Posts tagged ‘Keith Eckel’

Trustees Vote Against Examining the Freeh Report

In a contentious 90-minute special meeting Tuesday, the Board of Trustees voted down a proposal to formally examine the findings of the Freeh Report, voting instead to maintain its current stance of waiting until legal proceedings related to the Sandusky scandal run their course.

Alumni trustee Al Lord ’67 presented the initial resolution, which proposed the creation of an ad hoc committee to “examine the Freeh Report, meet with Freeh and his investigative team, review the full set of undisclosed communications and report its findings to the full board.” That resolution was defeated by a 17-9 vote, with Lord and the other eight alumni-elected trustees the only “yes” votes. A second resolution, presented by gubernatorial appointee and board vice chair Kathleen Casey ’88, proposed that the board “continue to actively monitor the discovery and factual investigations … and, upon conclusion of such proceedings, shall determine whether any action is appropriate and in the best interest of Penn State.” That resolution passed 17-8, with alumni trustee Adam Taliaferro ’05 abstaining.

It was Lord, during discussion of the second resolution, who asked Casey to clarify whether the action in her proposal (written in collaboration with Ken Frazier ’73) was simply to “continue.” When Casey said yes, Lord replied, “Continue to do what we’re doing? Resolutions should do something. This is ‘continue to do nothing.'” It was an exchange that got to the heart of the divide among the board’s members: The alumni trustees remain committed to repudiating the most damning findings of the Freeh Report, while the majority of board members argue that any such action is at best premature.

Lord introduced the amended resolution, first proposed in July, by acknowledging other issues that demand the board’s attention. “I wish that instead of talking about being pleased with only increasing tuition two or three percent, we were talking about decreasing tuition,” he said. “But what needs immediate attention is the Freeh Report… My feeling is that the consequences of the Freeh Report and the NCAA consent decree live on.” He cited comments and signs encountered by Penn State fans at the Rutgers football game last month as proof that the damage to the university’s reputation remains unchecked. “When I saw those signs, it occurred to me how far we’ve fallen, or how other people think we’ve fallen, because we don’t stand up for ourselves. I’m bothered by how meekly we react. Generally speaking, we don’t react at all … there’s a sense of ‘Suck it up, we deserve it.’ We don’t deserve it.”

The four-person ad hoc committee proposed in Lord’s resolution would have included Lord, fellow alumni trustee Anthony Lubrano ’82, and two members appointed by board chair Keith Masser ’73. The alumni trustees were unanimous in their support: Ted Brown ’68 argued that any trustee who said they’d be willing to defend the university’s reputation in a one-on-one conversation was obligated to support the proposal, while Bob Jubelirer ’59, ’62g disputed the need to wait on the legal outcomes: “There is no downside, none at all, if we review the Freeh Report.”

Counterarguments came from Keith Eckel, an elected agricultural trustee, who cited strong applicant numbers and an upgraded credit rating as signs of the university’s health, and argued that the board’s responsibility was to “our students and our constituents. I urge the defeat of this resolution and the moving forward of the university, and the continued observation of the results of the trials that are ongoing, and because of which we cannot make any decision today.” That response brought an isolated “boo” from someone in the audience of roughly 100 people, many of whom applauded points made by the various alumni trustees. An otherwise tame exchange between the business and industry-elected trustee Rick Dandrea ’77 (an attorney who argued the wait-and-see approach on the ongoing court cases) and alumni trustee Ryan McCombie ’70 led to a more strident response from the crowd; two audience members were escorted out of the meeting after loud outbursts, prompting Masser to slam his gavel at the podium, while Lord turned toward the crowd and made a “time out” signal to try to quiet things down.

When order was restored, McCombie finished his point: “We accepted a scarlet letter that said we are a ‘football culture,’ when everyone knows we aren’t a football culture. I refuse to accept that letter; I don’t think the university should, either.”

