Getting into the Nitty-Gritty of Governance Reform

July 10, 2014 at 8:52 pm 6 comments

Some of what happened at Thursday’s meeting of the Penn State trustees’  governance and long-range planning committee—which began to get into the nitty-gritty of additional reforms—was predictable:

Veteran members of the board spoke in favor of keeping it the same size; newer members, elected by the alumni in the wake of the Sandusky scandal, insisted that a smaller board would be “more nimble” and “more engaged.” Agricultural trustees didn’t think cutting back the number of ag trustees was a good idea. Students said they need a permanent seat on the board, with the trustee being chosen by the students themselves, not the governor or the board itself.

But for the first time in public, the trustees went beyond the basics. Representatives from the Alumni Association, the faculty, and the students made their cases for permanent seats on the board. And among the issues the trustees considered Thursday were these:

How do the trustees define whether board members are “engaged”? Would having a faculty member—a university employee—on the board present an insurmountable conflict of interest? And how many board members should be alumni—not just trustees elected by the alumni, but alumni?

Additionally, Eric Barron, who is attending his first board meeting after taking over as Penn State’s president on May 12, weighed in.

He was careful to say that he wasn’t making recommendations and didn’t want to choose who his boss would be (the Board of Trustees is responsible for selecting the president). Barron said only that he wanted to let the committee know of his experience, and that he was familiar, as Florida State’s president, with having student and faculty representation on the board. He repeatedly used the word “voice” to describe what those trustees provided.

“If I got nervous about anything in this conversation, it wasn’t the notion of numbers and placement,” he said in the meeting. “It’s the notion of representing someone. My view is that this has to be a group of people that are here for one purpose: to ensure the success of the institution, not representation.”

As he spoke, governance consultant Holly Gregory and her assistant, Paige Montgomery, nodded their heads vigorously. Gregory had opened the discussion by saying, “Reaching agreement on these issues is difficult because it’s not quite as clear [as other reforms the board has already enacted]. There are issues of both power and trust. The trust among members of this board is already under some degree of tension. We’ve spent a lot of time talking about it. I know some are frustrated that we haven’t moved faster.”

Barron elaborated on his experience with student and faculty trustees, saying that in addition to the voice they provide, he found that the chance for additional back-and-forth about the issues was important. “Lo and behold,” he said, “a student will vote for a tuition increase because they participated in an in-depth discussion about the budget and understand what the university is up against, and they don’t want to give up quality any more than anyone else. A faculty member will vote on benefit changes because they realize that between health insurance and benefits, it’s going up at a clip of $25 million a year and that’s unsustainable. So the voice is not just that, but an opportunity to give input and have it go in reverse.”

As usual, there’s no easy way to sum up what happened during the meeting, which lasted for 90 minutes and moved briskly. Even at that pace, the committee didn’t discuss all of the reform items it had previously discussed in small groups that were closed to the public in May. Here are some highlights from today’s meeting:

Alumni trustees: Alumni Association president Kay Salvino ’69, in making the case for an Alumni Association seat on the board, highlighted the association’s “mission of service” to its 174,379 members and 631,000 living alumni. “We have responsibility for serving the largest constituency of the university—substantially larger than students, faculty, and staff combined, and growing larger every year.” She noted, as well, that Alumni Council, the association’s governing board, includes alumni society presidents from each college and campus.

[In the interest of full disclosure: The Penn Stater magazine and this website are both published by the Alumni Association.]

In addition, Salvino said, the Alumni Association is “one of the largest cumulative donors” to Penn State with more than $15 million in gifts for scholarships, fellowships, programs, and facilities since 1988. And in the just-concluded capital campaign, Alumni Association members donated nearly $800 million, meaning “90 cents on the dollar of all alumni giving came from members of the Alumni Association.”

She finished by showing the scope of the Alumni Association’s programs, which involve students, showcase the university’s academic prowess, and communicate with alums: “We touch and serve Penn State and our alumni in a way that no other organization can do, and we do it every day, in countless ways.”

