An outdated board structure is left intact, but it will no longer rely exclusively on the general secretary for its information. The door closes on outside board seats for Smithsonian staff, some operating and personnel policies are updated, but a lot more is left for further study and future resolution.
The Washington Post (Jacqueline Trescott and James V. Grimaldi) reported on the release of the report by the governance committee of the Smithsonian Institution (EIN 53-0206027 Form 990), set up in April to consider changes after the resignation of Lawrence Small. The Smithsonian also published the 55-page report on its web site.
On the eve of the report release, Smithsonian deputy secretary Sheila R. Burke turned in her resignation. In her seven years on the job, Ms. Burke sat on a number of outside boards, for-profit and nonprofit, collecting $1.2 million in addition to her Smithsonian salary of $353,429. One of the new policies recommended by the governance report was to disallow outside board memberships for senior staff.
What the report didn't recommend was an overhauling of the Smithsonian board structure. As you might recall, the American Red Cross made board reform the centerpiece of its recent restructuring. The Smithsonian board by law currently consists of seventeen members, nine from the public, three Senators, three Representatives, the Vice-President, and the Chief Justice of the Supreme Court as chancellor. Perhaps that made sense in an era when Washington, DC was a sleepy Southern town and Congress wasn't continually in session. But today, the large number of ex-officio positions filled by legislators short changes the organization, which could use a broader base of board members with more specific experience and interest in museums.
The major change recommended in the board structure is to separate the roles of chancellor and chairman of the board, both of which have traditionally been the responsibility of the chief justice (recommendation 3). Under the new plan, the chief justice will be the chancellor, presiding over meetings and representing the organization at formal occasions. But the chairman of the board will handle day to day oversight responsibilities. This will be accomplished with a by-laws change.
A rather surprising recommendation is that the regents will hold no less than four meetings a year, including an executive session without staff present, including minutes for all meetings including the executive sessions (recommendation 4). The surprise here is that a group with representatives at this level of responsibility has to specify the keeping of minutes and that apparently they were not doing so previously.
In the area of executive compensation, there is a commitment to come up with a process and a recommended compensation package for the next general secretary (recommendation 7). This is a fairly vague statement of goals, which calls attention to the absence of professional human resources advice and counsel to this board. The Smithsonian board is hardly alone in this: most nonprofit boards need professional HR support, particularly in negotiating with a new chief, but few realize that they need it.
The biggest change in board-staff relations will be that four staff, the general secretary, chief financial officer, general counsel, and inspector general, all will have direct access to the board (recommendations 10-12). This ends the situation where the general secretary alone was providing the board with information.
Recommendations from 14 onward deal with specific policies and procedures, which reads like the results of a brainstorming session about ways to be more transparent, including applying freedom of information act policies about disclosure of internal documents and considering whether to create an ombudsman position. As one might expect, Smithsonian Business Ventures is explicitly brought under all existing Smithsonian policies.
In among these, in recommendation 19, is one about leave accrual, directing that all employees transition to a leave accrual system like that of the federal government. The note on page A-24 explains that certain senior staff were exempted from the leave system, meaning that they did not accrue leave nor did they record leave taken, which was an issue because of the amount of time some senior staff spent participating in outside boards. On page A-12 we learn that the Smithsonian trustees were not aware of this practice. Going forward, all senior staff will have 26 days of annual leave.
Taken together, these recommendations are not the comprehensive reform that the American Red Cross undertook. If the Smithsonian wants real reform and adequate oversight, it should open up all board positions to outside appointments and perhaps even expand the board to twenty to twenty-five members.