A blog touching on governance issues important for the open exchange of ideas between the business community and academia.

Missing From the Penn State Discussion

Mon, 2013-03-04 11:01

Missing From the Penn State Discussion

The recent governance headlines concerning the fallout from the inability of Penn State’s board to govern have focused on what the board knew or didn’t know and the lack of a process to assess and manage risk. As always, there is a great temptation in our culture to serve as judge, juror and key consultant to those who have stumbled and failed. Numerous articles, speeches, panel discussions and webinars from key thought leaders in the field of board governance continue to discuss what went wrong and what should be done to ensure that the same incident could not happen again.

Don’t get me wrong, the dialogue is welcomed and I believe will lead to a revolution of ideas that will have a massive impact on best practices acutely needed in today’s nonprofit boardrooms. However there is another discussion that is missing from the dialogue and that is the answer to the question that everyone in a public or private boardroom should consider which is not “Did anyone affiliated with our Company serve on the board of Penn State and if so what are we doing as a company to protect our brand?” but, “What guidance and oversight can we provide to our employees to ensure that their seat in a nonprofit boardroom is occupied with an individual who is informed and will advocate best practices for that nonprofits stakeholders.

First let me say, that on a personal level, what happened to the children on Penn State’s campus and their lack of a voice both during and after the incidents is appalling. And, it is critical that companies continue to encourage and commit that their employees invest their time to support and provide leadership on nonprofits boards. However, in light of this recent tragedy it is imperative that a company provide their employees with the tools to promote best practices in the nonprofit board room. A company’s current shareholders should have limited risk from the good works that the thought leadership of the company has engaged in. I suggest that the board and CEO consider the following measures to align their interest—possibly through the filter of the CSR Policy—to ensure that their employees and board members have the information and training they need to back best practices in the nonprofit boardroom they serve.

Make sure your employees know that serving on a nonprofit board is no different than serving on a public or private board. They have the same duty’s to the entity’s shareholders and key stakeholders to:

  • Duty of Loyalty, Duty of Care
  • Hire and fire the CEO
  • Provide Fiscal and fiduciary oversight
  • Provide Strategic oversight
  • Inventory what nonprofit boards your Board and employees serve on – While strategically it may benefit a company to have its CEO and “C” suite executives on nonprofit boards for networking, exposure and brand association and inventory would allow the company to reward those employees who give back to the community and encourage others to do so.
  • Compare your company’s strategic initiatives focusing on your CSR statement with where your Company’s thought leadership is invested and access the gaps and overlap.
  • Provide ongoing governance training for those employees currently serving or preparing for nonprofit board service.
  • Review existing policies regarding board service

It is critical that a company access the risk to their brand if the nonprofit board service of their board members or employees becomes damaging by balancing the importance of their employees to do so. I see the recent Penn State tragedy as a call for all of us to discard the past filter by which we assessed nonprofit board service with the same filter we use as shareholders, stakeholders and board members of the public sector.

About the Author

Headshot of Patricia Connolly
Patricia Connolly
Executive Director
Raj & Kamla Gupta Governance Institute

Patricia Q. Connolly is an executive with notable success guiding discussions on how to lead and govern in the 21st century. While supporting and contributing to multiple Boards of Directors, she has brought energy and transparency to the task of corporate governance. Ms. Connolly’s background is a rare blend of corporate and nonprofit leadership. Through her varied experience, she has gained unique perspective on the critical role that a Board of Directors has in steering an organization to success. Regarded as an influential thought leader, she guides companies through pivotal decisions and periods of major change.

During her early career, she advanced through a series of positions at financial services firm PNC Financial Corp. This culminated with her role as Group Vice President for the firm’s retail and private banking group. Here, she gained a firm grasp of the various principles that underpin the Corporate world. Ms. Connolly then applied her business acumen to the nonprofit sector, holding executive roles at prominent institutions such as the Philadelphia Museum of Art. She was able to infuse nonprofit operations with a new efficiency and cost-effectiveness that streamlined processes and positioned long-term success. Her contributions during this period included driving a 60% increase in annual donations to the country’s oldest natural history museum.

Since 2008, Ms. Connolly has served as Executive Director of Drexel University’s Raj & Kamla Gupta Governance Institute (formerly the Center for Corporate Governance). Although situated in the academic arena, she has been heavily involved with the for-profit sector while consulting various Boards of Directors. She established two new flagship programs that have strengthened the discourse and education on new corporate governance areas. She secured a $5 million naming endowment to ensure a sustainable, long-term future for the Institute. Ms. Connolly is presently engaged as Chairman of the Nominating & Governance Committee for a 1500-employee, 370-physician medical center.

Ms. Connolly holds an MA in History & History of Art from the University of Pennsylvania and a BA in History from Bryn Mawr College. She also received an AS in Finance from The Wharton School.

The Center’s research and programmatic efforts advocate for leading governance practices in the public and private sectors.

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Any opinions expressed here, except as specifically noted, are those of the individual authors or commenters and do not necessarily represent the views or policies of Drexel University.