Out With the Old at American U.

Board approves changes it hopes will make governance more inclusive and accountable.
May 22, 2006

The Ladner chapter moved a step closer to being closed Friday when American University’s Board of Trustees announced sweeping changes to the institution’s governance.

The board unanimously accepted all of the recommendations made by the Special Committee on Governance, co-chaired by two of trustees, and then made some of its own additions. The changes affect the structure of the board itself, as well as its interaction with the rest of the university.

Benjamin Ladner, the former president of American, was forced out in October after an investigation found that his spending of university funds -- on items including a personal chef, vacations in Europe, and an engagement party for his son -- was out of control. Ladner’s spending, his ouster, and his subsequent multi-million dollar severance package inflamed passions on campus, and many students and faculty members said they had no input in the governance of the university and that trustees were not questioning the administration. Now that’s going to change, board leaders pledge.

The 25-member board approved 4 new trustee positions. Three of them – two faculty members and a student – will be non-voting trustees, and the other, a recent graduate, will get to vote. Student, alumni, and faculty members will nominate the new trustees from among their ranks, but the board will have to approve the final selection.

One of the main issues the recommendations addressed was how to involve students and faculty members in the board’s work. In the last six months, the Governance Committee met over a dozen times with students, alumni, and faculty members, and the board will now seek to continue the trend of inclusiveness. The recommendations encourage trustees to attend university events, and the board to consistently solicit input, especially with regard to what issues should be priorities at meetings.

Jeffrey Sine, a trustee and co-chair of the committee, said that the changes are an effort to create “a board the university trusts, where that trust is earned.”

The board also took steps to nip any future Ladners in the bud. Every three years, the board will do a comprehensive review of the president’s performance and his or her compensation, with interim reviews annually. All members of the board will be required to review the president’s compensation. When Ladner's spending became public -- his former chauffer leaked to The Washington Post -- some trustees seemed like they were hearing news of his compensation for the first time.

Another issue the committee and the board considered was whether to impose term limits -- a term is three years -- on trustees. The committee noted that “although the deans recommend term limits, the Faculty Senate Committee did not.” The board decided to stick with no term limits, but now every trustee who wants to be renewed will have to submit to an evaluation a year before the end of their term. The evaluation will be done by the board’s Trusteeship Committee, which can seek opinions from outside consultants, but does not have to.

A statement from the deans Friday acknowledged that some of the changes are different from what they recommended, but they expressed satisfaction with the process.

Thomas A. Gottschalk, former interim board chair, when Ladner was dismissed, said that he thinks the changes address the concerns of the university community, and of Sen. Charles E. Grassley, an Iowa Republican and chairman of the Senate Finance Committee, who sent a letter on Wednesday telling the board that if it didn’t fix the governance problems, Congress would.

“I do want you to know that I am considering proposing federal legislation that would require changes in the structure, composition, and governance of the AU board, as Congress has done previously,” Grassley said in the letter. He added that he would specifically consider legislation that would allow the board to force a member to resign.

Board members said that the board already has the power to force a member to resign.

Grassley also railed against the board’s votes to increase Ladner’s severance. Gottschalk said that “a significant majority of the board voted for the settlement with Dr. Ladner,” which, he said, they felt to be in the best interest of American University.

Faculty and student representatives who knew about the approved changes were happy with what they heard.

Three faculty members, including the last and current Faculty Senate chairs, issued a statement Friday that said the changes will bring increased oversight, accountability, and faculty voice. “The consultative approach that has marked board reform has strengthened American University,” the statement read.

Jonathan Loesberg, professor of literature and chair of the Faculty Senate, said that he would send an e-mail to the senate members Friday to see if there was enough discontent with the reforms to warrant a summer meeting. He added that, however, judging by the extremely positive statement, “you can tell what we expect.”

Ashley Mushnick, president of the Undergraduate Student Government, said that she felt like “we only had a week to voice opinions,” on the committee's recommendations. But she added that having a student on the committee helped, and that many student government recommendations “were taken to heart.”

The student government suggested having three student trustees with voting power, but Mushnick said that the non-voting student trustee, and the young alumni trustee, who will vote, is “a very good step.”

Grassley said that "adding students and faculty to the board could be a very positive step.  But it’s important that their representation is meaningful and not just window-dressing.  For example, will they be made to leave the room when important issues are being discussed?" (An aide to the senator said he was unlikely to rule out legislation until getting a complete sense of student and faculty reactions to the changes.)

The non-voting student and faculty trustees, according to the committee recommendations, may have to recuse themselves in some instances like, for example, when they stand to be impacted financially by a board decision, or when attorney-client privileged matters are discussed.

Beyond governance reforms, Grassley said the he was “frustrated” that American continues to redact some information from documents that are released regarding the entire Ladner saga. Gottschalk said that the board is consulting its counsel to figure out which redacted information falls under lawyer-client privilege.

Grassley responded that "attorney-client privilege can be overused. I don’t expect anyone to divulge the university’s legal strategy. But I do expect the release of information that would answer basic questions, such as the basis for decisions by the board of a congressionally chartered university for being so generous with university funds to an outgoing president who appeared to have abused his position." 


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