What Didn’t Work: Tongue-Tied at the Top
This did not please Grassley, who in March 2007 wrote another letter—this time lengthy and highly critical. He asked many detailed questions about what appeared to be an “anything goes” culture at the Smithsonian, which forced taxpayers to subsidize Small’s “champagne lifestyle.” Grassley also released the letter to The Washington Post, putting severe pressure on the regents to address the issues fully.
Realizing at last that they had a major governance issue on their hands, the regents took three decisive steps. First, they formed a special ad hoc governance committee to review the structure and processes of the board and to recommend changes.
Next, the regents created an independent committee, chaired by former U.S. Comptroller General Chuck Bowsher, to conduct a separate review of the crisis, as well as of the governance problems that led to its development. Finally, Regent Eli Broad phoned Small to suggest that the best way to avoid further damage to the institution was for Small to leave, and Small agreed. Small received no severance payment.
With these steps, the regents shifted their focus from the past to the future. Working apart from each other, the independent review committee and the governance committee reached very similar conclusions about how to improve governance at the Smithsonian. The committees’ recommendations included (1) full board review and approval of the secretary’s compensation; (2) periodic meetings of the full board without the secretary; (3) processes for regular communications between the regents and the CFO, chief legal officer, and inspector general; and (4) clear, appropriate policies for travel expenses.
The regents communicated these governance reforms to congress and the public. With these steps, and with a clear focus on the future, the regents were able to quell the public outcry over Small’s excesses, attract an excellent new secretary, and put the negative publicity behind them.