Editorial: Tighten rules for moonlighting UC officials

For reasons which should have been obvious, it was inappropriate for UC Davis Chancellor Linda Katehi to accept a $70,000-a-year appointment to the board of directors of DeVry Education Group, a for-profit school that was under federal investigation for duping students about their job and income prospects. For this and other possible violations of university policy, Katehi is on administrative leave.

But another one of her paid gigs — with the textbook company John Wiley & Sons — has raised questions as well. What is the chancellor of a public university doing working for a company that profits from selling textbooks to students? Doesn’t that raise, at the very least, a perception of a conflict of interest that could harm the university’s reputation? How does UC Davis benefit from having Katehi on that particular board (for which she earned $420,000 over three years, according to the Sacramento Bee)?

Sitting on the textbook company’s board did not violate university policy, but it should have. The UC Board of Regents has a chance to fix this flaw Thursday when it considers adopting stricter rules for top university officials sitting on outside boards.

UC President Janet Napolitano is recommending a revised policy that would reduce the number of allowed compensated board seats from three to two and require an extra layer of approval so that the president or other top university officials would not be blindsided by a chancellor or other top official’s extracurricular activities. The official seeking permission to sit on a board, whether paid or not, would also have to explain how doing so would benefit the university.

Napolitano’s suggestions are fine, as far as they go, but they don’t fully address two big concerns. One is that when a senior UC administrator takes a second job, that takes time away from the important full-time responsibility of running a university. Merely going down from three boards to two may not solve the problem.

The other concern is that board positions may directly conflict with the interests of the public. The rules should explicitly forbid top officials from getting paid to sit on boards of companies that do business with the university. Even if there is no immediate conflict (Katehi, for example, didn’t make decisions on the purchase of textbooks), how can the public completely trust the motives of a university official who is receiving a paycheck or stock options from a company that profits from the UCs?

Also, the rules must apply to all senior managers, not just those hired in the future.

Some critics wonder whether UC chancellors or other top university officials ought to sit on compensated boards at all. Their full-time, taxpayer-paid jobs at the university are demanding enough, and they are well paid for them (Katehi, for instance, earned $424,360 per year as chancellor). Do chancellors really need an extra $12,500 or $30,000 or even $100,000 a year? Maybe not, but Napolitano maintains that board positions — paid or not — can benefit the university by helping create relationships with business and professional leaders that can lead to financial support, partnerships and affiliations. Also, she says, the time commitment will be weighed when approval for a outside job is requested.

It is true that there is a potential benefit to the UCs in having its top officials exposed to business leaders and philanthropists. In fact, many UC senior officials are quite accomplished or renowned in their respective fields, and have much knowledge to offer to corporations and nonprofits. It would be foolish to cut them off completely when there’s no conflict.

But there must a clear line when it comes to potential — or even perceived — conflict. Without that, a new policy would be little more than window dressing.

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