Jay Paterno is an alumni-elected member of the Penn State Board of Trustees and a regular columnist for StateCollege.com.
Being a member of the Penn State Board of Trustees is an honor for anyone that loves this university. But that honor comes with an immense responsibility of service. As the governing body of Penn State we’re entrusted with billions of dollars from state appropriations, government grants, student loans and tuition from the pockets of students and working families across the Commonwealth and the nation.
There are vital issues that require us to get “woke” to be willing to take a stand.
On Friday, this board faces a moment of truth. We can stand to defend that trust or beat a retreat leaving current and future boards in a weakened position to honor that trust of resources and taxpayer dollars. Friday we will be asked to vote on a big change to our charter and bylaws.
This is an existential moment, akin to shifting the Constitutional balance of power with a simple majority vote. So what’s it all about?
Currently volunteer board members denied vital information by the administration may have to sue for access. It would seem simple that a trustee should have access to all relevant information to protect the university. The proposed change would mean trustees bringing legal action against the university or the administration would no longer be indemnified by the school.
It breaks down like this:
1. A trustee requests vital information or documents he or she is entitled to in order to perform his or her fiduciary duty.
2. The administration denies access to documents or information.
3. The trustee is forced to resort to litigation to obtain access.
4. Currently the trustee can be reimbursed by the university for legal fees required for the trustee to perform his or her job.
5. Under the proposed change the university would no longer pays those fees.
Why is this a big deal?
Access to all relevant information is one of the most important parts of the governing structure. When faced with critical decisions and votes involving billions of dollars the administration presents us with lots of information. But if we suspect that information is slanted in a way to influence an outcome, don’t we have an obligation to challenge it? Giving away the power to get information and see the whole picture is a dangerous shift.
The argument for changing the charter is to keep the university from wasting resources on legal fees for trustees who sue the university. That argument rings hollow. In the only known case of trustees suing for access, the Penn State administration could have avoided seven figures in fees fighting in court by simply turning over the requested documents without litigation.
That case involved trustees seeking to perform their fiduciary responsibility in a matter involving more than $250 million (and counting) in financial costs and untold billions in reputational damage to this university and others. Their legal victory allowed trustees to see correspondence and information behind a series of decisions made by the administration over the past six years.
Certainly current personalities involved perhaps create some distrust around this charter vote. But all of us as trustees must rise above current or personal motives and look beyond the present. This vote is one for the ages as this change alters the balance of power and gives away crucial board leverage to exercise proper oversight over future administrations.
Unlike the federal government the trustees are not like Congress sharing power with the president as the executive and the office of legal counsel as the judiciary as separate but equal branches.
Governance flows from the trustees, who must protect the interests of the university and all Penn State stakeholders against the changing winds of any particular time or set of people. The administration reports to the board and any attempt to alter that balance is a dangerous precedent.
Above all, changing this charter is a retreat from responsibility just a few years after this board was widely criticized for a lack of oversight. This change empowers this or future administrations to withhold information. Litigation would still be possible for any trustee but it would involve personal financial risk. Only the wealthiest trustees might have the resources to take on a multi-billion dollar university in court. It becomes the domain of the haves over the have nots.
The recent legal action won by board members has given trustees access to documents and information revealing details of issues well beyond that case. Documents give us details of claims made against the university, the true costs of legal settlements, disclosure of finances and details of multi-million dollar contracts. That win was a clear victory for responsible oversight.
Our ability to exercise the full power of oversight must not be voted backwards.
In our hands this university holds the destiny of our students. The board is entrusted to make sure that their investment is managed wisely. Just one voice challenging the assumptions of the majority can change history if given all the information needed to make the case.
Perhaps board leadership and the university administration have already lined up the votes. But maybe there is hope that open minds can see past the horizons of today to do what is right for the future of the board, the university and the next generation of Penn Staters who trust us to do the right thing now.