so I give you Molly Broad. 
(applause) (laughter)

####
 Well, as most of you know, this past week we learned that we're
one of the very few institutions in the country to be awarded two Rhodes
Scholarships this year. We have our new Rhodes awardees here. I would like them
to introduce themselves to you so that you can hear from them and see them. And
so Leslie and Jonathan if you would just come up and introduce yourselves and say
where you're from and what you're studying please.

(applause)

####
 As Jonathan indicated, one of the reasons that we were
successful is that we have a very good program of identifying prospective Rhodes
candidates and then preparing them for their interviews. Miles Fletcher heads up
the program. A number of you participate in the mock interview which is crucially
important so thanks to Miles and thanks to all of you. Thanks also to Ann Repp
from Dick's office who does Yeoman's duty in not just the Rhodes but the Marshall
and the Churchill and the Truman and the other scholarship programs. We are proud
of these students.

Time is short but I have a number of things that I wanted to mention. Before I do
let me introduce two other people. One is the new Financial Aid Director, Shirley
Ort. Shirley could you stand in the back please. (applause) Shirley comes to us
from the state of Washington where she was the Financial Aid Administrator for
the Washington Higher Education Commission. Now that's a job that doesn't exist
in North Carolina because we don't have state-administered financial aid programs
as some states do. People would argue that North Carolina gives its financial aid
in the form of low tuition and high state appropriation and there's something to
be said for that but most states, as many of you know, do have a
state-administered financial aid program.

The other person I'd like to introduce is Jerry Lucido, our new Admission
Director. Jerry, please stand. (applause) Jerry comes to us from the University
of Arizona where he worked with Molly Broad when Molly was in Arizona.

Let me say something about the fraternity incident -- the stealing of Christmas
decorations. I'm still so angry about this that it's hard to keep a civil tongue.
 I alternate between rage and humiliation on the part of us all. As you know,
Carolina has a time-honored and cherished student judicial process or student
honor system. So while everybody, including myself, would like for the Chancellor
to jump in and do something appropriate, it would not be appropriate to do that
because we have a student judicial process. The issue is now before them. 
However, the national fraternity, the SAE national has met with Sue Kitchen and
with Ron Bender from our Greek Affairs Office and they have issued a set of
sanctions against the fraternity which includes, if I'm not mistaken, denying
participation in any more fraternity activities to the pledges who stole the
decorations. It also includes not permitting the fraternity to rush for new
members in the Spring semester as they would normally do and, in fact, they will
not rush againÉ. we have put them on probation and they will not rush again until
they satisfy Sue Kitchen and the Greek Affairs Office that they have reformed
themselves. The fraternity is also required immediately and forevermore to be
substance free. That means that they can't have alcohol in the fraternity even
for people who are of the legal age for drinking. They, of course, will be
expected to make restitution for the decorations that were stolen that have not
been returned for whatever reason. This is very much an investigation that is
still going on but I wanted to tell you where we are with respect to it.

Let me also say something about the Officer Swain case. I have been criticized in
the press for not speaking out on this issue. I know that you know that due
process precludes my doing so. This is a case that is still under appeal and so I
cannot say anything publicly about it because doing so would compromise the due
process rights of Officer Swain and would compromise the privacy rights of
Officer Swain. So I can't say anything. Now Susan Ehringhaus tells me that where
the University is deemed to have a compelling interest in revealing what would
otherwise not be revealed from personnel files, we may do so. And so when the
appellate process is complete, I will make some appropriate public statement,
particularly because it pertains, among other things, to a member of our Board of
Trustees. So I will make appropriate public statements but not until the appeals
process has played itself out and I know that you understand that from previous
personnel issues. I wish the press shared your understanding.

Let me also comment on the transition in the football coach. I will, as I've
indicated to you before, I'm not going to defend intercollegiate athletics or
it's place in American higher education. I have been quoted in the Chronicle
recently as saying it's absolutely bizarre. And I believe that. (laughter) That
is if you are setting out to design American higher education and build sports
into it, you would not build anything at all like what we have evolved but that
this University will be a major player in the world of intercollegiate athletics
was decided, I would imagine, if not before then at least in 1906 when President
Venable was run out of town because we lost to Duke 66 to 0 in football. Frank
Porter Graham, you will know, probably, protested and tried to get overturned the
institution of awarding financial aid to students because of their athletic
ability. He thought that that was making professional athletes out of football
players and I think it's fair to say if you go back and study the matter that
that was the beginning of Frank Porter Graham's decline in North Carolina. So I'm
not about to take on the forces of football except to say as I said in the
Chronicle, all I can do is to administer a program to the best of my ability that
has integrity and I will continue to endeavor to do that. And, as I said, I also
fear that at any point in time we could be embarrassed by something that took
place in the intercollegiate athletic program but I will endeavor to make sure
that that doesn't happen to the maximum of my ability.