Trustee emeritus David Jones ’54, for one, was skeptical. He said he had “great respect and admiration” for the Alumni Association, but pointed out that alumni already elect nine trustees and noted that “historically, in recent years, at least two-thirds of our trustees have been alumni.” He called that proportion of trustees who are alumni “really full, if not too full.”

He added: “I sometimes think we would benefit by having more outside voices on the board.”

Alumni trustees Anthony Lubrano ’82 and Barbara Doran ’75 spoke up for the current system of elected alumni trustees; Doran called the alumni election “one of the most robust, transparent processes you can run.”

Business and industry trustee Richard Dandrea ’77 floated the idea of reducing the number of alumni-elected trustees, saying that election turnout is low and that so many of the other trustees are alumni that perhaps alumni are overrepresented on the board. Lubrano disagreed repeatedly, saying “no one” is more invested in the success of the university than alumni, but board chair Keith Masser ’73, an ag trustee, agreed with Dandrea, saying that the business and industry trustees may be misnamed. He said he isn’t aware that a non-alum has ever been named a business and industry trustee.

Faculty: John Nichols, professor emeritus of communications and chair of the Faculty Senate’s special committee on university governance, which issued this report in 2013, made the case for a faculty representative on the board. He stressed two things: first, that his committee’s report had been unanimously approved by the Faculty Senate, which is a particularly rare feat; and second, that he was proposing not a faculty trustee, but an “internal academic trustee.” The distinction, he said, is “very important.”

A “highly specialized institution like a university,” Nichols said, needs trustees who have a “deep understanding” of its mission. Penn State’s board has two members with a background in higher education: elected alumni trustee Alice Pope ’79, ’83g, ’86g, a psychology professor at St. John’s University, and Bill Oldsey ’76, who has worked in academic publishing.

Additionally, he said, a university is “essentially a professional association, and professional institutions are best governed with considerable governance by the internal professionals that deliver the goods. … Not to have that happen is a serious disconnection between the core mission of the university and the governance of the university.”

Jones said he had reservations about having employees on the board; ag trustee Betsy Huber noted that Pennsylvania law prohibits schoolteachers from serving on the school board in their own districts for just that reason. But Dandrea (who was chairing the meeting in Keith Eckel’s absence) said having one faculty trustee out of 30 meant that any conflict of image could be managed.

Students: University Park Undergraduate Association president Anand Ganjam and vice president Emily MacDonald spoke on behalf of students, and they made largely the point that their predecessors have made in previous meetings: that students don’t want to rely on the whim of the governor to have representation on the board and should have a representative who is chosen by students themselves. (For years, the governor has used one of his appointments to include a student on the board, but there’s nothing saying he has to.) They also detailed the procedure by which they assure student input.

Lubrano said he was in favor of the governor continuing to appoint a student trustee, but Masser said Gov. Tom Corbett had agreed to give up one of his appointments and allow the board to choose a student.

The tension surrounding reform was evident earlier in the day at the outreach committee meeting, when alumni trustee Ted Brown ’68 questioned Mike DiRaimo, the university’s governmental affairs representative, about a letter DiRaimo had written to the Senate’s state government committee asking that a bill sponsored by state Sen. John Yudichak, which would cut the board to 23 members, be tabled. Brown said he was upset that the letter indicated that the Board of Trustees did not support the bill because that is not, in fact, the case.

DiRaimo explained that he objected to the committee taking action on the bill for two reasons: because the bill would apply only to Penn State, and the university had been assured that would not be the case, and that the bill stipulates that only the General Assembly can make changes in the board’s size and composition in the future. He said, “That I know to be against the interest, against the position, against the actions of the trustees.” (The Senate committee did vote, unanimously, to approve the bill, which still needs to be considered by the full Senate.)

Brown wasn’t satisfied: “You said the Board of Trustees is opposed to this bill. I don’t remember any discussion to that, ever.”

