Every Penn Stater I talk to about the events leading up to November of 2011 shares a common emotion. Many are hurt, some feel betrayed, but all are angry.
That anger has many roots, but perhaps the most common among the alumni with whom I’ve talked is a general feeling that the Board acted in haste and that actions were taken without adequate consideration of their impact. They acted too quickly, without all the facts.
I’ve served on non-profit Boards and I’ve advised Boards of some of the most complex enterprises in the world. In my experience, Board members make decisions all the time without access to all the facts. Organizational leaders and executives do it all the time, too. It is the rare decision that comes packaged with all the relevant facts that are necessary to make a fully informed decision. This isn’t a failing of leadership . . . it is, instead, an expectation. But the key point here is not that decisions get made without all the facts. It’s that decisions should only get made that way when the facts aren’t available and circumstances call for leaders’ best judgement. If the facts are available, management and the Board have an obligation to put them on the table and make sure they’re well understood when making decisions. I think it will be some time in these difficult events at Penn State before any of us have all the facts.
I think Sue Paterno captured the feelings many of us had when she reportedly said, “after 61 years he deserved better.” But if we believe that all of the mistakes were made that November night, then we are fooling ourselves about the complexity of the problems faced by Penn State and we are deluding ourselves with regard to the decision-making capability of any Board. The uncomfortable and inconvenient reality is that the Board should have never found themselves assembled that November night equipped only with the lousy set of choices they faced. Inaction long before November created the environment that brought us to those dark circumstances.
Regardless of how you feel about how the Board ultimately executed those decisions, their actions that night opened up a debate about the governance structure at Penn State and ignited calls for reform from thousands of alumni. These underlying issues are the ones that need attention if we want to act on more than our anger.
Penn State’s Board Structure
By now, many of us are familiar with the make-up of our Board.
First, we have our “Ex Officio” members, including the Governor, the Secretary of Education, the Secretary of Agriculture, the Secretary of Environmental Resources and the President of Penn State. The Governor also appoints six additional Trustees.
We have six trustees elected in connection with the State’s agricultural societies. We have the nine trustees elected by the Alumni. And finally we have six Trustees that are appointed to represent “business and industry,” selected by the other Trustees.
Our governance structure and our Board are a function of the original act incorporating the “Farmers High School” and subsequent Acts of the Legislature as well as various decisions in Centre County Courts. While The Pennsylvania State University may be a corporation by way of legal structure, it does not enjoy the same flexibility nor degree of self-determination with regard to its governance as other organizations. We are at the mercy of the State Legislature and the Governor. Perhaps some legal remedy could be sought in connection with privatization, or legislative act encouraged as part of such an effort, but in the absence of those steps, all roads to structural governance reform lead through Harrisburg.
Some of the other candidates for the Board have suggested that our governance structure should be dismantled, and more Internet postings that I can count have called for “the whole Board to be fired.” The simple reality is that the Board could resign, but they can’t be fired except, perhaps, by Legislative Act. Similarly, since our Board was created by the Pennsylvania legislature and the structure they put in place has been reinforced through the last century by a series of Court rulings, even “simple” restructuring of our governance would require the same — a legislative Act.
Is there anything about the history of our relationship with the State of Pennsylvania that suggests we’re going to be able to persuade that body to legislate away their voice at Penn State?
Insights from our Peer Universities
We might be tempted to bemoan this terrible fact, but I think it bears mentioning that some of our peers in the Big 10 are living with governance structures that are in some ways even less appealing than ours.
Ohio State University enjoys a Board that sounds a little less cumbersome than our 32 member Board — they have 17 members. But each and every one of their members are appointed by the Governor with the advice and consent of the State Senate for nine year terms. Two of their Trustee seats are reserved for students of Ohio State. . . which sounds very progressive until you get to the next paragraph, which strips these students of voting authority. As if that’s not bad enough, the paragraph further ensures that no sensible person would mistake these students for actual Trustees, clarifying that they should not be considered for purposes of quorum. In the world of governance and Robert’s Rules, that’s sort of like saying they’re never actually present, even if they are.
