Fourteen prominent alumni outlined their grievances Tuesday, in regard to “unanswered questions significant to competent corporate governance, ” which they feel tarnish U.Va.’s reputability. This document follows the open letter the alumni sent to the Board of Visitors in August, which questioned the BOV’s role in the ousting and reinstatement of President Theresa A. Sullivan.
This time, the alumni reach out to the whole state of Virginia and call on the General Assembly to review the role of Rector Helen Dragas and her influence on the “relationships within the Board and with UVa’s administrative officers, the faculty, and the great majority of alumni.” The outline features a comparison to the Penn State child sex abuse scandal and the consequences of cover-ups in institutes of higher learning. Full text of the legislative goals below:
Coleman
Contact: richardmarks@earthlink.net
September 4, 2012
UVa Alumni for Responsible Corporate GovernanceLegislative Briefing Paper
Question: Following the Board of Visitors’ August retreat, what justifies still insisting on a detailed General Assembly review of the Board’s conduct from June 2012 to date? Why not simply set aside the past and moveforward in a spirit of reconciliation as Virginia Gov. McDonnell suggests?
Answer: Unanswered questions significant to competent corporate governance continue to damage UVa’s reputation and its operational efficiency, faculty recruiting, and capacity for strategic planning. These open questions relate to how and why a faction of the Board moved in haste to force the resignation of UVa’s president, who is widely admired and experienced in academics and university administration. A comprehensive look back in depth is the only way to understand how and why the Board’s leaders breached corporate duties of due care and fair dealing by:
1. Failing to distribute to the full Board a crucial May 3 “Academic Strategy” memorandum fromPresident Teresa Sullivan (sent in draft to the Rector and Vice Rector) while asserting to other Boardmembers that the President was not sufficiently focused on strategic planning.
2. Failing properly to manage the Board itself, notably by manipulating Board processes to avoid a Boardmeeting or a Board vote on the major issue of firing President Sullivan.
3. Declining to offer any credible explanation either (a) for the push to fire President Sullivan, or (b) forthe Board leadership’s deviation from corporate governance norms in firing the President without anydiscussion among the full Board in open debate and without a vote of its members.
4. Failing even to try to gather facts about UVa’s use of digital technology for instruction, allowingthe Board’s leadership to conclude erroneously that UVa’s faculty and administration were notincorporating digital technology into instruction. (UVa in fact is a leader in the field.)
5. Creating a wholly avoidable public crisis that continues to damage UVa’s brand and business.
6. Continuing to cover up these major corporate mistakes by asking everyone to ignore them.
Understanding these major deficiencies is the essential first step in remedying them for the future. As part ofthis analysis, the General Assembly should examine whether the continued role of the Rector adversely affects relationships within the Board and with UVa’s administrative officers, the faculty, students, and the great majority of alumni, and impairs UVa’s strategic planning processes.
Additional observation: Press reports analyzing university corporate governance compare UVa’s problems to Penn State’s. Penn State’s scandal includes criminal sex abuse. It is different from, and far worse than, governance issues at UVa. Yet similarities between the two universities include abysmal decisions by their governing boards and charges of board cover-ups. Considering the continuing adverse impact on UVa, and on the Board’s reputation, in the aftermath of June’s events, the General Assembly should ask why the Board’s leadership that created this wholly avoidable crisis has not already resigned.
Conclusion: Competence, consistency, and faithfulness in corporate governance are essential to sustained success at every university. Confidence in the governing board’s competence, lost for now at UVa, is fundamental to every university’s capacity for strategic planning in the digital age. UVa, for better or worse, is an ongoing case study of university corporate governance reform and strategic planning; and no deference isdue UVa’s Board while such significant doubts remain about its capacity to govern UVa in the months ahead. The General Assembly therefore should examine the conduct of UVa’s Board leading up to, during, and after the precipitous events of June. Further: (a) For the long term, the General Assembly should begin to considera process for changing how boards of visitors’ members are selected at all of Virginia’s public colleges anduniversities (in consultation with leaders from all constituencies at these institutions). (b) In the short term, the General Assembly should consider rejecting Helen Dragas’s nomination for a second term on UVa’s Board because of her acknowledged key role in June’s crisis and demonstrated record on corporate governance.
Richard P. Bartley, College ’73 James B. Rouse, College ’66
Walter G. Birkel, College, ’69 Barbara D. Savage, College ’74
Richard C. Bradley III, College ’66 William Scanlan, Jr. College ’63
Margaret Ann Brown, College ’74, Law ’77 Andrew Stuart, College ’82
Jack M. Coe, College ’67 Edward C. Swindler, College ’76,
Mary Bland Love, College ’74, Law ’78 Grad. A&S ’82, Darden ’84
Richard D. Marks, College ’66 Stephen A. Taylor, College ’74
Gay Outlaw, College ’81
[For full disclosure, Andrew Stuart and Edward C. Swindler are members of the board of directors of WUVA, Inc., and Richard D. Marks is its general counsel.]
