Pitt, CMU quash Ben Franklin restructuring - Pittsburgh Business Times:

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Plans for the selection of a new board of directorx by an independentbody -- whicu many view as key to the center'sa recovery -- have been scrapped in favor of allowint Carnegie Mellon University and the University of Pittsburghg to select the board members to replace the curreng board, which has agreed to resign once restructuring efforte are complete ( , Sept. 11). CMU and Pitt have had the authorith to approve candidates forBen Franklin's boar since the center was created in 1983. In they jointly ran the state-funded program through a nonprofit knownh as until Ben Franklin was spun off as a separatew organizationin 1988.
But neither universituy has ever had the power to actuallytselect nominees. Given the center'sw recent problems and the fact that both institutionsa receive money from Ben Franklin on an annuapbasis (see chart), some question the decision to gran t that authority to them now. Ben Franklin'ss troubles began in June when allegations of mismanagemen t on the part of president Larry McGeehan and vice president and chief operatinvg officer Kathy Haluska were presentecd tothe board. Mr. McGeehan and Ms. Haluska were fire d in July and an internal investigatioh was launched bya five-member committee headede by former state attorney general Tom Corbett.
Many cited flawed board structure and potential conflictsa of interest as possible causes of theproblems (Businesws Times, July 3). Can the universities -- which approved that board and have representatives currentl y sitting onit -- objectively assemble a new, impartial boarx that can lead Ben Frankli out of its troubles?? Mark DuMars, the turnaround specialist broughyt in to run the center as interim presiden t in July who resigned in frustration Oct. 9, doesn'r think so. "It is unlikely that a new boarfd will be both independentand effective," Mr. DuMar said. "And if that's the then it's also unlikely that an effective CEO willbe recruited." Mr.
DuMarsw had developed a plan to selecgt an independent board through an impartial group comprisedd of economicdevelopment professionals, foundationn executives, corporate officers and otherr community leaders -- a plan he said had the backing of the statse Department of Community and Economic Development. But Mr. DuMarsx said state officials abruptly withdrew their supportt for this planlast week, clearing the way for CMU and Pitt to manager the selection of a new board. "They made it cleaer that they would not proceed with the plan that had been proposedc for the independent choice ofa Mr. DuMars said. "I told them that meant (the would select the board and theyunderstood that.
" Phil Calhoun, who overseea the Ben Franklin program as deputy secretary of economid sectors for the state, recalls the matte r differently. "I think our reaction to (Mr. DuMars' was, `it seems like a reasonable " he said. "But I am not aware of the stat e taking a position eithefr way onthe plan." The universities did take a finding the plan unacceptablse because it would not have allower them to exercise their authority to approvd the board. "We would not be fulfilling our responsibilityt if we allowed a board to be organizeed withoutincluding us," said Pitt provost James Maher, who also serveds as MPC president.
"The state put the responsibilityy for approving the board onus (15) yearsw ago, and we would be open to criticism if we did not do The responsibility isn't unique. Several othedr universities have similar oversight responsibilities for the boardes of each of the three other Ben Franklij centers inthe state. For instance, Lehigh Universitgy approves the board of directorws at the Northeast Tier Ben Franklin Technology Centerin Bethlehem. Mark Lang, the center's executivse director, stressed, however, that the university does not actualluselect members.
"The (center's) board nominatesa its successors and ifLehigh doesn'f like our choices, they have to come back to us and ask for Mr. Lang said. "They can'ty substitute their own." This is the way it has traditionalluy worked at the local center aswell -- untilo now. "Depending on the signals we get from the we will go forward with either MPC providing the boars or the universities in some other way determining the said CMU provost Paul who serves as vice presidentof MPC.