After a bit more back and forth between the two sides—and the removal of one more audience member after an extended outburst—the trustees voted, with the the “nays” carrying the day. That was followed by the introduction of Casey’s resolution, a brief back-and-forth about when the board members had initially received it (the proposal was sent out electronically last Friday), and objections from Lord, Lubrano, and Bill Oldsey ’76 about the proposal’s wording. Taking issue with the final paragraph of Casey’s proposal, Oldsey noted, “It says ‘consistent with fiduciary duty’ … and then it says we’re going to wait and see. Unless I missed the last two hours, there is a lot of disagreement on the board about our fiduciary duty.”

That disagreement doesn’t figure to change anytime soon. A quick vote to table the proposal until a later date was shot down along the expected lines—the nine alumni trustees once again voted together—before the actual vote on the Casey/Frazier “wait and see” resolution. It passed.

Ryan Jones, senior editor

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October 28, 2014 at 3:35 pm 4 comments

Clemens Resigns from BOT; Alumni Election Change Passes

For the second day in a row, I find myself wrapping up the Board of Trustees meeting by starting at the end.

Just as board chair Keith Masser ’73 was preparing to adjourn the Friday’s meeting, Al Clemens ’59 jumped in to read a statement. He got right to the point, announcing that he was resigning from the board.

Clemens, a gubernatorial appointee, joined the board in 1995 and was the only one of the four trustees remaining as plaintiffs in the Paterno family’s lawsuit against the NCAA who was on the board when the Sandusky scandal broke. As a result, he is the only one of the trustees who was found to have standing to sue on the claim of defamation.

He said the board didn’t have much information or time to discuss the issues when it voted quickly on Nov. 9, 2011, to fire Joe Paterno: “I will always regret that my name is attached to that rush to injustice.”

He indicated, as well, that hiring Louis Freeh and accepting his conclusions “without review” was another mistake and that he joined the Paterno family’s lawsuit in an attempt to “reverse the misguided sanctions that were designed to punish a football program without blemish.”

He also said his resignation was in keeping with his belief in term limits; the current limit is 12 years, but members including Clemens were grandfathered in when that change was made. He has served for 19 years.

Clemens’ term on the board actually expired in 2012, according to the trustees’ website; staff from the trustees office said that there’s often a long lag between when a governor-appointed trustee’s term expires and when the governor nominates a replacement. Gov. Tom Corbett announced in late February that he was nominating Cliff Benson ’71 and Todd Rucci ’92 to fill the seats of Clemens and Ira Lubert ’73. Those nominations must still be confirmed by the state senate.

Lubert’s term technically ended in 2013, as did the term of vice chair Paul Silvis ’06g, for whom a replacement has not been announced. The terms of two other governor appointees, student Peter Khoury and Mark Dambly ’80, expire in 2014.

Also noteworthy from the meeting:

Alumni election changes pass: All alumni who have email addresses on file with the university will receive ballots in the upcoming alumni trustee election. Trustees unanimously passed a motion to change the procedure in the university’s charter; previously, only alumni who are Alumni Association members or have donated to the university in the past two years automatically received ballots, although any alum could request one.

After the issue was debated and unanimously passed in the January governance committee meeting, Penn State sent postcards to 186,610 alumni without email addresses on file, governance chair Keith Eckel said Thursday during the committee meeting. The cost: $82,000.

Eckel said Thursday that only 400 of the cards had been returned and noted that while he thought reaching out to alumni was the right thing to do, the “somewhat disappointing” rate of return meant that the gesture likely doesn’t need to be repeated. At Friday’s meeting, he said he’d been told that the number of returned postcards had increased to 700.

The alumni election starts April 10, and alumni still have time to return the cards. All of these changes are taking place after the nomination process for alumni trustees, which ran from mid-January to late February. In the future, all alums with email addresses on file will receive both a nomination form and an election ballot.

Public comment: After several meetings in which the number of speakers during the public comment session shrunk, nine speakers were announced for Friday’s meeting, although only seven showed up to speak. Also in contrast to recent meetings, when speakers covered a variety of issues, most criticized how the board has handled to the Sandusky scandal.