New alumni trustee Robert Jubelirer ’59, ’62g chimed in, suggesting that DiRaimo could have phrased his objections better—and more accurately. He said that Yudichak ’93, ’04g and co-sponsor Jake Corman ’93 had previously agreed to hold the bill through May 2014 to see what progress the board made itself on reform and that the bill had been amended so to extend the time period to two years to allow the board to pursue reform itself.

“I think that’s significant,” Jubelirer said. “There’s plenty of time if this board is intent on reforming.”

He added that not only did the full board not discuss or vote on its position on the bill, but that he would not have opposed it had the board done so. Therefore, he said, the letter to the legislature was inaccurate. DiRaimo did not respond.

Here’s what comes next in the process:

Dandrea said that any committee members interested in working on a formal proposal to vote on at the next committee meeting would work with university attorney Frank Guadagnino ’78, who will “labor over” the draft.  The committee will schedule an additional meeting within the next month to vote on recommendations to bring to the board. The idea is to have the board in position to vote on a proposal at its next meeting, Sept. 19 at University Park.

Lori Shontz, senior editor

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Entry filed under: Alumni Association, Board of Trustees.

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6 Comments Add your own

  • 1. Bill Levinson B.S. '78  |  July 10, 2014 at 10:29 pm

    The DiRaimo is prima facie evidence that Penn State’s governance is totally out of control. I personally made sure that Senator Yudichak found out that DiRaimo sent him, and the Senate, false and unauthorized information.

  • 2. wlevinson  |  July 10, 2014 at 10:34 pm

    http://www.timesleader.com/news/otheropinion/1501325/COMMENTARY:-WILLIAM-A.-LEVINSON-Penn-State-needs-SB-1240

    William A. Levinson: Penn State University needs to rein in and restructure its board of trustees

    “This June, the special assistant to the university president sent a letter to the Pennsylvania Senate to say that the Board of Trustees opposes SB 1240. The board never voted to take any position on SB 1240, which apparently means the communication was both false and unauthorized. The employee in question probably did not send this letter on his own initiative. He presumably had to have been directed to do so by either (1) President Eric Barron, acting on false information from one or more trustees, or (2) trustees who violated President Barron’s authority and chain of command, as well as the board’s standing order against unauthorized individual action on Penn State’s behalf.”

    I do not believe for one moment that Mr. DiRaimo would have dared send a letter of this nature on his own initiative, without direction from President Barron or else one or more Trustees.

  • 3. Steve Fotos  |  July 11, 2014 at 9:11 am

    How does DiRaimo get away without answering the question? Did he act without authority or did someone on the Board “authorize” his response? In the first instance he should be fired. In the second, the governance structure is clearly broken. Which is it?

  • 4. Alan Haberbusch  |  July 11, 2014 at 10:41 am

    On Fofos’ question my answer is probably BOTH

  • 5. Susan Gifford, '80 MBA  |  July 11, 2014 at 5:31 pm

    Boy, it never ends, does it. I’m going to call my state senator Monday and urge him to support this bill. This board has had plenty of time to review Jack Wagner’s report and recommendations, yet… no action when it would hurt “the power structure’s” vested interests.

    Second, some of the Trustees want to REDUCE the alumni elected trustees (because in their opinion not enough alums vote) and they themselves appoint the student representative!!!!! Yet the Ag Society wants their numbers to remain the same and you must note the silence about changing the number and manner of “election” of the Business and Industry Trustees.

    All concerned alums must call their senators ASAP and urge passage of this bill. Hiring consultants and lengthy discussions are clearly a diversion to fool the PA legislature and concerned stakeholders. It is clear the Ag and Business and Industry trustees care only for themselves, not the University and proper governance.

  • 6. J Bartnik  |  July 11, 2014 at 6:03 pm

    I called the Senator’s office and said basically the same comments as those posted. President Barron should also explain this letter since it came on his letterhead by his staff member.

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