Let me say something about coaches salaries, particularly the revenue sports;
that is football and basketball. I think you understand that we are one of a
handful of institutions in the country that does not move money from what would
be the academic budget into the athletic budget. That is we have an athletic
program that is self-supportive. It's budget is, I think, about $27 million. It
is a substantial budget and in order to keep that level of revenue up, we have to
maintain a program that, to put it simply, wins. And, I think, does so with
integrity. We pay competitive market wages to get the best coaches. We have done
that in the case of basketball and football for a long time. The sources of funds
for football coach's salaries do not come from the general coffers of the
University. They come from the program itself and then only a small portion comes
directly from the program. It is about a hundred and --  I think in the case of
the new coach whose contract will be approved by the Board of Trustees soon, I
believe it's about $130,000 base salary and then the add-ons that bring it up to
the level of I think it's roughly $400,000. The add-ons come from summer camps
that the coaches run, the media contract where they have television shows and
radio shows, from the Nike contract, speaking engagements, and a number of other
sources. So when you aggregate all that together, you get the level of salary
support that the market demands. I think that's what I wanted to say about that. 
I'm happy to answer any questions about it.

Finally, as time is flying, let me skip over to the departmental visits that I
think I reported to you last time. I'm journeying around to departments with Dean
Palm and just learning about the departments. These are enormously valuable
visits for me and I think for the Dean as well. I am having confirmed for me time
and time again as we visit departments the correctness of the program that we
established to award technology grants to faculty to develop pedagogical uses of
digital technology in the classroom. One of the things that I find when I talk to
faculty about digital technology is a lot of restiveness about our adulterating
what we do on campus by infusing it with digital technology that diminishes the
quality of what we do. And I want to make sure that there's no misunderstanding
about my interest in digital technology and distance learning. I think the
digital technology in the classroom has the potential in many cases substantially
to enhance the quality of pedagogy but I would be the first to agree with the
detractors who believe that distance learning is not what learning is in the
classroom. The use of distance learning, though, is to serve populations that
otherwise would not have access to higher education at all. Such people as
holders of associates degrees throughout the state that I encountered in my 100
county tour who graduated from one of the community colleges. They are typically
in their thirties, forties, early fifties, have jobs, mortgages, kids in school. 
For them pulling up stakes and moving to a four year campus is simply not an
option. That is an undeserved population that would love to get a baccalaureate
degree and providing courses toward the baccalaureate degree with distance
learning is something that I think is something that we should do to further our
public mission. I also believe that the real large markets for distance learning
will be outside the shores of the United States; it will be in the global
community because English has become the global language and every nation that
has a developing economy has a shortage of trained labor and so is thirsting for
American higher education. That's why, for example, real estate developers from
Southeast Asia, at least before the crash, were coming to us and importuning us
to come over and operate campuses as Duke had agreed to do in Thailand. We don't
have the personnel to do that. I don't know where Duke was planning to get the
personnel to do it. But obviously with distance learning you can serve that
market and I think that those who do, those universities that do, will have
enormous volumes of revenue that they will then be able to pour back into faculty
salaries, student financial aid and facilities, construction and renewal. So I
think it something that we should do.

And, finally, I have two extra tickets to the jazz concert tonight. Anybody who
would like to go is welcome to my two extra tickets. I'm happy to take questions.

####
 Well, what is really distressing about that is the lack of human
sensitivity to the feelings of other people, the people whose decorations were
stolen. There's a lack of moral compass here that is really frightening and I'm
assuming that it is not limited to the SAEs. So what that tells us is we have an
educating job to do. I suspect it's not limited to the Greek system. I shudder to
think -- There are structural features to the Greek system that may have created
an environment for this pledge class competition, that sort of thing. I think
that we need all to examine the extent to which we provide a moral compass to the
students, the undergraduates that we educate and it's a moral compass that
historically students arriving at Chapel Hill would have brought with them. They
would have brought from the towns in which they grew up, the families in which
they grew up and why that's not the case now I don't know. How students could do
something like this to other people and not be dumb struck by the insensate
character of it, I don't know. It just baffles me. I'm still trying, myself, to
put the pieces of understanding together to decide what we should do as we go
forward. Obviously the fraternities will all get the message that you don't do
that kind of thing. My concern is whether they will be able to recognize the
genus in future specific instances and so be able to apply the lesson that you
would hope that this example would provide. If they have the capacity to do that,
the SAE's would have figured it out in advance. So I'm really troubled by the
whole thing but I appreciate your question.