Ceil Massella, an alumna and wife of football letterman Brian, told the board, “Just as I always think of the shooting when think of Kent State, this university will always be associated with Sandusky’s guilt unless the record is set straight.”

Evan Smith ’11 asked the board, “What are you personally doing with your position of power to help serve the Penn State family? How are you helping us fight this battle of public perception?”

Several speakers also reiterated their belief that the board owes an apology to the family of Joe Paterno.

Facts and figures: President Rod Erickson said applications for 2014-15 baccalaureate admission have increased by 9,000 over last year—19 percent at University Park and 8 percent at the commonwealth campuses. Out-of-state applications are up 26 percent, and international applications are up 18 percent. Minority applications he said, are running 16 percent of last year.

He also said that the quality of applicants is higher: Their average SAT score is 20 percent greater than last year’s.

Lori Shontz, senior editor

March 7, 2014 at 8:45 pm 2 comments

Trustees Struggle to Find Consensus on Board Reform

Perhaps in this case, the best place to start is the end.

Two hours into the Board of Trustees’ governance and long-range planning committee meeting Thursday afternoon in Hershey, chair Keith Eckel decided the group needed another session before its next scheduled meeting in May. The board’s governance consultant, Holly Gregory, agreed and pushed for a substantial chunk of time to find some consensus on what reforms to pursue—and to understand why those reforms are needed.

“We need to drill down,” Gregory said. “I’m still really, really challenged because I need to make sure we have a sense of what we are trying to move on. And it’s difficult to come up with ideas of what we’re going to do when we don’t know what we’re trying to achieve. That was my hope. I have some sense of that on the size (of the board) issue, but we haven’t had the time to go down as deep as I’d like.”

Then she added, “I’m supposed to help facilitate. Not come up with my own reform proposal. I can easily come up with one based on what I’ve heard, but that really isn’t the task as I understand that.”

The committee members and Penn State staff pulled out their calendars and started tossing out suggestions. None worked. (Perhaps a suggestion from the media seats—why not do a Doodle poll?—would have helped.) These are busy people, people with calendars full of other board meetings, vacations, grandchildren. The upcoming celebration of Penn State’s capital campaign took up a few days, as did the ag trustees election and the counting of alumni election votes. At one point, Anthony Lubrano ’82, one of the board’s most vocal critics, even after joining it, noted a week he was unavailable, prompting Jim Broadhurst ’64, an executive committee member and former board chair who has served since 1998, to quip, “Might be a good week to have it, then.”

Everyone laughed, even Lubrano, who said, “I gave you a softball, Jim—if you couldn’t hit that one …”

Consensus was almost impossible to find. They tentatively settled on May 7, the day before the officially scheduled governance committee meeting, and according to attorney Frank Guadagnino ’78, responding to a question from Jesse Arnelle ’55, ’62g, that meeting should be open to the public.

It’s no secret, of course, that Penn State’s board is divided and that proceeding on the next part of governance reform, which involves the size and composition of the board, plus qualifications for trustees, was going to be difficult. That’s why the governance committee said it hired Gregory, to help members find the right path.

The board’s stated intent is to vote on a reform package in the fall. But the trustees entered Thursday’s meeting, their first public discussion on reform with Gregory, having not yet determined which data they needed or which universities they wanted to use as benchmarks. After a lengthy back-and-forth, that was settled. (And if they want more data, they are welcome to check out a feature from our July/August 2012 issue in which we compared the size and composition of Penn State’s board to those of other Big Ten, land-grant, and Pennsylvania universities.)

Even a potential reform that has widespread support—the addition of a permanent student trustee, necessary because there’s no guarantee of student representation, only a tradition that a student is of the six trustees appointed by the governor—required a sustained, sometimes contentious, discussion.

The issue has some urgency because the current student trustee, Peter Khoury, is graduating in May, and the board realized that unless it acts, it could be without a student representative when tuition is set at its July meeting. Eckel said Gov. Tom Corbett has assured that he will select Khoury’s successor in plenty of time to have the selection ratified by the state senate, but the committee wanted a back-up plan in case that doesn’t work.