Off to Michigan State. These folks have embraced two seemingly incompatible ideas: a small, strong Board built on populism. How have they accomplished this magical fusion? The Board is made up of only eight people — a small Board by most governance standards. Small Boards can be good in some instances, because they tend to eliminate factions on a Board and the small size allows for easier consensus-building, clarity of authority, and rapid decision-making. But these eight Trustees are elected by popular election with votes cast by the citizens of Michigan. Essentially, these are eight state-wide officeholders. Should they die, resign, or for some other reason be unable to serve their term, their replacements will be appointed by the Governor.
Ok, how about Wisconsin? Well, 18 members, all appointed by the Governor for seven year terms. But at least Wisconsin reserves two of those seats for students, and other than a sensible two year term for these students, there does not appear to be the gutting of authority and voice to which the good people of Ohio subjected their student Trustees.
One more . . . Indiana. Those Hoosiers are practical people. Nine Trustees for three year terms, of which six are appointed by the Governor, and three are elected by the alumni (one every year for staggered three year terms). In 1975 the State Legislature empowered the Governor to appoint a student member of the nine person Board, and there has been a student representative ever since.
So following this comparison to some of our peers, you’ve probably noticed a few interesting things, as I have. We are more complicated. We are larger. We have no designated student representative (though we have had student representation by tradition). We have multiple constituencies electing varying factions on our Board. Our Board has the unique authority among the small group of peers to appoint a portion of its own membership. And we are the only one of this peer group that seats our Governor on the Board and gives him a vote.
It suggests to me that structural changes are in order.
So what will it take?
I’ll re-emphasize the point that I don’t think change in the governance structure is likely to move through the PA Legislature, and even if it did, I doubt the Governor would sign it. And even if those things would both happen, they would likely take a while.
But if we could overcome those barriers, there are changes that should be considered. In my view, there are a few important steps that could be taken to strengthen and streamline our governance:
(1) Eliminate the Ex Officio seats on the Board except for the President of the University. The Governor has plenty of voice as do others in the State government by virtue of the purse strings they hold and the regulatory oversight they maintain over many aspects of our University. Does anyone really think if the Governor or the Secretary of Education calls with a point of view, we’re not going to at least hear them out? They don’t need seats on the Board. This step takes four seats away, leaving us at 28.
(2) Let the governor keep his six appointments, but designate specifically that at least one of these shall be reserved for a student at the University for a shorter term (two years). And no gutting their voice . . . full voting authority with the same powers and duties as any other Trustee. This has been tradition, I think it should be formalized.
(3) Eliminate or reduce the election of Trustees from the Agricultural societies. I know some may cry foul given the importance of agriculture in the legacy of our University and in the economy of our State. But as Ag Extension as a function of our University has continued to decline in importance relative to all of the other operations of Penn State, designating such a large block of representation to these societies is an outdated nod to another time. The Governor could always appoint representatives from this constituency if he saw the need. Cut this representation, taking away four and keeping just two . . . and that leaves us at 24.
(4) Maintain the alumni representation at nine. With a smaller Board, this representation will naturally have a stronger voice. But while I obviously see the importance of alumni representation, I disagree with those that are calling for a Board made up exclusively of alumni. We are not the only stakeholders nor is an election process the best way to ensure that we have the compliment of skills, perspectives and capabilities necessary to lead an organization as complex as Penn State.
(5) This may be an unpopular view, but I believe the Board should retain its current ability to self-appoint trustees. I see no need to designate these as “representing business and industry,” instead, these should be appointed by the Trustees in order to bring diversity of viewpoints to the table. It’s also an opportunity to ensure that the skills and experience necessary to address our challenges are in the room. . . compliance or governance expertise, land development and architecture, research, medicine, etc. I would propose in a smaller Board this representation be reduced as well, from six to four, leaving the Board at 22.
In order to provide for continuity with the two year student Trustee, terms should be shifted for all members from three years to four years. In addition, term limits should be imposed. No individual Trustee should be able to serve more than two consecutive terms, with the terms of the various contingents of the Board appropriately staggered to provide for continuity.
I’m an optimist at heart, but even I’m not optimistic that those changes could be pushed through the legislature.
So if we can’t change structure, we need to focus on the practices, policies and procedures adopted by the Board in its execution of its oversight and governance function.
So next up . . . Let’s talk Standing Orders, and why Process will trump Politics.