The independent report  released Thursday about the Jerry Sandusky scandal at Pennsylvania State University points fingers in all directions. Many of the individuals named have been under scrutiny for months – Tim Curley, former athletic director, and Gary C. Schultz, former senior vice president for finance and business, for example. But it also issues an even harsher critique of the actions of several other university administrators, including the former university president, Graham Spanier, and the general counsel and former board chair, Cynthia Baldwin.
One group Investigator on whom Louis Freeh hangs a significant amount of blame, and one who hasn’t faced the type of scrutiny as the campus administrators, is the university’s 32-member Board of Trustees, the entity that has final legal authority on all university matters and is charged with maintaining the university in perpetuity. While the board faced criticism for how it fared in the wake of Sandusky’s indictment – particularly its poor public relations response and the firing of Paterno – it has not faced significant blame for failing to report and stop Sandusky's sexual abuse of boys.
That ends in Freeh’s report , which is highly critical of the board’s inaction and charges members with being asleep at the wheel. Freeh’s report makes two major complaints against the Penn State board. First, it says that in 1998 and 2001, two years when complaints about potential inappropriate activity by Sandusky were brought to the attention of university administrators, but not the board, “the Penn State board failed to exercise its oversight functions.” By not having proper reporting procedures or committee structures in place to ensure disclosure of major risks to the board, and by not fostering a climate wherein such incidents were expected to be reported, the board did not properly exercise its oversight function, the report states.
The Penn State Report
--The investigation identified many culprits, but also pointed to a much larger, more complicated problem: the unchecked culture of athletics on campus.
--Independent report blasts  conduct of senior university leaders and says that they "failed" to protect Sandusky's victims.
--Nike strips Joe Paterno's name from its child care center.
“The board allowed itself to be marginalized by not demanding thorough and forthright reports on the affairs of the university,” Freeh wrote in the report.
Freeh’s second major charge is that after Spanier and Baldwin notified the board in May 2011 that there was a grand jury investigation involving university officials, “the board failed to perform its duty of inquiry, especially when it was on notice that the university was facing a major risk involving the grand jury investigation,” he wrote. “The board therefore did not meet its ‘continuing obligation to require information or answers on any university matter with which it is concerned.’ ”
In a press conference Thursday afternoon, the board took full responsibility for the failures that occurred on campus. “The Board of Trustees acknowledges that it failed to create an environment of accountability and transparency and did not have optimal reporting procedures or committee structures,” the trustees said in a statement . “Beginning in March 2011 and continuing until the publication of the grand jury presentment in November 2011, the board failed to make proper inquiry of President Spanier and others regarding the Sandusky matter. As a result, the board was unprepared to deal with the events that occurred in November 2011.”
Board member Kenneth Frazier, who serves as chairman, president, and chief executive officer of Merck & Co., said the board’s failure was not that members did not ask the right questions of top administrators, but rather that the board members' trust in Spanier prevented them from pushing hard enough to get “deeper” answers to the questions they asked. “We asked enough questions that if someone wanted to share what was going on, they could have shared what was going on,” Frazier said. “In retrospect, we wish we had pressed harder upon someone we had complete trust in.”
The Penn State board’s deference to university administrators is something that worries higher education researchers and others involved in university governance. They said such attitudes are common among trustees, and that few boards have proper reporting procedures in place.
But the advice that university trustees should get more involved what’s happening on their campuses is complicated by what happened at the University of Virginia last month, in which many higher education observers said the board over-reached  and got too involved in day-to-day university affairs.
“Every board has to strike a balance between two undesirable extremes: one is undue deference and the other is undue interference. That spectrum changes as a result of the issues,” said Richard Chait, a professor at Harvard University’s Graduate School of Education who studies university governance. “The guideline I suggest to boards is that, in the areas you think the risks are greatest, tilt in the direction of undue interference.”
Chait said boards need to discuss which areas of their campuses are likely to be of greatest concern for the university’s long-term reputation, and most vulnerable, and focus their energies there. “It’s a good lesson for boards, to learn to be persistent when it’s pertinent and appropriate,” he said. “Too often they’re persistent or aggressively hands-on when it’s not appropriate.” At a place such as Penn State, he said, athletics is probably one of those areas requiring vigilant oversight.
One of Freeh's major charges against the board is that it simply did not have structures in place to ensure that information that should have reached the board did. At no point during the incidents in 1998 or 2001, which top administrators were aware of, did administrators notify the board about the concerns regarding Sandusky, according to the report.