The plan: for the committee to vote on the permanent student trustee reform immediately, but bring the item to the full board for the necessary approval only if the process in place now hasn’t moved forward by the next meeting. There’s a chance that the full board will not vote on this in May. But this action separated the student trustee from the rest of the reform package, which does not yet exist.

The student trustee position involves three changes: The size of the board would increase from 32 members to 33 (both numbers include non-voting trustees) because the governor would still have six appointments. The board itself would select the student trustee, but the University Park Undergraduate Association, the Graduate Student Association, and the Council of Commonwealth Student Governments would recommend that student. And the student trustee term would be two years, not three, to make it less likely that students would have to choose a freshman.

Barbara Doran ’75 suggested that Khoury stay on, that he could still represent student interests as an extremely recent graduate. (His term doesn’t officially expire until November; he has agreed to resign to make way for a student-chosen trustee.) The committee’s student representative, Molly Droelle, the president of CCSG, said that is unacceptable to students: “That’s a very strong point for us.”

Vice president for administration Tom Poole told the committee that the governor makes his decision after student organizations recommend one or two candidates and the state secretary of education (also a trustee) interviews the candidates. Richard Dandrea ’77 noted that the board could decide to make the student trustee position permanent but officially designate that trustee as one of the governor’s appointees.

“Not in the eyes of the students,” Droelle said. “That’s not the proposal.”

“I know that’s in the eyes of the students,” Dandrea said. “I like your vigorous advocacy. I’ll write your recommendation for law school. But I’m just saying, that’s another alternative we should consider.”

That idea was discussed but never brought forth for official consideration.

Lubrano objected to the item because it was separated from other potential reforms and because while the issue of the student trustee has been discussed generally in committee, he hadn’t seen this official proposal until the meeting. He insisted on a roll call vote, and the proposal passed 8-1, with his dissent.

“It’s imprudent to move forward with one part without talking about the whole,” he said.

Dealing with that whole, however, is proving difficult. And the proverbial devil, it became clear as the meeting progressed, is not only in the details, but in the overall philosophies of board members.

Board reform became a hot topic after the Sandusky scandal, when the board was criticized for its actions, particularly not knowing that Jerry Sandusky was under investigation before he was charged, the decision to fire Joe Paterno and how it was carried out, and the handling of the Freeh report. Alumni trustee Marianne Ellis Alexander ’62, who was on the board in 2011 and is not running for re-election, addressed that issue head-on late in Thursday’s meeting.

She referenced a  report by the Association of Governing Boards of Universities and Colleges from the late 2000s that cited Penn State’s board as a model of good governance because of the diversity of constituencies represented on the board (alumni, agriculture, business, state officials) and the diversity of ways in which they are chosen (direct election, self-selection, appointees).

“I don’t want to lose sight of that,” she said. “And also, since eight years ago … there’s been a steady evolution toward board reform that means every member of this board is more included and feels more engaged. Really, it’s been a revolution.

“And I think what we are doing here today is on a continuum. I just don’t want us to lose sight of that. Just because we had a terrible thing happen, suddenly we have this terrible system. I don’t believe that.”

Doran, a private wealth manager at Morgan Stanley who was elected by the alumni post-scandal, answered by citing the nation’s financial crisis of 2008. “Most of the banks concerned were very well run, had risk management systems, everything looked good—and then fell apart when they failed the ultimate stress test. … A stress came (to Penn State), and it hurt us. Wall Street has been undergoing massive reform. I think that’s where we are now. We need to continue to look at how to improve.”

Alexander, one of two voting members of the board with a higher education background, responded, “I don’t like the idea of Penn State being compared to those financial institutions.”

Replied Doran, “It’s out there.”

The back-and-forth called back to how Gregory began her section of the meeting, which was billed on the agenda as “facilitated discussion of governance considerations with consultant.”

She said: “We need to ask, ‘Is change likely to have a positive result on board effectiveness?’ And also, perception matters here—you govern in public, and having the support of the community is critically important. … I think we have to deal with both issues.”

Those issues have many parts. I’m planning to flesh out some of them in future posts.

