Trustees | Crisis Management

MSU trustees absent, overrun by Nassar scandal

THE DETROIT NEWS   |  January 25, 2018 by Daniel Howes

Michigan is the only state in the country that uses at-large statewide ballots to elect trustees for its flagship universities — and that’s a problem.

There’s a lot less accountability in the board room. The massive reverberations from the Larry Nassar sexual abuse scandal roiling Michigan State University this week claimed its longtime president, Lou Anna K. Simon. She shouldn’t be the last.

Where, exactly, has the university’s board of trustees — mostly a collection of old jocks, a few small-business people and an octogenarian football coach — been on this long downward arc to ignominy? From this week on, the name “Michigan State” will be synonymous with “Penn State,” shorthand for officially sanctioned serial molestation.

Spartan Nation has more than Nassar to thank for such notoriety. Trustees are elected to govern the institution’s leadership, to ask hard questions, to anticipate damage and to act. That’s especially true when their CEO is struggling with both the optics and management of an unfolding scandal trashing the university’s reputation, exposing it to massive legal liability and projecting arrogance.

MSU’s governing response to this moral stain can be boiled down to two equally uncomplimentary things: cluelessness and finger-in-the-wind butt-covering totally devoid of crisis management acumen. Which ought to raise a question among those who care how the likes of MSU, the University of Michigan and Wayne State University are governed:

Is there a better way to select trustees than through partisan statewide ballots favoring party affiliation, powerful friends or the fading glories of a few short seasons spent on the football field? Yes, if most of the country is any indication.

Michigan is the only state in the nation that uses at-large statewide ballots to elect trustees to its three main universities. Colorado elects two of nine trustees by statewide ballot; the remaining seven represent districts. And trustees to the Nevada state system are elected by districts.

“Michigan is in the extreme minority of states,” Michael Poliakoff, president of the Washington-based American Council of Trustees and Alumni, said in an interview Thursday. “You have absolutely identified the issue here. The overwhelming number of states use gubernatorial appointments. A board should be composed of people who have the technical expertise and independence to serve the public.”

At Michigan’s Big Three universities, they mostly aren’t. Instead, the people most likely to win election almost always are those with the political connections or broad name recognition to find their way to partisan primary ballots.

That’s no way to select the higher education equivalent of corporate boards of directors overseeing publicly funded budgets tallied in billions. In East Lansing, the eight-person board includes a former football coach, George Perles; two former football players now in the financial advisory business; and a former basketball player-turned-Meijer Inc. executive.

There’s a small-business woman, Melanie Foster, who served as CEO of a commercial landscape firm. Dianne Byrum, a former House Democratic leader known in the capital as a fierce advocate for women’s issues, sits on the board, too. Her feminist zeal seemed to evaporate in the heat of the Nassar scandal until the end became inevitable.

And there’s Joel Ferguson, a real estate executive whose dismissive swipe at “this Nassar thing” illustrates just how entitled and out of touch the trustees’ boardroom can be. He has been on the MSU board for 32 years, first elected during Ronald Reagan’s second term.

A deep bench it ain’t. Evidently term limits are good for the governor, good for the state House and good for the state Senate. But not for those governing Michigan’s flagship universities, clamoring as they likely are for prized suites at Spartan Stadium and seats in the Breslin Center.

Because, after all, isn’t that what a board seat at Michigan or Michigan State is all about — prized suites and sideline passes, special baubles commemorating the latest bowl game, the occasional chance to repay a favor by talking to the admissions office? Not entirely, but probably more than it should be.

If there’s any chance of changing the way the state appoints trustees to its Big Three universities, the Nassar inflection point should be it. Gubernatorial appointments, favored by most states and the Association of College Trustees and Alumni, are more likely to deliver more diverse skill sets and managerial experience than Michigan’s politicized system of at-large statewide elections.

Any change would require amending the state constitution, a move that could be achieved by gathering enough signatures to field the ballot question. This much is certain: the constitutional fig leaf now protecting Michigan State’s trustees is a barrier to accountability.

So are their eight-year terms. How many Spartan faithful will still be steamed at, say, Ferguson when his name again appears on the ballot — in 2021? Or Perles, in 2023? Or Byrum, that profile in courage, in 2025? Their protection may be constitutional, but is it right?

In a state full of Fortune 500 companies in leading industries, and privately held businesses that are just as successful, only one member among the state’s Big Three boards is a sitting CEO of a for-profit company: David A. Nicholson, vice chair of Wayne State’s board of governors and CEO of PVS Chemical Co.’s manufacturing group.

Any publicly traded company worth a dime of shareholder money learned a long time ago — thanks to the shareholder revolution of the 1990s — that boards stocked with executive talent representing diverse industries and expertise are more likely to deliver the robust boardroom debate they should.

And effective executive oversight. Michigan State’s annual operating budget is $1.3 billion. The University of Michigan’s totals roughly $7 billion, according to its 2017 annual report, including its self-described “renowned” health care system.

This is no way to govern multi-billion dollar public institutions largely financed with taxpayer dollars. It’s certainly not the way to run Michigan State — especially not now.


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