More on Governance Reform at Penn State

September 20, 2013 at 9:09 am 4 comments

EckelIt appears, more and more, that change in the structure of the Board of Trustees will not end with the removal of the university president and governor as voting members and the other reforms enacted in May. The governance and long-range planning committee, which recommended the May changes, plans to hire a governance consultant by the board’s November meeting. This consultant would help the governance committee to determine what further changes should be referred to the entire board.

This process is moving quickly. Keith Eckel (pictured here) suggested that a consultant was needed in July—his first meeting as chair of the committee–just two months ago.

At Thursday afternoon’s committee meeting, Eckel reported that he, board chair Keith Masser ’73, and Barbara Doran ’75—a subcommittee, I’d note, that incorporates both a veteran and a new member of the board—had reviewed about a dozen possibilities and narrowed the field to four or five people. Doran said they had solicited recommendations for the position “as broadly and widely as we could.”

The idea that Penn State needs to hire another consultant to discuss governance after already receiving reports on the subject from Louis Freeh, former auditor general Jack Wagner, and Penn State’s Faculty Senate has sparked anger and some ridicule among critics of the board. But Eckel said the trustees are not looking for another informational report.

“We want a top expert in the field, but we also want a facilitator, because obviously a number of these issues don’t have unanimous agreement,” he said.

Eckel, Masser, and Doran want to get some additional information on the remaining candidates, they said, and are planning to bring the full committee together again to interview the candidates as soon as possible. Their goal is to have made a hire by the board’s November meeting. Eckel called the timetable “aggressive,” but no one at the meeting objected to it.

Eckel, who talks and explains more in committee than his predecessor, Jim Broadhurst ’65, did, also gave what seems to be his mission statement going forward:

“We can’t emphasize enough, the improvement of our governance is a work in progress,” he said. “There are a number of areas that need to be looked at, need to be reconciled.

“If you’re going to be world-class, each year you ought to have the entire board review the operations of the board and make suggestions for changes as well as committee operations. And, in fact, if we became very aggressive in that area, we might reach a point where the board agreed on an evaluation process of each other by every member of the board in order to create a more efficient process and higher-performing board members. That’s an aggressive step.

“I’m only listing these things to indicate it will be a work in process that I don’t believe is ever completed. But our goal is to have the best governance for this university.”

Other notes from Thursday’s governance committee meeting:

—More information on the formation of a separate compensation committee, including bylaws changes, was given by Susan Basso, vice president for human resources, and Frank Guadagnino ’78, an outside attorney from Reed Smith hired by Penn State for his expertise on governance issues. This committee would help to determine salaries for several tiers of university officials, ranging from the president (its primary purpose) down through top vice presidents, the athletic director, and even some highly paid coaches.

The discussion expanded into Penn State’s structure, in which Basso reports to David Gray, senior vice president for business and finance. Doran asked how this lines up with recommendations in the Freeh report and best practices at other universities.

Making human resources a separate department reporting directly to the president is a Freeh report recommendation that Penn State has decided to not follow, partly because this would give the president of the university another direct report in a time when he has many obligations, and partly because that’s not how most other universities do it. (Sen. George Mitchell, who is assessing Penn State’s compliance with the Freeh report as part of the NCAA-mandated Athletics Integrity Agreement, has signed off on Penn State’s decision.) Guadagnino also said only one or two other universities have the structure outlined in the Freeh report.

Doran said she found the Big Ten’s practices, which are consistent with Penn State’s interesting, saying, “It seems that modern governance is evolving away from” having HR and finance in one department.

Marianne Ellis Alexander ’62 voiced a sentiment that I’ve heard often around campus, but not at trustees meetings: “Freeh was using a corporate standard to apply to higher education. We are going with the best practices of higher education, and there’s definitely a different model. We chose to go with the higher ed model.”

—The committee also engaged in an interesting discussion about how trustees should conduct themselves in public forums, particularly if they disagree with the position the board or university has taken as a whole. Anthony Lubrano ’82, of course, was the focal point of the discussion, which was nuanced and thought-provoking. I’ll delve into that in a later post.

Lori Shontz, senior editor

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Entry filed under: Board of Trustees. Tags: , , , , , , , .

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4 Comments Add your own

  • […] More, please: Penn State plans to ask for a 5.1 percent boost in state funding, per Thursday’s meeting of the Board of Trustees. Even if the “ambitious” request is approved, tuition will increase by an average 2.85 percent. Additionally, Athletic Director Dave Joyner said the athletic department may borrow $30 million to offset the dip in Beaver Stadium attendance. For more on Thursday’s meeting, check out Senior Editor Lori Shontz’s post here. […]

  • 2. sjfotos  |  September 20, 2013 at 11:22 am

    If the BOT intends to remove any Alumni elected member, they should retain counsel now. Any removal of an Alumni elected member would be a clear abrogation of our right to representatives of our choosing.

  • 3. sjfotos  |  September 20, 2013 at 11:25 am

    It is no surprise that the Board would seek to hire yet another consultant. It is not their money. One wonders how eagerly this group would have been contracting for services in their own businesses.

  • […] a Reed Smith attorney assisting Penn State on governance issues, to clarify the details of the compensation committee discussed Thursday in the governance committee […]

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