About Face?

Trustees at financially struggling Birmingham-Southern turn to retired general and banker to lead hoped-for recovery.
March 22, 2011

This has been the year from hell for Birmingham-Southern College. Just as the Alabama institution and many of its independent college peers thought they were emerging from the worst economic downturn in a half century, an audit last spring revealed that years of financial mismanagement and accounting errors had allowed the small college to operate for years while spending millions of dollars more than it actually had in its budget. Cuts to staff, salaries and pension contributions followed in the summer; the president resigned shortly thereafter. Last month, the trustees' top choice to lead the institution withdrew, citing family considerations.

And the hits keep on coming: as recently as Friday, Moody's Investors Service once again downgraded the college's credit rating, The Birmingham News reported.

Into that breach on Monday stepped General Charles C. Krulak, a former commandant of the U.S. Marine Corps whom Birmingham-Southern introduced as its new president. In normal times, Krulak's military background -- he was a member of the U.S. Joint Chiefs of Staff -- and his post-service career as a bank executive might have been a double whammy for some professors at a liberal arts college. (The fact that Rodney Ferguson, the public relations consultant who withdrew as a candidate last month, did not have a Ph.D. was raised in some circles on the Birmingham-Southern campus.)

But these are anything but normal times. A faculty member on the search committee, Natalie Davis, acknowledged that "at first, many faculty members were skeptical about the idea of a former Marine commandant becoming the college’s academic leader." But a survey of employees conducted by the search committee, said Davis, the Howell Heflin Professor of Political Science and a department chair, found overwhelming support for him.

"He comes across as someone who ‘gets it,’ " she said.

In an interview, Krulak said he had done "a great deal of due diligence" about Birmingham-Southern before deciding to take the job -- beginning last fall with his own version of a "secret shopper" review of the campus before he became a candidate. On his way to visit one of his sons a few hours from the campus, Krulak and his wife stopped at Birmingham-Southern without the knowledge of campus officials and spent six hours, "incognito," talking to "people in admissions, financial aid, students, police, the post office."

He and his wife were so impressed by the atmosphere on the campus and the attitude of employees and students, despite the year's struggles, Krulak said, that by the time they had completed the drive to their son's home, "I was a candidate."

The more formal due diligence involved not only the obvious questions about the college's finances but also questions about governance. Last summer's announcement about the resignation of President David Pollick also acknowledged a "thorough review" of Birmingham-Southern's structure, which, like many independent colleges, includes a large and often unwieldy board. "The sheer size of the Board of Trustees with 61 members and the massive committee structure with 12 committees is indicative of a need for a review of best practices today in governance of colleges," Dowd Ritter, then-chairman of the board, said at the time. "We as a college and as trustees should learn from these lessons and never allow this to happen again."

While the governance review is still under way, Krulak said he had been persuaded that the board's current and newly elected leaders share his concerns "that if the board is going to hold me accountable as president of this college, I'm going to have some say in ensuring that the governance of the institution is effective and efficient.... They understand that and I understand that."

Krulak said he believes that for all of Birmingham-Southern's well-publicized financial problems, the biggest challenges facing it are the hits its reputation has taken, and the need to differentiate its curricular and other offerings from those of other colleges. Institutions that are unable to answer questions like "What is it that makes you unique? What sets your school apart from any of the others?," he said, are going to struggle and may ultimately fail.

He said he also recognized that Birmingham-Southern's employees had been bruised by the sacrifices they had made over the last year, which included layoffs of dozens of staff members, a pay cut of 10 percent, and the cancellation of all faculty sabbaticals for the year.

So while he will ultimately earn the several-hundred-thousand-dollar salary of his predecessor, Krulak will do without pay in his first year. (He acknowledged that he is the beneficiary of the pension of a long-time U.S. general, so he is "not eating MREs.")

"These young faculty and staff members have been sacrificing -- my hat is off to them," Krulak said. "For a period of time, with pay cuts, they went and increased the amount of classes they were teaching, and had their pension fund contributions interrupted. Coming in as president, and going ahead and taking my salary, just would have sent a terrible signal."

He reached back to his military service for a parallel. "As a general, you're not going to ask your Marines to do something you won't do."


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