This report by the Special Committee on Governance, Academic Free­dom, and Institutional Racism in the University of North Carolina (UNC) system considers the influence of the gerrymandered North Carolina state legislature on the systemwide board of governors and campus boards of trustees and how political pressure has obstructed meaningful faculty participation in the governance of the UNC system. It also assesses how the environment for academic freedom in the UNC system has been weakened by the politiciza­tion and increased centralization of system governance and by mounting political interference in university policy. Finally, the report focuses on key issues of institutional racism within UNC: the racial climate, institutional inequities, and retention of faculty of color. It demonstrates how the areas of governance, institutional racism, and academic freedom overlap significantly. The report concludes that UNC needs strong and independent leadership that respects faculty expertise, that observes widely accepted principles of academic governance, that protects academic inquiry from political pressures and constraints, and that is will­ing to do more than simply pay lip service to the idea of equity. [The text of this report was written in the first instance by the members of the special committee.]