State lawmakers’ challenge: Improving governance at Penn State

What can be done to improve governance at Penn State?

That’s the question before the Pennsylvania Legislature this week and it’s one legislators can and should address.

Concealing information, finger-pointing, sanctions. That’s not the mental image one should have of a governing board. And yet that is the state of affairs at Penn State in the wake of the Jerry Sandusky scandal.

Yes, something is clearly wrong with governance at Penn State, but it is something that will require more than just the removal of bad actors. The problem is the board structure–a structure put in place by the Legislature at the time of the Civil War that renders accountability to the people of the Commonwealth virtually impossible. This is, happily, something the Legislature can fix.

Examining what caused the breakdown of board oversight is commendable, but it must result in substantive change. Trustees, at their best, insist on checks and balances. They put the big picture ahead of internal demands; they balance competing interests in service of students and the public. They are the eyes and ears of the public to ensure that Pennsylvania’s universities spend tax dollars wisely and transparently, adhere to their mission, and deliver a quality education.

The problems of Penn State governance are clear. They’re spelled out in the reports of former FBI director Louis Freeh and the recommendations of Auditor General Jack Wagner which show an outdated structure, accountable to no one.

It’s time that the Legislators demand accountability by adopting a new and responsive board Charter. Here’s how:

• Reduce the size of the board to a manageable 15 voting members. The board, established in 1855, is now an unwieldy collection of 32 people from a range of constituencies: six are appointed by the governor; six more are elected by the board to represent business and industry; five are ex officio members; nine are elected by the alumni; and six more are named by agricultural societies. Given the size and composition, trustees are not likely to be independent and ask tough questions. And with such a large group, trustees lack the sense of individual responsibility necessary for accountability and responsiveness.

• Remove the right of the Penn State president to serve as a voting member and secretary of the board of trustees. The Auditor General and the American Council of Trustees and Alumni agree that presidents are accountable to the board, and giving them a voting right confuses that role. Trustees must be independent actors, able to bring objective and informed perspectives to the issues at hand.

• Vest appointing authority with the governor. As a single elected official, a governor can be held accountable. Otherwise, there is no statewide leadership, no clear accountability. The legislature should retain appropriate control through oversight and appropriations, including confirmation of board members, and it should insist on a wide range of perspectives and experience. The Governor cannot and should not be on the board.

• Encourage the board to limit ever-rising tuition and fees. Penn State has one of the very highest tuition price tags among public universities nationwide, and tuition has more than doubled in the last decade. Raising tuition or undertaking new building projects should be a last resort, and decisions to raise tuition should require a supermajority of board members.

• Demand transparency. Since they’re representatives of the people, board members should be required to make contact information publicly available. The board should also be required to post an annual report, outlining objectives, and publishing crucial data such as graduation rates, administrative vs. instructional spending, additions and terminations of programs, and effectiveness of classroom and laboratory building utilization. And open communication between faculty, employees of the University and members of the board should be encouraged.

There’s much work to be done, but Pennsylvanian taxpayers and students deserve a far more responsive board structure, one that will ensure accountability.

Trustees once explained to investigators their de facto governance role as a purely ornamental “rubber stamp.” One former trustee said board culture was driven by a small “Power Group,” commenting there was “almost no distinction between this first group and the administration itself.”

Even the sobering findings of the Freeh report have not produced encouraging results. Days after the NCAA held a nationally-televised press conference announcing a range of sanctions including a $60 million fine, some trustees reported they were never apprised. As one trustee bluntly stated: “This is the most significant decision in the history of Penn State, and we didn’t know. The financial impact of this decision could run as high as $500 million, and we didn’t know anything about it.”

It’s time for trustees to know–and it’s time for the Legislature to help them.