“While Spanier failed to disclose these acts, the board has a continuing obligation to require information about such an important matter,” Freeh wrote.
The report makes several recommendations for how the university could improve its reporting procedures, such as including more members who are not associated with the university, including training on oversight responsibilities in board orientation, requiring regular risk management reports to the board, and continuing to provide board members with regular media reports about the university.
Penn State’s board has already adopted several of the report’s recommendations, which it received in a preliminary briefing in January. It reorganized its committee structure, adding a committee on audit, risk, legal and compliance.
Chait and others said boards should have a compliance officer who reports directly to the board. He said he expects to see more colleges altering their organizational charts to have such an officer.
More important than having formal structures in place, said Ronald G. Ehrenberg, a Cornell professor and former administrator who serves on the State University of New York's governing board, is fostering a climate where presidents share potentially damaging information with board members. “What this report suggests is that, over a long period of time, the board never set up an environment where the president understood that he would be filling them in,” he said.
Part of that might be attributable to Spanier’s extended tenure as university president, which stretched more than 16 years by the time Sandusky was indicted in November 2011. Spanier was also a highly successful president in most respects, Chait, Ehrenberg, and others said. Spanier was highly successful as a fund-raiser, helped build up numerous academic programs, and was a national spokesman for higher education on numerous issues.
Ehrenberg said that even in a situation such as Penn State where the president is given significant latitude, the board should still be informed and curious about any issues that have the potential to affect the university’s long-term reputation – particularly financial, safety, and legal issues. “The president has to understand that when the board is pressing on issues, it’s not necessarily unhappy with the president, they’re just behaving in their proper fiduciary role,” Ehrenberg said.
The board might also have deferred too greatly to Baldwin, the university’s general counsel, since she was the former chair of the board.
Asking Better Questions
When the board did become aware of the grand jury investigation, the Freeh report said the board did not work hard enough to develop a better understanding of the magnitude of the investigation. “The trustees did not discuss whether the university should conduct an internal investigation to understand the facts and any potential liability issues, engaged experienced criminal counsel, or prepare for the possibility that the grand jury investigation might result in some criticism of the university or its staff,” the report states.
On March 31, 2011, Harrisburg’s The Patriot-News ran an article with the headline “Jerry Sandusky, Former Penn State Football Staffer, Subject of Grand Jury Investigation,” which reported that Sandusky was “the subject of a grand jury investigation into allegations that he indecently assaulted a teenage boy.” It also noted that Schultz, Curley, and Paterno were part of the investigation. This was about seven months before the indictments that immediately received nationwide attention.
The report notes that the article went virtually unnoticed by the board, aside from one trustee who e-mailed Spanier asking if the board would learn more about the investigation. Spanier replied that he wasn’t sure what aspects of a grand jury investigation he could disclose, according to the report.
“The board members who were aware of the article should have inquired further about Sandusky and the possible risks of litigation or public relations issues, and, most importantly, whether the university has effective policies in place to protect children on its campuses,” Freeh said in the report.
The board’s second chance to inquire about the situation came at its May 2011 meeting, when members heard a report from Spanier and Baldwin about the investigation. Accounts by administrators and trustees in the report about that meeting differ. Some trustees said they had the impression that the investigation was centered on the Second Mile, Sandusky’s charity organization, and others recalled hearing that it was the third or fourth time Sandusky was being investigated, which they took as an indication that charges were not likely. “A common perception was that this was not an ‘important’ issue for the university and the investigation was not a cause for concern,” the report states.
The report also states that “trustees generally recalled that members asked Baldwin or Spanier few questions about the investigation.” The trustees faulted Spanier and Baldwin for not informing them about the investigation in a more useful manner.
The Freeh report notes that despite how the grand jury investigation was portrayed by Spanier and Baldwin, the trustees should have recognized the magnitude of what they were hearing. “While Spanier and Baldwin’s May 2011 briefing to the board downplayed the nature of the grand jury investigation of Sandusky, the board members did not independently assess the information or demand detailed reporting from Spanier and Baldwin on this serious matter,” the report states.
After Spanier and Baldwin made trustees aware of the grand jury investigation on May 12, 2011, trustees had two meetings – on July 15 and September 9 – at which they did not ask questions of Spanier or other administrators about the grand jury investigation, according to the report.
“The board’s overconfidence in Spanier’s ability to deal with the crisis, and its complacent attitude left them unprepared to respond to the November 2011 criminal charges filed against two senior Penn State leaders and a former prominent coach,” the report states.