Lori Shontz, senior editor

March 7, 2014 at 11:56 am 1 comment

The BOT’s Governance Consultant Speaks

Holly Gregory wanted to clear up one thing right off the bat. The lawyer hired to facilitate the Board of Trustees’ discussion about the more difficult parts of governance reform—the size of the board, the constituencies represented on the board, the qualifications needed to serve on the board, etc.—opened the trustees’ retreat Thursday afternoon with, as she put it, a disclosure:

She’s not a Penn State graduate.

That was a soft opening, to be sure. But as Gregory continued, she laid out her philosophy of good governance and how she sees her consulting role. She explained the focus of her law practice—working with boards of directors and trustees, at both for-profit and nonprofit organizations, and said that includes other universities.

She acknowledged the progress Penn State has already made in governance reform, but she added, “There are a number of areas where observers have continued to call for change. We have to listen.”

When governance committee chair Keith Eckel announced the hiring of Gregory in November, he stressed that he was looking for not for an expert in the field, but a facilitator, someone who could guide the board—which is divided—in what he has called the ongoing and continuous work of determining how best to govern the university.

He reiterated that Thursday, when he introduced Gregory and opened the retreat:

“The right model for Penn State will be the Penn State model,” he said. “It is within every one of our hands, the ability to shape that. Holly is the expert, and I have great confidence in her ability. But perhaps her most important talent is one of facilitation.

“There may be differences among us, but I am convinced there is one thing that unites all of us, and that is that we want the best for Penn State. Our viewpoints may differ in what that definition is, but we want the best for Penn State. And this effort is to create and in many cases reaffirm processes we may already have as the best Penn State model.”

And Gregory immediately picked up one of Eckel’s main themes: “Governance is a work in progress,” she said. “It never really ends. You never really say you’re done. You continually need to think about how this board functions and operates and the rules it has in place to guide it.”

The first part of the retreat was open to the public; by my count, 12 people—including me, four other reporters, and two Penn State public information staffers—attended the session, which lasted for about 40 minutes. The trustees were in one room; we watched a video hookup from the room next door that showed whoever was addressing the trustees. The rest of the retreat took place in a closed executive session.

Among the points that Gregory made in the public portion of the retreat:

Fiduciary duty: As a lawyer, she sees fiduciary duty as the underpinning of everything a trustee does. “Not as an ending,” she said, “but as a starting point.”

Disagreements are OK: Tensions in “key relationships” at an institution that has undergone a crisis are not unusual. “In fact,” she said, “they are the norm.”  Gregory called herself “agnostic” on the Sandusky scandal and aftermath and stressed that “disagreement isn’t something to be afraid of. It’s something to be valued.”

Speaking with “one voice:” That said, she also stressed how important it is that the board speaks publicly with one voice. They key, she said, is to figure out a way to get the “benefits of vigorous debate”—meaning, in private—“without causing harm to the university.”

Three duties of trustees: She laid out three duties that should guide trustees: obedience, meaning that everything the trustees do should be tied directly to the university’s mission as described in the charter and bylaws; care, meaning to put in the time needed to fully understand issues and to do due diligence; and loyalty, meaning avoiding conflicts of interests—or identifying ones that can’t be avoided and protecting the university’s reputation. “After all,” Gregory said, “that’s one of a university’s primary assets.”

She continued: “The good news is that perfection is not required. These duties, they expect a very, very high standard from trustees. But the law recognizes that the board, acting in real time and in response to real emerging issues, will not always make the best decision. You’re going to get it wrong. You’re going to make mistakes sometimes. As long as you’re acting with reasonable and prudent care, you as trustees will not be held liable.”

A culture to strive for: Gregory characterized the culture the board should strive to meet with these phrases: Mindful of fiduciary duties. Future-focused: anticipatory, not reactive. Revitalizing, not entrenched. Diverse and inclusive.

She ended with this: “I can’t emphasize enough the value that comes from having the opportunity to debate a variety of viewpoints.”

