Sixth Annual SEC Communicators Association Conference

Beyond XXX and 000:

Lessons Learned from Penn State

Texas A&M University June 9-11, 2013 #SECCA13

Presenter: Chad Tindol, University of Alabama System

Moderator: Steve Voorhies, University of Arkansas

Background Facts Re: Freeh Report

• Commissioned by Board after first 3 arrests

• Freeh is the retired director of the FBI

• Hotline, 1430 interviews, 3.5M documents

• 162 page narrative, 17 pp. of recommendations

• Cost – At least $8.1 Million

Three Stages of Reading Freeh Report

I. Public Reading

II. Initial Administrative Reading

III. Less Obvious Lessons

All of these are important.

I. The Public Focus of the Report

II. The Initial Administrative Reading

President Graham Spanier–Later Indicted

VP Gary Schultz– Indicted and Later Add’l Charges

AD Tim Curley– Indicted and Later Add’l Charges

NCAA President: “unprecedented failure of institutional integrity”

Administrators’ Criminal Charges

• Perjury

• Obstruction of justice

• Failure to report child abuse

• Endangering the welfare of children

• Criminal conspiracy

Some Obvious Administrative Lessons

• Report suspected child abuse or neglect.

• Don’t lie to the grand jury.

• Don’t hide records.

• These trials await

III. The Three Less Obvious Lessons of the Freeh Report

Intro to “Less Obvious” Lessons

• My theories on where Freeh Rpt. may go:

1. responsibility,

2. transparency, and

3. proactive leadership.

• Some good recommendations of Freeh

• Something’s still missing? David & Bathsheba

Less Obvious Lesson #1:The Understanding of “Responsibility”

Has Changed?

The Sinking of the “Mary Frances”

• Black Warrior River

• 1919

• “Motor Launch” offered

free rides

• News; crowds; picnics

So What Followed this Tragedy?

• Who did the federal investigation conclude was at fault?___________________________

• What did the courts do? _________________

• What happened to boat owner and captain? ________________

So What Followed this Tragedy?

• Who did the federal investigation conclude was at fault?

• The children!• What did the courts do?• Refused to even hear a case!• What happened to boat owner and captain? • Nothing, legally speaking!

Compare to 2012 Freeh Report . . .

• $8.1 Million investigation

• 4 criminal defendants

• NCAA

• Multiple lawsuits

Those Blamed in the Freeh Report:

• “The most saddening finding by the Special Investigative Counsel is the total and consistent disregard by the most senior leaders at Penn State for the safety and welfare of Sandusky’s child victims.”

Is this “Heightened” University Responsibility limited to children?

Not on campus?•Copyright •Emergency messages

Not in the community?•Natural disasters

Possible Reading #1

• The understanding of “responsibility” is shifting and expanding.

• Especially for institutions?

• “Not my job” is not the same defense it was.

• And, “not my job” is not a message that rings true to our constituents.

Less Obvious Lesson #2:Lack of Transparency Now Stands as its

Own Wrong?

An Overly Simplistic Timeline

Crime Gets You in Trouble

Cover-up is Worse Than the Crime

Now, is a Cover-up even a necessary component of the

wrong?

Some Freeh Report Blame:

President•“discouraged discussion and dissent”

•“not promptly and fully advising the Board”

Board of Trustees•“failed. . . duties to oversee”

•“not inquiring”

•“not creating . . . environment where senior . . . officials felt accountable”

Possible Reading #2

• It’s not just the crime.

• It’s not just the cover-up.

• It’s more – Failing to encourage discussion? Failing to let others people know of suspicions? Failing to advise up the chain?

• Transparency

Less Obvious Lesson #3:“Leadership Demands Increased Proactive Steps? (Freeh’s Cure?)”

A Traditional Understanding of Wrongdoing

• Duty - reasonable efforts

• Avoid foreseeable harms

• That may cause injury to

others

Compare that to failings Freeh found:

• No policy on child protection

• No policy on Clery

• Insufficient background checks

• Insufficient training

Did those failings cause the molestation?

Freeh’s Findings:•No child protection policy/training

•No Clery policy

•No background checks

Causation?Would Sandusky care?

Clery involves crime reports. 1998 was reported

“3-4% of molesters have criminal backgrounds”

“spinning your wheels”?

Possible Reading #3

• Does causation play the role it once did?

• New expectation of more proactive leadership

• Need policies, training & checks

IV. But, will Freeh’s prescriptions fix the problem?

One can easily underestimate the impact of this New Post-Freeh World

Too simplistic fixes?•More committees•More policies•More training sessions

Do these answer need for?•Heightened responsibility•Lack of transparency•Proactive leadership

“Bathsheba Syndrome”

• The Bathsheba Syndrome: The Ethical Failure of Successful Leaders

• Journal of Business Ethics

• Easy to Google

Who Was David?

• Important in Judaism, Christianity, & Islam

• As child – shepherd & defeated Goliath

• As king – soldier, psalmist

• As father – Absalom & Solomon

• As an object of art – Michelangelo & Richard Gere

Who Was Bathsheba?

• Daughter of one of David’s chief advisors

• Wife of one of David’s generals

• Mother of Solomon

• Played by Susan Heyward, Alice Krige, Jane Seymour

• Painted by Rembrandt & Veronese

A Davidic Failing . . .

• David “spies” Bathsheba bathing

• David sleeps with her – Pregnant

• David tries to cover up the crime

What Would Louis Freeh Say about this?

All the Elements:•Heightened Responsibility•Lack of Transparency•Failure of Leadership

But:•Would policies have done anything?•Would committees have done anything?•This was the King.

Conclusions of the “Bathsheba Syndrome”

• Authors assert we delude ourselves that ethical failure results only from lack of knowledge of standards or competitive pressures.

• Some leaders (e.g., King David) ethically fail because of success

The Defendants?

Successful? Certainly knew the law? Needed a committee? Competitive pressure?

How Does Success Cause Ethical Failure?

• Temptations increase

• Complacency or lost focus

• Privileged access to people, info or resources

• Unrestrained control

• Begins to think he can control outcomes

When was article written?

1000 BC 1996-97 2012

1993

Some Conclusions

Freeh’s Modern Responsibilities:•Institutional responsibility

•Transparency

•Proactive leadership

Ancient Problems:•Won’t be easy to fix with training and committees

•Oversight and effort to fight complacency & temptation

•Do we all need a Nathan?

•Are you Nathan?

"Give the best you have, and it will never be enough. Give your best anyway."

-Mother Teresa