Upon Further Review: BOT didn't vote to fire Paterno on 11/9/11

Contrary to the BOT's announcement, media reports and Baldwin's termination letter, the PSU BOT didn't actually fire Joe Paterno & Graham Spanier on 11/9/11

By

Ray Blehar

Surma:  Announced firings even
though no official vote was taken. 

On the night of November 9, 2011, PSU BOT co-chair John P. Surma informed the public of the Penn State Board of Trustees' decisions to remove Joe Paterno and Graham Spanier from their positions as head football coach and President of the University, respectively.  Both men's termination was effective November 9, 2011.

Also at the meeting, Surma announced the decisions that Rodney Erickson would serve as interim President effective November 9, 2011.

These facts appear to be indisputable and were documented in the minutes of the November 11, 2011 PSU BOT meeting.

After the announcements, Board Co-Chair John P. Surma participated in a question and answer session in which he explained the process and rationales used in the Board's decision making process.  Cutting to the chase, Surma's remarks gave all the impression that the board had deliberated on the personnel decisions and voted on the actions (Source: CNN):

SURMA: The board deliberative process is, as it implies, a process that requires some time. There was information that we sought, although we don't know anything more about the actual details than the grand jury report and whatever you all write.

We were working through the not entirely consistent processes of wanting to act swiftly and decisively, but also to be thorough and fair. And that resulted in these actions tonight. 

Surma's remarks and meeting minutes of November 11, 2011 both confirm that decisions were made to terminate Joe Paterno, effective November 9, 2011.  In addition, on November 15, 2011, then PSU General Counsel, Cynthia Baldwin wrote a termination letter stating that Paterno was terminated effective November 11, 2011, which was the meeting at which the actions of November 9, 2011 were documented in the minutes. 

From the moment of the termination, the public, including Penn State alumni, were under the impression that the Board had deliberated and voted to terminate Spanier and Paterno. 

That was not the case.  

Clemons: No vote taken
on the firing of Paterno

The decisions made on 11/9/11 did not result from a vote of the Board. That vote didn't happen until December 2, 2011.  This news report and video, the Executive Committee meeting minutes of December 2, 2011, trustee Al Clemens, and trustees who were interviewed by the New York Times in January 2012 provide the supporting evidence.

Clemens recalled : "After barely even any discussion of the matter, he says that the motion to fire Paterno was put on the table and, since no one verbalized an objection to it, the proposition was considered “passed.” 

In addition, Clemens was  upset that some board members had much more advanced notice/information about what was going on than others -- Clemens being in the latter group.

According to trustees interviewed by the Times recollection was the same as Clemens:

 "Surma, those present recalled, surveyed the other trustees — there are 32 — for their opinions and emotions before asking one last question: “Does anyone have any objections? If you have an objection, we’re open to it.”

No one in the room spoke. There was silence from the phone speakers." 

In other words, there was a total "abstention" of voting.  It was neither a unanimous vote of "yays" nor "nays."  It was indeed a travesty for Surma to announce a decision based on a unanimous abstention.

However it doesn't end there.

On March 12, 2012, after months of deliberations and consulting by PR flack Lanny Davis, Penn State and the BOT  finally made the official announcement of the reasons for firing Paterno and Spanier on November 9th.  That statement contained the falsehood that the board had reached a unanimous decision. 

"The Pennsylvania State University Board of Trustees has been asked by members of the Penn State community, including students, faculty, staff and alumni, to state clearly its reasons for the difficult decisions that were made unanimously on the evening of Nov. 9, 2011 -- to remove Graham Spanier as president of the University and Joe Paterno as head football coach for the remaining three games of the 2011 season. Our decisions were guided by our obligation as Trustees, always, to put the interests of the University first."

Under the Standing Orders of the Board of Trustees in effect at the time (revised May 13, 2011), the decisions of 11/9/11, which brought considerable damage to the University's image and reputation and resulted in tremendous financial costs, did not result from a valid process.  As such, the Board members failed to execute those decisions consistent with their "Expectations of Membership."  

The 11/9/11 members violated Standing Order IX. (1) (f) 4 and 6. because supporting materials and information were not provided to all board members and the decisions made were not reached as a Board, respectively.  

ORDER IX. GOVERNANCE OF THE UNIVERSITY 

(1) Role of the Board of Trustees in University Governance

(f) Expectations of Membership. In exercising the responsibilities of trusteeship, the Board of Trustees is guided by the expectations of membership, each of which is equally important:

1. Understand and support the University's mission, vision, and values

2. Act in good faith at all times and in the best interests of the University in a non-partisan manner

3. Make the University a top philanthropic priority to the very best of one's personal ability
4. Prepare diligently, attend faithfully, and participate constructively in all Board meetings and related activities by reading the agenda and supporting materials.