Lori Shontz, senior editor

January 17, 2014 at 9:44 am 2 comments

BOT Election: Boosting Alumni Participation

At the November meeting of the Board of Trustees’ governance and long-range planning committee, the discussion centered around how to increase participation in the alumni trustee election. At the committee meeting today, the committee made clear it wants to broaden participation even further.

The committee wants to automatically send ballots to all alumni with email addresses on file with Penn State, and it further wants to send snail-mail postcards to alumni who have only a mailing address on file. Those postcards would explain how to obtain a ballot.

In previous elections, ballots have been sent automatically only to alumni who have been members of the Penn State Alumni Association within the previous two years and alumni who donated to the university within the previous two years. Other alumni needed to request ballots.

Unlike the changes made in November, this change requires a revision of the university charter, which must be voted on by the full board. That requires a 30-day notice, so a vote will be taken at the March trustees meeting. So while this policy will not be in effect for the nomination process, which has already started, if passed it will be in place for the election, which runs April 10 through May 8.

The committee voted enthusiastically to recommend the change to the full board for a vote.

While we’re at it, this is probably a good time to define who, exactly, is an alumnus or alumna of the university—a definition that will be tweaked in the proposed charter change. Obviously anyone who’s received a degree—associate’s, bachelor’s, master’s, or doctorate—counts. But according to the charter, so do “former students … who have satisfactorily passed one semester’s or two terms’ work, or more,” in any program that requires at least two years of study.

The proposed changes would clarify that those programs requiring at least two years of study must end in a degree—basically, that people completing one of Penn State’s certificate programs are not eligible to vote.

More news from the committee meetings:

Executive committee nominations: One of the governance committee’s roles is to recommend at-large members for the board’s executive committee, and the recommendations that will be put forth Friday—if  board chair Keith Masser ’73 is re-elected—are Kathleen Casey ’88, appointed by Gov. Tom Corbett in 2013; Donald Cotner ’71, an ag trustee since 2012; and Richard Dandrea ’77, appointed as a business and industry trustee in 2013.

Those names were put forth by Masser and governance chair Keith Eckel; Masser said he chose Casey because she is vice chair of the human resources subcommittee and the compensation committee, Cotner because he is vice chair of the finance and business committee, and Dandrea because he’s a lawyer and because Ken Frazier ’73 (who has a law background) has decided to step down from the executive committee. (The board chair, board vice chair, immediate past chair, and standing committee chairs are automatically part of the executive committee.)

Barbara Doran ’75 noted that Casey is a lawyer, filling that need, and that none of the nominees were elected by alumni. She nominated Ryan McCombie ’70, who was elected by alumni in 2012. Because there were four nominees for three positions, the committee voted: Casey, Cotner, and Dandrea each received a majority of the vote; the totals were not released.

If Masser is not re-elected as chair, Eckel said, he will confer with the new chair before the governance committee puts forth nominees for the executive committee.

First compensation committee meeting: The first in-person meeting, that is. The committee, which was created at the November board meeting, did meet via conference call Saturday morning to approve compensation for new football coach James Franklin, a process that committee chair Linda Brodsky Strumpf  ’69 said was “interesting.”

Strumpf had served on the predecessor to the compensation committee, an ad-hoc group that was convened when circumstances warranted it, but this was the first time that details of the contract were reported during the process. The speed was potentially problematic—the bylaws stipulate that the committee must give three days public notice before meeting, but they were able to use the provision that if all committee members agreed to waive the three-day requirement, 24 hours notice would suffice.

The committee also approves compensation for nine other university employees (see below for the list), but that process is usually far from the spotlight. “People are really interested only in the football coach’s salary,” Strumpf said. “That’s the world we live in, I suppose.”

Under operating guidelines approved by the committee Thursday morning, the committee has responsibilities for four tiers of university officials. (Click here for the draft; see page 5 for the complete list.) The president is alone in Tier I as the only compensation the full board must approve.