####
 Well, the students will certainly communicate and our ability to
do so is somewhat limited by the Buckley Amendment as the Family Education Rights
and Privacy Act as you know what we used to be able to do in functioning in loco
parentis we can no longer do. But we will do something appropriate and you can be
sure that I will say something appropriate and right now I do a letter to the UNC
community, multiple thousands of these go out and we had just about put the
finishing touches on my letter. I'm now revising it to incorporate a reference to
this affair and I'm not exactly sure what I will say. I always test my reaction
to things especially where they involve students with my sixteen year old
daughter who assures me most often that I'm an old fuddy-duddy who just doesn't
understand but I'm happy to say Alex, when we talked on the telephone, was
similarly outraged. And it was not disingenuous on her part. It was a genuine
expression of moral indignation and so I'm hopefu1 that there is something there
among this generation of young people that we can work with.

####
 Forty-eight hours.

####
 My calendar expert is the provost who has conveniently departed.
 (laughter) There he is. You made a mistake in identifying yourself Dick, can you
-- I know you're going to blame it on the Calendar Committee. Can you respond to
the query?

####
 I don't need to remind you that the president, not the president
you just heard from, but the predecessor president added some days to the
calendar this year and this created difficulties for us.

####
 You can certainly expect us to deal with management problems in
the police department which, as you know having been here for years, have been
around for years. It is a police department that has had management difficulties
for as far back as you care to examine, I gather. We are working -- There is a
national association of college police departments that has a consulting arm and
we're working with them to come in and give us advice about the management
structure and personnel in the police department. So we will do that. I want to
reserve comment on the other issue, that of summary dismissal, until I can speak
about this specific aspects of this case and Susan Ehringhaus has assured me that
we have a compelling interest in allowing me to do that and so when the appeals
process is over I will do that.

####
 Yes, I'm hearing your observations about gender and hiring for
the first time. That had not been brought to my attention. But to answer your
first question, at the president's request, we have reviewed all of our
procedures in admissions and hiring and we are confident that we are in
conformity with the Bakke ruling of the Supreme Court which is the ruling that
controls our actions now. There are lower court rulings that are inconsistent
with Bakke and, as the President observed, it seems like the zeitgeist is moving
in the direction of the lower court rulings and away from Bakke but until the
Supreme Court decides that we are under the Bakke ruling then we will act under
the Bakke ruling. I think that the proponents of affirmative action have failed
to make their case as eloquently or as persuasively as I think they could have. I
mean I think that if we were not permitted to act under Bakke but if we were
forbidden from using race as a consideration whatsoever, if we had to be total
race-blind admissions, what you would find is there re-segregation of UNC and
that would be educationally unhealthy. We have an interest -- You only have to
look around the world at how it's changing to see that we have a major interest
in having a racially ethnically diverse population of undergraduates so that
people will be able to be educated in a world that looks more like the world that
we're going to send them out into for their professional lives. We want to make
sure that people understand that it's not as if the applicant pool of minority
students, primarily African-American students, is much different from the
applicant pool of white students. There are small statistical differences in the
traditional measures, GPA and SAT. But because of the competitiveness of this
campus -- I'd really need charts and graphs to show you this but I think you can
get the picture -- you're looking at roughly bell-shaped curves but greatly
exaggerated so not the traditional bell distribution. If you look at a bell
distribution of African-American students versus white students they're just
slightly off. So most of ourÉ all of our applicants are qualified but if you did
not use race as a consideration at all and you just drew a line, you'd knock out
a very large number of the African-American students and, as I say, it would
re-segregate this campus. That's not healthy. It is on purely educational
grounds, it is not healthy. There are additional considerations as well and one
of them is that the performance of many African-American students on SAT exams
reflects the historical residue of discrimination in school systems where
predominantly minority school systems were not as well funded as predominantly
white school systems. And so you're still looking at the residual effects, I
would argue, of historical patterns of discrimination which still need to be
remedied. And I would argue further that a public university has a public purpose
which is, as it did in my case, to take somebody from relatively impoverished
circumstances and give them an avenue of transverse into a better life a life
better than their parents were able to enjoy. That is a public purpose of the
university and so in order to achieve that, I think, if we ended up
re-segregating UNC we would lose our capacity to achieve that public purpose and
hence would lose the confidence of the significant part of the public. These
matters are intricate but they're not being debated in the consideration of all
of the issues that seem, to me, to be brought to bear and I fear the courts are
going to take very narrow perspectives as they address these issues and that
would be unhealthy I think.

