Mr. Smith goes to Chapel Hill: A leader in the UNC System's new power structure, eastern N. C. investor Harry Smith savors efficiency.

• Author: Pomeranz, Jim

Back in 2012, Greenville filter-company executive Harry Smith got a call from the state's most powerful lawmaker asking about his interest in serving on one of the state's most prominent boards. "When I was called by Phil Berger at first about the [University of North Carolina] Board of Governors, I didn't even know what the Board of Governors was," Smith says. "'Who?' I asked. 'You know, they manage the University of North Carolina System,' I was told. I said, 'No, I'm not interested in that.' But after several subsequent phone calls, I signed up."

Six years later, the former chief executive officer of that publicly traded filter company is poised to become chairman of the UNC board, which oversees 17 campuses that enroll nearly 230,000 students and spend about $8 billion annually. It also hires and oversees the system president, often called the state's most important job. Smith's ascension--he was elected vice chairman in September--reflects a changing of the guard in North Carolina leadership wrought by the Republican takeover of the General Assembly in 2011. For decades, the Board of Governors was made up of prominent state lawyers and businesspeople, mostly Democrats and many of whom had served on local campuses and given lots of money to universities. Past chairmen included establishment pillars such as Greensboro lawyer Jim Phillips; Brad Wilson, the recently retired chairman of Durham-based Blue Cross and Blue Shield of North Carolina; and the late Cliff Cameron, former chief executive officer of Charlotte-based First Union Corp. Deference to powerful system presidents, including Bill Friday, C.D. Spangler Jr., and Erskine Bowles, was routine.

Berger has chosen a different path by working through hard-driving conservatives such as Smith, 47, with few previous connections to UNC's power structure. "Harry knows how to run a business, has a keen interest in public education, and we are lucky to have someone of his caliber serving on the Board of Governors," Berger says in an email. "If I were to meet another Harry Smith today, I would do my best to get that person involved in public service and put his talents and background to good use for the state of North Carolina." Smith agrees that he represents a new leadership style in Chapel Hill. "I'm not a typical Board of Governors member. I don't care about the wine-and-cheese approach. I'm a change agent."

Of course Berger didn't pick Smith's name out of a hat. From 2006-17, Smith contributed more than $180,000 to North Carolina politicians and campaigns, almost exclusively Republicans, according to federal election data. That includes a $50,000 gift to the N.C. Republican Party and $4,000 to Berger's campaign committee, both in 2012. Overall, Smith has given more to state Republican causes than 24 of the 28 current UNC board members. Berger's spokeswoman, Shelly Carver, says the donations played no role in Smith's appointment in 2013 or reappointment last year.

"I was contributing to what I consider good, conservative Republican campaigns," says Smith during an interview at his office overlooking the Pamlico River in Washington, where his former company, Flanders Corp., was headquartered. "I'm no puppet. I'm going to do what's right for the system with a focus on efficiency and affordability."

For Smith, his mandate is to cut wasteful spending and find savings to enable lower tuition costs--notwithstanding studies showing North Carolina's public universities are among the nation's low-cost leaders. He emphasizes his desire for each campus to retain its identity. But financial efficiency, it turns out, has been his personal passion since at least his senior year in high school.

Smith grew up in Johnston County's Archer Lodge, near Clayton, the son of parents who didn't attend college. As a high-school junior, he was on a vocational education...