The compensation committee approves compensation for five officials in Tier II—executive vice president and provost, senior vice president of finance and business, senior vice president for health affairs, senior vice president for development and alumni relations, and vice president and general counsel—and four intercollegiate athletics employees who are designated Tier IIA. That’s the athletic director, football coach, and men’s and women’s basketball coaches. For Tier II employees, the full board is informed, but does not vote.

That’s standard practice, said Jason Adwin, vice president of Sibson Consulting, who is working with the committee. “Executives govern,” he says. “Administrators manage.” And managing, he says, includes deciding on compensation.

The committee also voted to recommend to the full board that it approve an executive compensation strategy (click here for the draft) developed in consultation with Sibson; Strumpf said the hope is to vote on the strategy at the March meeting.

Sibson plans to conduct a study that’s sponsored by Penn State and will survey 60 institutions, 30 of which will be peers of Penn State, to compare how the university’s salaries, bonuses and incentives, retirement, and deferred compensation compare.  The report is expected to be ready by May, which Strumpf said is good timing because the committee will begin reviewing salary increases in August or September.

The report will not be made public, for two reasons. First, the sensitivity of salary numbers; vice president of human resources Susan Basso says a public release would deter other institutions from participating. Second, Adwin said, because institutions pay for the data.

Trustees retreat: The typical committee meetings ran on a different schedule today (and the student life and outreach committees did not meet) because of a retreat with Holly Gregory, a lawyer and consultant hired by the governance committee to facilitate discussion of further governance reforms. The first 40 minutes of the session were open to the public before the board went into executive session; I’ll have a piece on Gregory’s introduction later.

Lori Shontz, senior editor

January 16, 2014 at 6:46 pm 3 comments

Governance Committee Debates Presidential Search

Trustee Keith Eckel (Penn Stater file photo)

Trustee Keith Eckel (Penn Stater file photo)

When the agenda for Board of Trustees’ governance and long-range planning meeting on Thursday moved to new business, Anthony Lubrano ’82 was ready with his issue. He’s already been on record criticizing the search process for Penn State’s new president, saying the Trustee Presidential Selection Council does not include enough trustees who represent alumni.

This time, Lubrano proposed having a discussion about the issue, possibly as a prelude toward changing the makeup of the selection council, which interviews finalists for the position. He said that the full board should be able to meet with the finalists before voting, rather than relying on the 13-member selection council to make a recommendation for the entire board.

Governance chair Keith Eckel, a member of the selection council, said he had no problems with the process, which is the same as has been used for previous Penn State presidential searches. (Refresher: The Presidential Search and Screen Committee, composed mostly of faculty, students, and alumni, did the initial work in conjunction with executive search firm Isaacson Miller and recommended finalists to the Trustee Presidential Selection Council, which then recommends a candidate to the full board.) Said Eckel: “The process works.”

Trustee Anthony Lubrano (Penn Stater file photo)

Trustee Anthony Lubrano (Penn Stater file photo)

Responded Lubrano: “It’s a valid concern. You say to 18 members of the board: ‘Here’s a person, you can vote up or down.’ This is the most important role we play as trustees, and now you’re saying to trust us. Trust us.”

That exchange kicked the discussion to a broader level, touching on not only how the presidential search works, but how the board itself works.

First, trustee Carl Shaffer asked Lubrano why he hadn’t raised these concerns when the board passed a resolution establishing the search process in November 2012; Lubrano said he had, privately, and that at the time, the composition of the selection council wasn’t known. Only later, Lubrano said, did it become clear that selection council had only one member who was elected to the board by alumni: Marianne Ellis Alexander ’62.

This prompted a forceful response from Eckel:

“When I see the committee and the board, I see a member of the Board of Trustees. I don’t see someone elected by the ag society. I don’t see someone elected by the alumni. I don’t see somebody from business and industry. I see trustees. All equal in their ability and right to serve …”

Vice chair Paul Silvis ’06g, a guest at the committee meeting, interjected: “And passion to serve, too.”

Eckel agreed, then continued, referencing not only the selection council, but the board’s six standing committees, and the seventh standing committee to be voted on Friday, the compensation committee. “I have absolute confidence in the selection process where we put people on committees,” he said. “I serve on two committees (governance and legal), and tomorrow we will hear reports from four others, soon to be five others. I have confidence in the work of those individuals. … You have to have confidence in the people you’re working with.”

