Friday, November 30

The Difficulty of Being Karen Peetz

by SMSS FREEHdom Fighter

Wonder Woman or Marionette?

Joining the Penn State Board of Trustees 2 years ago as a Business & Industry peer, Karen is now chairing the embattled board. Not elected by her peers, she heroically volunteered she says.  An honor no doubt to chair, but then there’s her day job at Bank of New York Mellon Corp.

And therein lies the difficulty of Being Karen Peetz.

Is she Wonder Woman?

Peetz as a Vice Chairman at BNY Mellon runs a group that employs some 10,000 people worldwide, accounts for about one-third of BNY Mellon’s roughly $13 billion annual revenue. She travels monthly to one of 40 offices worldwide.  Karen has played a role in work with the Treasury and the Fed, and is boasting of assignments with “some very large governments outside of the U.S.”

Yet BNY remains the subject of several lawsuits and regulatory probes over its foreign exchange dealings.  BNY’s stock price is down almost 50 percent, and its shares remain close to their 2008 lows amid the financial crisis.  A crushing effort to right this listing ship.

In another committed undertaking of precious personal time and travel, she continues to chair the banks’ Women’s Initiatives Network.  Karen sits on the company’s Diversity & Inclusion Council.  Recently she was appointed as a Trustee at the Brooklyn Academy of Music and also sits on the Board of Directors for SIFMA (Securities Information & Financial Markets Association), and PEFCO (Private Export Funding Corp).

Truly a staggering work load & travel itinerary for anyone, let alone one also chairing the Board of a $4 Billion flagship academic institution of the Commonwealth of Pennsylvania, one that has seen a tumultuous past 12 months.

The question for BNY Mellon’s own board, let alone Penn State is to consider whether she’s stretched herself too thin.  Simple physics alone predict that something has to snap in the threads of Karen’s commitments & responsibilities.  She is one of the first female Vice Chairs in the company’s history & the Most Powerful Woman in Banking, but for how long?

Surely the tiara and indestructible bracelets are tarnishing, that corset pinching & suffocating, those boots giving her blisters.

And therein lies the difficulty of Being Karen Peetz

Of particular interest now is her seat on Suncoke Energy. 

Is she a Marionette?

John Surma was on the BNYM Board of Directors until he abruptly resigned in April 2012. As Karen is an Executive, she reported to that same Board on which Surma once sat. Let’s connect the dots: Suncoke Energy is a player in the steel making process. US Steel (with John Surma as the Chairman and CEO) is a major customer of Suncoke’s product.  It is reasonable to conclude that John Surma has a huge amount of influence over Karen Peetz, both in the business world, and sitting on the Penn State Board of Trustees.

Even Karen’s advice on her ambition “to evaluate whom you work for” and “follow the money”…“It is critical to select sponsors that have power and create opportunities for you”, is very telling on their particular relationship.

Karen already had conflict of interest with a Penn State land sale to Toll Brothers, a luxury homebuilder, that BNYM’s asset management unit is a major shareholder.  Meeting minutes reveal no discussion about BNYM’s interest in Toll Brothers stock.  Karen should have recused herself from any and all discussions on Toll Bros, as she is a member of the Committee on Finance, Business & Capital Planning.  

Corporate governance experts say Karen’s exhaustive, involved, dual role presents a both a risk to BNYM and Penn State.  For her to do a poor job is probably the worst of all possible worlds.

How long will she dance for the manipulator? Will he eventually tire of using Karen as the public face of the Board and simply put her done behind the curtain?

And therein lies the difficulty of Being Karen Peetz.

Is she tangled up in Wonder Woman’s “Lasso of Truth” or by the Marionette Strings controlled by Surma?

She freely admits that the board failed spectacularly in its oversight responsibilities.  She acknowledges that each board member should “evaluate our individual paths forward”.  Karen has mused: “part of being a leader at that level is to be a risk manager and to think through what might happen”.

Karen has already shown signs of backpedaling and spin doctoring. She states the Board has never formally accepted the $6.5 million Freeh Report.  We are told they commissioned the report for the recommendations only. Not all the 119 Freeh recommendations will necessarily be implemented Karen tells us; rather they are to be used as “guidelines” that don’t need to be strictly followed.  Fellow Trustee Ken Frazier concurs by stating, “we’re following the spirit here, not the letter”.  Trustee Mark Dambly reaffirms the removal the original intended purpose of the Freeh Report as well. 

In a press conference following the Nov 16th BoT meeting, Karen said the board would look into the existence of the Freeh contract documents. She said she did not have much information in this area because she “wasn’t directly responsible for hiring him”.

“It was not something the board signed on,” she said.

Pray tell us Karen, who did?

Karen continues to baffle, bamboozle & bemuse

"The first thing I want to say to the entire Penn State community is that we have been through a very difficult experience together. We have tried to do the right thing,"
"All of us, including the board, with the wisdom of hindsight could have done things differently."
"The first is change, the second is reform and the third is transparency."

"I and other members of the board will begin holding similar town hall meetings with students, faculty, and alumni later in the year. The more we learn, the more we can communicate our thoughts, the better.”

"I don't recall us promising an alumni tour," "when I said listening tour, I wasn't thinking going out to the different groups of alumni."

"Our alumni are one of Penn State's most valuable assets. As such, it is critically important for key members of the Board to meet and interact with alumni leadership."

"I think, unfortunately, there will always be people who are skeptical about what we say or how we say it. We're just telling it like it is."

“It’s time for the music to stop”.

"By the time someone gets here in 2014, it will be just a distant memory," Peetz said.

And the most priceless quote of all:

Oh Really?

And therein lies the difficulty of Being Karen Peetz

1 comment:

  1. The CLARITY of the Freeh Report shows Joe's 61 years of excellent service is now marred?! Gee, how would she know, she didn't read the Freeh Report. That explains it. Yes, we are skeptical of anything you say, Karen. You talk out of your a$$ and we can smell BS a mile away. Give us an early Christmas present and resign from the BoT.