Abuse of Power

No doubt Penn State will become a case study on many levels for years to come.  Implications for boards go far beyond the limits of higher education and are a sobering tale of abuse and abdication of responsibility.

Here are selected lowlights from the Louis Freeh report of his investigation into Penn State and the Jerry Sandusky horror.

• Before May 1998, “several” staff members and football coaches “regularly” witnessed Sandusky showering with young boys; no one reported this behavior to a superior.
• In May 1998, when a mother reported her suspicions of the sexual assault of her son by Sandusky, University Police and the Pennsylvania Department of Public Welfare investigated, in the end advising Sandusky not to shower with young boys.  No Penn State official talked to Sandusky about the alleged sexual assault, nor did they limit his access to Penn State’s campus.
• Despite the fact that senior Penn State officials, including the President, all knew of the criminal investigation, the Board of Trustees was never informed.
• February 2001, Assistant Football Coach Mike McQueary witnessed what he did and reported it to Joe Paterno.  On 5 March, Athletic Director Tim Curley met with Sandusky and told him that they (whoever that is) were “uncomfortable” with the reported incident and that he would be talking with the folks at Second Mile, the nonprofit Sandusky founded, and the pipeline for his victims.
• In March 2001, Curly did meet with the Executive Director of Second Mile to inform him of what McQueary witnessed.  The Executive Director of Second Mile, in turn, spoke with two members of his Board of Trustees, and together they determined that the alleged activity was a “non-incident” for Second Mile and they did not need to do anything.  In addition, the Executive Director disregarded Curley’s advice not to allow Sandusky to bring children onto Penn State’s campus, telling Sandusky only to get clarification as to whether the suggested prohibition applied just to the locker rooms, as Sandusky argued, or to a larger swath of campus.
• At the March 2001 Board meeting, University officials, yet again, did not mention anything about this latest event to the Board of Trustees.
• In September 2001, still ignorant of the investigation, the Board of Trustees agreed to sell a parcel of land to Second Mile for the exact same price it had paid two year earlier.  The press release announcing the sale “praised Sandusky for his work with Second Mile.”
• Despite the fact that the Grand Jury investigation subpoenaed information from Penn State in early 2010 and University officials testified before the Grand Jury in 2011, which was reported in the Patriot-News  on March 31, 2011, it wasn’t until the May 2011 board meeting that the Board of Trustees learned of the Sandusky matter, and only then in response to the inquiries of one Board member who had read the March story in a newspaper. The report the Board of Trustees got downplayed the seriousness of the matter and reportedly lasted anywhere from three to 20 minutes with few questions asked by board members.

A “common perception” held by board members attending that meeting was that this was not a matter of significance to the University.

• For the next seven months, the Board of Trustees did nothing: it asked for no additional information, did not explore the possibilities of damage to the University, did no scenario planning; nothing.  Instead, it exhibited a “complacent attitude.”
• In November 2011, when the criminal charges against Sandusky were announced, then and only then did the Board of Trustees request an independent investigation.

Those are some of the facts as exposed by Freeh’s investigation.  Here are some of his conclusions about the performance of the Board.

• “These individuals [ President Graham Spanier, Curley, Vice President  Gary Schultz, Paterno, etc.], unchecked by the Board of Trustees that did not perform its oversight duties (emphasis added), empowered Sandusky to attract potential victims to the campus….”
• “The Board also failed in its duties to oversee the President and senior University officials in 1998 and 2001 by not inquiring about important University matters and by not creating an environment where University officials felt accountable.”

While these facts speak for themselves, I am afraid that in too many corners they will not.  To a great extent, every nonprofit board member and executive director (or whatever you call yourself) out there, regardless of the age, mission, geography, financial position, etc. of the organization on whose board you sit, owes a debt of gratitude to Penn State.  If you are smart and savvy, you can learn without any of the costs, and they will be enormous.  (Legal experts are putting Penn State’s cost for the fallout of this at in excess of $100 million, and that doesn’t include legal fees.)

Lesson #1:  One of the key responsibilities of boards is to provide oversight—oversight of the organization, finances, sustainability, mission, including both the what is done and the how it is done (read in a moral framework, among other things), and executive leadership.  Oversight does not happen simply by sitting in meetings and having others talk at you.  Oversight happens through an interactive process of receiving data in advance of meetings, thereby allowing time to absorb and mull over the data; attending meetings where questions are asked—and direct and forthright answers are given; and free-flowing and thorough discussion takes place.  Penn State’s board, it seems, acted as so many nonprofit boards do:  as sponges.

But even a good process for oversight is not sufficient for good oversight actually to take place.  Hence, Lesson #2.

Lesson #2:  The board really does guide the ship; executive leadership drives it.  For this to work, there actually has to be a partnership between the board and the executive director, albeit one of slight unequals.  In true and successful partnerships, there is a balance in leadership, allowing one partner to rely more heavily on the other(s) at times, while at other times the weight shifts in the other direction.  In successful partnerships, there is a real exchange of ideas, a back and forth, a sharing of concerns and a brainstorming of solutions.  In successful partnerships, one partner doesn’t let the other get blindsided by things, big or small, as all partners recognize that a problem for one is a problem for the whole.

It is hard to know who was at greater fault in the failure of the partnership at Penn State.  Clearly, the President determined what the Board should and should not know; and it would appear that the Board hadn’t, at least in quite some time, really demanded anything beyond what it was given.  Perhaps 16 years in office emboldened the President and made the Board complacent, thus destroying the partnership.  Oversight, however, can never be handed over to the overseen.

Lesson #3:  It is imperative that board members understand the full set of responsibilities that goes with being a nonprofit board member and that they understand that their loyalty and responsibility is not to themselves or their friends but to the mission and the promises that they make, through that mission, to their stakeholders and the larger public.  How could a board member of a youth serving organization say that an allegation of sexual misconduct by an adult member—even if he weren’t the founder—of their organization, employee or volunteer–with a member of their client population is a “non-incident” for the organization?

Did those board members (and that executive director) not understand the mission of the organization?  Did they not know that board members are supposed to protect the public trust as they work as board members? Did they not feel any moral—forget legal—obligation to protect children?  How does a board learn that key members of its senior leadership are testifying in front of a grand jury and not stop, right there, and ask tough questions, demand thorough answers and push to understand the potential consequences of the alleged crime being investigated by the grant jury?  It is, quite frankly, beyond comprehension.  Did they not know that it was their responsibility to understand? Did they not know it was their job to question? Did they not understand that the President worked for them and he was obligated to answer to them, and not the other way around?

Lesson #4:  It is imperative, if as board members we want to keep the public’s trust and, therefore, increase our survival rate as a nonprofit, that we create and oversee a moral organization.  Noticeably lacking in this whole ordeal as laid out in the Freeh report, and commented on numerous times in that report, was concern, compassion, care for the past, present and future child victims.  The only thing that seems to have received concern, compassion and care was the protection of Penn State, whether the football program or the whole school, it is hard to know.  What we see there was a morally corrupt organization.

People have many different reasons for wanting to serve on a nonprofit board – everything from giving back to paying it forward to expanding one’s business network.  Motivators to join a board are not the same as those needed to do a good job on a board.  And board members must do a good job—which means they must first understand exactly what that job entails—or risk being the next Penn State and being complicit in the crimes of the institution.