5. Speak openly within the Board and publicly support decisions reached by the Board

6. Make decisions and instruct the administration as a Board, not as individuals

7. Participate regularly in events that are integral parts of the life of the University community

8. Disclose promptly and fully any potential or actual conflicts of interest, and personally maintain exemplary ethical standards

9. Refrain from requests of the president or staff for special consideration or personal prerogatives, including admissions, employment, and contracts for business

10. Maintain confidentiality without exception

11. Advocate the University's interests, but speak for the Board or the University only when authorized to do so by the Board or the Chair

12. Respect established channels to acquire information or open communication with constituents

13. Extend goodwill to one another and to all members of the University community.

Surma: Led faction of BOT members who
"crammed down" firing of Joe Paterno

Without a vote according to Roberts Rules of Order,  (i.e., motion, second of the motion, and calls for supporting/opposing votes)  the decisions of 11/9/11 should be considered those of a few individuals.  The Board realized its mistake in not following the Rules, thus they conducted the actual vote (i.e., a "do over") to fire Paterno and Spanier on December 2, 2011.  Rather than call it what it was, the Executive Committee referred to it as a vote to "reaffirm and ratify" the Board's Nov. 9th decisions.

Even though Board decisions were presented as unanimous, press reports and other information revealed the Board members were split on the decision to terminate Paterno and Spanier.  

There was also a failure of those who opposed termination on 11/9/11, who should have insisted that a vote be taken before any decisions were presented as Board decisions.

These failures are a breach of fiduciary responsibility in accordance with Section 8.07 of the PSU BOT By-Laws.

The entire 11/9/11 Board failed to uphold their fiduciary responsibilities in permitting a public announcement of decisions that were not reached by a valid process under the Standing Orders.  Then after the decision, the Board was untruthful in saying the vote (that didn't happen) was unanimous.

The impact of this decision in financial terms was put at $177 million in November 2013.  The decision has also impacted revenues related to charitable donations, merchandising, and football ticket sales (details here).  The damage to Penn State's image and reputation was even worse.

Firing was the result larger, overriding governance issue

Former Board members Bob Horst and Ben Novak have written about the history of the BOT and both concluded that all decision making power is vested in a small group of individuals. 

Horst, who served on the BOT from 1992 to 1995, contended:

"The way the board really seems to work is that the board chair or vice chair (or both) emanate from the “industry trustee” group. There are six industry trustees in total. In my time, they formed the de facto executive committee along with elected officers. The rest of the board just approved what they put forward."

Novak, who served from 1998 to 2000, contends the decision making power is vested in a group smaller than the full Executive Committee.  To wit:

"The Power Group is a self-selected group of the wealthiest and most powerful members of the Board consisting of from three to five Trustees who consider themselves the real Board. They hire and fire the president; set the salaries of the top administrators (and their retirement packages and benefits); meet or talk with the president frequently; fly around in the president’s jet; attend meetings around the country on behalf of the University; and approve of all the policies the president sets. They do this with little or no input from the majority of Trustees.

While the president of the University is a member of this group, he remains president only so long as this group considers him one of them. Indeed, there is almost no distinction between this first group and the administration itself."

The evidence from 11/9/11 forward appears to support both Horst's and Novak's analyses.

1.  The firing of Paterno and Spanier was not voted on by the full board on 11/9/11. A few trustees led by John Surma "crammed down" the decision to fire JVP.  On December 2nd, 2011, the Executive Committee voted to fire Paterno and Spanier.

2.  The Freeh Report was not voted on by the full board.  Instead, Karen Peetz, Kenneth Frazier, and Rodney Erickson accepted the report's findings and recommendations.  Make no mistake, when Peetz and Frazier "accepted responsibility" for the failures cited in the report that was an admission of acceptance.

3.  The NCAA Consent Decree was not voted on by the full board. Instead, it was discussed between Erickson and a few other (unnamed) trustees.

In conclusion, the most consequential - and disastrous - decisions affecting PSU have been made by a small group of trustees and/or the Executive Committee.  As a result, it is easy to identify the governance problem at PSU -- and it has nothing to do with the structure of the BOT.

As Jim Collins wrote in Good to Great, the most important decision a leader can make is who is on his leadership team:

“Get the right people on the bus, the wrong people off the bus, and the right people in the right seats.”

It's time for President Barron to tell Dambly, Eckel, Frazier, Hintz, Huber, Masser, Peetz, Shaffer, and Silvis to get off the bus.


Note: Trustee Al Clemons demonstrated the type of character we expect from our trustees when resigned and admitted the mistakes of the BOT in firing of Paterno and the BOT's tacit acceptance of the Freeh Report.