Chairman Peetz Remarks - September 14, 2012 Board of Trustees Meeting

Good afternoon everyone.

It is good to see our campuses, here in State College and throughout the Commonwealth, are once again abuzz with the activity we are all dedicated to… educating students... 

As I noted in my report at the last Trustees’ meeting, much enthusiasm, optimism and pride are in evidence. 

Our common theme, our rallying cry, “We Are Penn State” is in the hearts and minds of our students once again as they focus on their university life.

One instance of such pride and enthusiasm is especially worth noting.   It illustrates what is meant, when we all say, “We Are Penn State.”  

It applies to our communities, our loyal and hardworking staff, and the citizens of the great Commonwealth of Pennsylvania.

How would you like to celebrate your 106th birthday?  Yes, I said one-oh-six.  Ruth Dreibelbis chose to celebrate her birthday with her Penn State family at Beaver Stadium on Saturday, September First. 

A resident of Centre County going back to before our entry into World War I --- 1915 to be exact --- Ruth worked at Penn State, handling our switchboard for decades. She was even on a first name basis with some fellow named “Ike,” who called regularly to chat with his brother. 

Well, that “Ike” she spoke to is who we all know as President Dwight Eisenhower.   And the brother she was connecting him to was our own Penn State president, Milton Eisenhower, for those President-to-president, brother-to-brother calls. 

Sort of makes you wonder who was asking who for advice, doesn’t it? 

Ruth is a member of our local community, she is staff, and she is a fan.  She is living testament to the type of loyalty Penn State engenders, the commitment we possess, and the type of heritage we build. 

Clearly, we value our heritage.  Better said more personally, we cherish our Penn State heritage.

And what builds heritage over the decades is attention to and dedicated focus on our mission of educating the best our country has to offer… a constant drive to do better than yesterday, act decisively in the present while we anticipate and prepare for the brightest of futures.

And we, Penn State, are now doing just that.

To start, we are refocusing our philosophy of how we act as a Board, Administration, and a University, entering a new era of better, more representative and transparent governance. 

As I explained in my remarks three weeks ago, transparency is only the first step in improved corporate governance. In the coming months, I will be engaging the board in further discussions on other aspects of this important issue.

These discussions will focus on such issues as aligning the board with all its constituents, current trends and thinking, as well as overall best practices.

We’ve added faculty, staff, students and alumni as non-voting members to almost all Board committees, increasing representation from the University community across the spectrum. 

Importantly, we replaced a scant three Board committees with seven action-focused committees that meet more frequently to better conduct the important work of this great institution. 

These working groups, historically and importantly focused on the academic and student life of our university, now add critical dedicated resources to such areas as audit and risk management, governance, human resources and long-range planning. 

And --- in line with the necessity of expanding and reinforcing our strongly held belief that “We Are Penn State,” --- we now have a dedicated outreach, development and community relations committee.

Further, and as you know, our Trustee and committee meetings are public, and we’ve added a question and answer period to each full Board meeting.  Today will be our first public comment session; and we welcome your ideas, thoughts and comments.

While we are moving forward on many fronts, as I said at our last meeting, we accept the consequences of failure and we are remedying any wrongs. 

We have implemented virtually all of Judge Freeh’s interim recommendations, and have now assigned review of the final recommendations to various joint University and Board committees. 

Evaluation and implementation of these recommendations is a complex effort that must be approached with resolve --- and thoughtfulness. 

The Board is committed to completing implementation of the Freeh recommendations by the end of next year or, in instances where implementation is not appropriate, providing the reasons why not.

President Erickson and I, as well as many other university leaders and representatives, have met with Senator George Mitchell, Penn State’s appointed Athletics Integrity Monitor, and other members of his team, and the University is making progress towards the requirements.”

In regards to these NCAA actions…I ask you to read, and consider, the seven very important – and cogent – points President Erickson made in his report to the Trustees at our August 12 meeting regarding the acceptance of the NCAA sanctions.  Those minutes, word-for-word, are posted on our website. 

President Erickson presented compelling evidence of the necessity of the action he took in regards to those sanctions. 

You may choose to disagree with his decision, but I don’t believe you can discount the thoughtful analysis he made --- and presents --- prior to making that decision. 

There is no doubt in my mind he made the right one.

Let me note that the Board understands --- and shares --- the frustration of many of you, especially many of our most loyal and passionate alumni, in regards to the Freeh report and the NCAA sanctions.   We understand how such frustration and anger can play out.