Thank you very much. (applause)

####
 Thank you for coming to order. First let me welcome you back for
the beginning of the semester. I see several faces here that I saw at December
commencement. I want to thank you for coming. I can't tell you what a thrill it
is when you have processed in and you're standing there on the podium and then
you look over and see the wave of faculty starting in with their academic regalia
and all the multi-colored hoods, it lifts my spirits and I know that you don't
have to be there. So for those of you who regularly show up, thanks for much for
doing that. For those of you who occasionally show up, thank you and please show
up regularly. And for those of you who never show up, you might consider it. It's
actually fun. It gives you a sense of watching --  watching the graduates gives
you a sense of what it's all about. Why we're here. I'm going to spend all of my
time today before the Q&A period rolling out, as they say, the new freshmen
seminar program which you've all heard of because it is a direct result of the
Intellectual Climate Task Force project and let me again thank Pamela and her
committee for the hard work that went into that task force. Now this is one of 80
recommendations that was made and it's not exactly like it was proposed. It was
proposed to be an experimental program based in the residence halls. Dean Palm,
when she came on board and I'm going to ask her to give the details of the
program today, thought that it was such a good idea that she proposed that it be
available for all freshmen and that would take roughly 160 seminars and require
obviously the recruitment of new faculty because with a small seminar program,
your changing the student/faculty ratio in the departments and so we recognize
the necessity for recruiting new faculty in order to enable the program. I had
decided, once I read the Intellectual Climate Task Force Report, that a good use
of the flexible funds that were given to the Chancellor by the legislature two
years ago would be for the implementation of the Intellectual Climate Task Force
Report and so I have committed out of the Chancellor's Discretionary Funds which
came from the Academic Enhancement Funds that I proposed or challenged the
legislature to produce to match the tuition revenue increase that we got when we
raised tuition $400 per student. I decided to commit those funds or a significant
part of those funds to the implementation of the freshmen seminars program. That
largely has been my role, that and cheerleading on the side, as the Provost and
the Dean have worked out the details of this program to date. So what I'd like to
do is to call on Dick and Risa. Dick first, if you would, to explain the program,
say where we are now with the planning of it and then we will all take questions
and answers on it.

####
 Carl, one of the areas where we expect to see some results is in
freshmen retention. We know, from studies that have been done elsewhere, that
those freshmen who tend to stay to the sophomore year are distinguished from
those who drop out by the fact that those who drop out typically have not
developed a one on one relationship with a faculty member. And yet, whereas those
students who do develop a one on one relationship with a faculty member in the
freshmen year tend to stay in much higher rates than those who don't. And so this
guarantees that every one of our freshmen will be known, as Risa says, by a
faculty member. We expect that that will show up in freshmen retention data. Now
I hesitate to proclaim a lot of probable success for that because our freshmen
retention is already so strong that we don't have much room for improvement. And
as you get up to the levels of retention that we have achieved, then each
incremental increase is that much harder to garner. So I don't want to proclaim
that we're going to show strong results but we do expect some results.

####
 Great. Thank you for the compliment and for holding our feet to
the fire on the other 79 recommendations. (laughter) I can assure you that the
Provost has been charged with implementing these recommendations. When he's not
dodging female grackles (laughter), he's hard at work on the other 79. And I
should say that Sue Kitchen has already begun implementing a large number of the
recommendations that pertain to the student affairs area. So we will come back to
you at some point with an interim report on where we are with respect to all of
the recommendations.

####
 I'm in the minority. I think they should be required but that's
really an issue for the faculty.

####
 It's a good questions and obviously the people that you have in
mind should be candidates for teaching these courses if they want to develop a
freshmen seminar. Of course, what we wanted to do and we were very sensitive to
was not create the appearance that these were going to be like the programs back
when we were casting about finding anybody who for extra pay would teach a
freshmen seminar; something that was sort of marginalized. We wanted to make it a
central part of the core intellectual experience, both of faculty and students. 
That was the reason for focusing on tenure track faculty. But you're absolutely
right.

####
 You're absolutely right.

####
 Most of the undergraduate teaching and the vast majority of the
freshmen teaching is centered in the college but it is not entirely right and
you're absolutely right, we need be sensitive to what isn't there, that we don't
mis-describe our intent.

####
 I didn't mean to forestall questions on other topics. Yes, Dick.

####
 Probably won't have the same valence. They may serve different
weighted purposes in the two semesters. I suspect that the pedagogical, purely
pedagogical purpose will be better served in the second semester, the sort of
life skills advising aspect of it that Dick pointed to is probably going to be
better served in the first 3 or 4 meetings of class.

####
 Probably should.