The fabled Penn State Football program has been challenged over the past several years, leading to the firing of the legendary football coach, Joe Paterno (who subsequently died), the ousting (among other parties) of Penn State President, Graham Spanier, and Penn State Athletic Director, Tim Curley, along with the Vice President of Finance and Business. It is well known that a principal charge against the program was Paterno’s failure to effectively report the actions of former coach Jerry Sandusky in molesting a young boy in the Penn State locker room, followed by a history of his continual sexual molestation of boys involving the charity he ran, The Second Mile. The problem was exacerbated when the Penn State Board and officials, advised of the situation, took no effective remedial action.
Sandusky was convicted in court, fined and sentenced to prison (he is appealing). The NCAA imposed sweeping sanctions against Penn State Football, including a $60 million fine, vacating football wins from 1998-2011 (112 wins), a four season post season ban, a four season scholarship reduction, and athletic department probation for five years. The NCAA did not, however, impose the “death penalty”, i.e., the requirement that Penn State terminate its football program for one or more years. The report of former F.B.I. Director, Louis J. Freeh (commissioned by the Penn State Board) reported that the failure to stop Mr. Sandusky revealed numerous operational shortcomings of the Penn State Board. The Board and authorities failed to function properly in part because of “a cultural deference” surrounding Coach Paterno and his football program, which dominated University operations and fundraising. In such a case “deference” may be defined as “a yielding of judgment or preference out of respect for the position or wishes of others.”
The Trustees were portrayed in the report as “passive overseers so in thrall to the President and Coach that they failed to demand the barest display of accountability.”
How did the Freeh Report (and/or subsequent report of the Pennsylvania Department of the Auditor General, Jack Wagner), specifically criticize the operation and functioning of the Penn State Board, and what did they recommend?
1. The Board of Penn State consisted of 32 individuals, too large a group to function effectively. The size of the Board resulted in most work being done in Committee, and a few Officers of the Board and Trustees made Board decisions. The report of the Auditor General recommended that the size of the Board be reduced from 32 to 22, to include 21 voting members, and one non-voting ex-officio member (the Governor). Eliminated from the current structure would be Penn State’s President, and procedures for the selection of alumni, representatives of agricultural, business, and industry, and gubernatorial appointments to the Board, would be modified, The State Governor would continue on the Board in a non-voting capacity.
2. The Penn State Board allowed high level University employees to become Trustees/Officers, and vice versa, thus creating a cast of influential insiders with a potential to impair objective and independent thinking. Such appointments should be prohibited.
3. Previously 13 members, or 40% of the 32 voting Trustees, constituted a quorum for transacting business — A quorum should be a majority of the voting trustees.
4. The Penn State Board often operated in secrecy by restricting the public’s access to the Board and its deliberations, and controlling how Trustees communicate. Penn State should be subject to the Right-to-Know Law and the Ethics Act, which legislate transparency — “good” grievance procedures go beyond compliance with legal requirements.
5. The Board had no effective limits in years of service, some members having served for decades — term limits should be established and enforced (6-8 years term limits are recommended). There was a revolving door for insiders.
6. The general consensus was that the Penn State Board was organized, and functioned, imperfectly, failing to provide the effective oversight of a major educational organization for whose wellbeing it was responsible.
It should be noted that some of the most trenchant comments concerning the restructuring of the Penn State Board came from the Washington based organization known as the American Council of Trustees and Alumni, which has established itself as a major conscience of the operation and functioning of the educational Boards of Trustees.
It has been suggested that prospective members of a board of a publicly financed entity, such as a university, hospital or library, be required to take a course on the ethical responsibility of public trustees as a condition to their appointment to the board.
The sad story of the malfunctioning of the Penn State Board should be an example (in fact a lesson) to all non-profit boards as how not to operate.