Said Lubrano: “I think the confidence has been eroded over the last two years pretty significantly. To not acknowledge that is to put your head in the sand.”

In the end, Lubrano declined to introduce a motion that would change the makeup of the selection council, which is continuing its work after its reported top choice, the president of SUNY’s Upstate Medical School, was found to have been padding his salary.

Eckel then opened the meeting, as has become his custom since becoming the chair of the committee in July, with a chance for the public to comment. The first speaker was trustee emeritus Ted Junker ’60, who said he’d served on the committees that chose both Joab Thomas and Graham Spanier, and he addressed another comment of Lubrano, about socializing with the spouse of the presidential finalists. The committee did meet with Thomas and his wife, Marly, but did not meet with Spanier’s wife, Sandra ’76g, ’81g.

The next to speak was Alice Pope ’79, ’83g, ’86g, who called herself disappointed in the discussion.

“I think it is reality for us to acknowledge that there are differences of opinions on the board and that they reflect differences of opinions within the community,” she said. “The hiring of the president really requires genuine consensus. We want the next president to succeed. This is really important, opening up a new era at Penn State. We want to form and create the next Penn State out of the ashes of what’s happened here. You proceed without the opinions of the trustees who disagree with the majority, just because they’re the minority. Minorities are important.”

Pope added that just because the process worked in the past doesn’t mean that it has to be used now, and said that as a university professor herself, she knows that some universities have found ways to open the presidential search process more. “Even if you don’t want to be open with the entire community,” she said, “you need to be open to the whole board.”

Eckel stressed that trustees are not disenfranchised—everyone gets a vote on the new president. “And the idea that minorities were excluded from the process is wrong. They were part of the vote that approved the resolutions saying a candidate will be presented to the full board.”

Said Lubrano: “Today, that vote would be very different.”

The meeting was jam-packed with discussion on weighty issues, one of which I’ve already written about (potential changes to the election of alumni trustees) and others of which I’ll explore in later blogs and the magazine. Here are a couple of additional noteworthy items:

—Eckel announced the hiring of Holly Gregory as its consultant to help the board think through additional changes in its governance structure.

—Silvis reported on a meeting that he and Eckel had with state senators John Yudichak ’93, ’04g and Jake Corman ’93, who say they will introduce a bill to reform the Board of Trustees. Silvis said the words “patience” and “participation” came up frequently, and he said the legislators don’t want this to be a confrontational process, but one in which the legislature works with the board. He explained the mindset this way: “Measure twice, measure 10 times, cut once. Because the changes we make in governance are going to be with us for 25 years or longer.”

The presentation prompted Shaffer to ask how much jurisdiction the Pennsylvania state legislature has over the board: “How far can this go? Can they pass a law about our budget? I’m a little concerned about the slippery slope.”

University counsel Stephen Dunham described the relationship between the legislature and the four state-related universities, Penn State among them, as “complicated and unique.” He said he couldn’t answer Shaffer’s question in the abstract: “The lawyer’s proper answer is, it depends on the facts. What area it is, how extensive it is, the history, the charter, the non-profit law. There are lots of issues to look at.”

—Members of the committee met with students who are interested in governance issues and who made a case for a designated student trustee, a case that Eckel called impressive. Eckel also noted that faculty and the Alumni Association would like to have designated seats on the board.

Liz Grove ’84 asked the committee why the conflict-of-interest statements, which the board voted into its bylaws at its May meeting, are not yet public. Frank Guadagnino ’78, a Reed Smith attorney hired by Penn State to consult on governance issues, said the board office distributed two questionnaires to the trustees, one which is the equivalent of the IRS Form 990, the other to disclose “actual and potential” conflicts of interests. He said they’ve received all but two forms, and that the goal is to make information public on the university’s website by the end of the year.

Lori Shontz, senior editor

November 22, 2013 at 10:18 am 3 comments

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