In need of repair

The board of directors of a $4 billion company would never elect a chairman who once worked directly for the company’s CEO.

Too many possible conflicts of interest and cozy relationships exist.

Yet that is exactly what the Penn State board of trustees did by electing Steve Garban chairman to oversee the $4.3 billion university.

Garban spent 33 years at Penn State, including 10 as controller and 12 as senior vice president/treasurer. While he worked in the upper echelons of the university, he oversaw the athletic program.

Somehow it never struck the majority of board members as odd that a former employee would take over the reins of a board overseeing his former boss and others with whom he had a direct relationship.

The Garban situation typifies why swift changes are needed in the workings of Penn State’s trustees.

The board has been in the hot glow of the spotlight since Nov. 5 when a grand jury report was released filled with allegations that former assistant football coach Jerry Sandusky sexually abused boys, including numerous times in the Penn State football locker room and on road trips with the team.

The difficulties of having Garban at the helm became apparent in the first few days of the crisis. There were concerns about Garban’s close relationship to university officials.

Some trustees say the board did not move as quickly as it should have because of that.

That is why the face of the board was John Surma, chairman and chief executive officer of United States Steel Corp., when the trustees announced that university President Graham Spanier had resigned and football coach Joe Paterno was fired.

Garban should have resigned his position as chairman of the board immediately after the scandal became public. At this point, he should step down from the board entirely.

But his election as chairman is just one of the problems that the trustees need to fix.

All boards face challenges but Penn State has some unique issues. Its size—32 voting members plus 16 emeriti members who can speak at meetings but have no vote—is extremely large compared with many college boards, and some trustees say it is unwieldy.

Another troubling point is is that many of the trustees are selected by special interest groups.

Six members are appointed by the governor; five more are the governor and four of his Cabinet secretaries.

Nine members are elected by the alumni, six more are appointed by business and industry, and six are chosen by agriculture societies.

At the moment, the board has one vacancy because Dr. David Joyner, elected by alumni, left to become the school’s new athletic director.

Penn State wants $300 million from the state next year. Students, faculty, parents and all Pennsylvania taxpayers have a right to ask whether the trustees who are selected by the agriculture and business sectors can be truly independent. When push comes to shove, do they side with constituents of the university or the industry groups that appointed them?

“It is hard to be an independent actor if you represent a certain sector,” said Anne D. Neal, president of the American Council of Trustees and Alumni.

The trustees are scheduled to meet again on Jan. 20, and they will have much to discuss. There are the multiple investigations of the Sandusky case going on, including a look at the school’s own policies and procedures initiated by the trustees. The board hired former FBI chief Louis Freeh to oversee the effort, a smart move to make sure the investigation isn’t seen as an internal whitewash.

The meeting also is an opportunity for the board to focus on itself, so it does not fail in its oversight role again.

The board should look for ways to pare the number of trustees and institute term limits of a decade at the most. It needs to limit the role board members who worked for Penn State can play in leadership. It should do away with the notion that agriculture and business interests can choose, and potentially control, 12 of the 32 seats. The nation is watching how the Penn State trustees handle this crisis.

This is the board’s moment to show it is up to the task.