Our alumni are one of Penn State’s most valuable assets.  As such, it is critically important for key members of the Board to meet and interact with alumni leadership.

Tomorrow leaders of the Board of Trustees will meet with our counterparts of the Penn State Alumni Association to first, listen, and then hopefully exchange ideas.

In addition, several Board members and I are meeting each month with an Alumni Advisory Group to discuss our moving forward plans and get their feedback and input. 

But the process cannot end there. 

I am also proposing that within the next few weeks and months we meet with alumni leadership across the University to further open communications and work collaboratively on the great challenges ahead. 

This Board’s goal, which needs to be our common goal, is to create a clear path to build on our great heritage and become an even greater university.

But to create such a path, we must often make difficult and painful --- but necessary --- decisions. 

As an institution, we have made those tough, often unpopular but necessary decisions.

In so doing, we never lost sight of, nor will we ever, our fundamental mission as educators and molders of character. 

That mission is our fiber, our DNA.  It is Penn State. 

Because of it, “We Are Penn State.”

But we all recognize that path is challenging. 

As with other universities across the country, we face difficult economic and fiscal times as we reaffirm our twin commitments to academic excellence and fiscal sustainability.

When we consider those financial challenges, let me make an important point here.  While we cannot minimize the financial impact of recent events, specifically the NCAA actions, I can assure you the financial condition of Penn State is solid.  It was solid before the unfolding of these events, and continues so. 

Other challenges exist, challenges we need to turn into opportunity. 

For instance, technology seems to dominate our lives.  Its strategic implications and opportunities, now visible in all sectors of higher education, must be addressed.  The choices that lie ahead are among the most critical.

Our World Campus platform is at the forefront of educational technology.  We must continue that visible leadership, opening new frontiers in this growing area. 

We Are Penn State and we accept such leadership responsibility.

And what about leveraging our special strengths?  Where do future opportunities lie?

And what will define Penn State as one of the world’s great universities in the years and decades ahead?  

How do we optimize our special character, the character of Penn State, and all that means, not just here in State College, but across our twenty-four diverse campuses?

Perhaps most compelling, what will it mean when we say, “We Are Penn State?”

At our last meeting I spoke of “The Blue & White Advisory Council.”  Today, I am pleased to tell you the formation of this outstanding group is underway.

It will identify key strategic challenges and opportunities facing Penn State in the years ahead, a five to ten year time‐span, and assess the implications for the University.  It will focus on what the University is today as well as what the University can and should be in the future. 

And, it will seek answers to the questions I raised moments ago.

Advising this group will be Stan Ikenberry, who many of you know is the former University of Illinois president and current senior fellow at Penn State.

I am announcing that the presidential search process will begin in November.  The members of that committee, the process, scope of its responsibilities and time table for completion will be announced then.

In addition, the search for a new provost also continues.  

The search for a new compliance officer is in the final stages. 

Having a single compliance officer will centralize some 140 distributed compliance personnel under one organizational umbrella, giving us vastly better control and oversight.

We are updating other departments as well, including the important areas of human resources and university relations. 

Underway now, with the appointment of Chief Counsel Steve Dunham, is the enhancement of our legal department. 

As is evident, we are totally revamping, upgrading and enhancing our management team and our infrastructure.  The investments made to core functions are necessary… and will pay solid dividends for the future.

The Board is also broadening its own thinking and looking to the future.  As I just announced, we are conducting an in-depth strategic review to be completed within six or seven months, which will coincide with the presidential search.

With the support of our greater Penn State community, and especially our alumni, with the successful execution of such plans and actions, we can --- together  --- raise the Penn State brand to heights we all thought unattainable a little less than 12 months ago.

Clearly understand Penn State operates from a position of strength and high regard.

Our research enterprise continues to grow its reputation as President Erickson will report in just a few moments.

This week more than 500 organizations --- 527 to be exact ---participated in our Fall Career Days.  This is a robust turnout, and significantly, many companies registered for multiple days and reserved more booth space than in past years; all in the face of what everyone agrees is one of the most problematic job markets for new grads in recent memory.

Finally, on a personal note, I have spent most of my adult life in business, finance to be specific. 

I can tell you unequivocally… that the reputation Penn State graduates carry with them into business --- or any other sector for that matter --- is one of intelligence, hard work, and integrity. 

We are Penn State, and we will succeed.

Thank you.

Karen B. Peetz ’77

Chairman, Penn State Board of Trustees