University of Minnesota regents consider new panel to review presidential conflicts

University of Minnesota regents are considering creating a new panel to review potential conflicts of interest for university presidents, one year after they faced criticism for letting then-President Joan Gabel take a position with a company that had business with the U.

"We want candid review, candid independent review, in terms of whether there is a conflict," Board Chair Janie Mayeron said Friday, during a meeting of the board's Governance and Policy Committee. "The critical question is: Who should be on, then?"

Board staffers presented regents with a proposal for a new panel with two regents, a compliance officer, faculty senate leader and community representative. The proposal, subject to revision based on regents' feedback, could come before the board for a vote next year.

The U has negotiated two conflict management plans for presidents in the past year — one for Gabel and another for interim President Jeff Ettinger, who took over this summer. It's currently searching for a new president, with the goal of naming finalists in February.

"This is a great time to have this discussion," said Regent Kodi Verhalen, who chairs the committee.

Potential conflicts — or perceived conflicts — for university presidents are currently reviewed by the U's Institutional Conflict Review Panel, which includes officials who report to the president. If that panel finds a conflict, it drafts a plan for managing it and sends it to the Board of Regents for review.

The details of a new panel are still being hashed out, and regents Friday discussed whether such a group should include officials who report to the president and, if so, whether they should have a vote.

"Having the chief compliance officer as a voting member does create a question for me, because they do report to the president," Verhalen said.

Regents faced criticism for allowing Gabel to take a paid position on the board of Securian Financial, provided she agreed to recuse herself from decisions on contracts involving the company or its affiliates.

Regents who supported the arrangement said they thought the experience could help Gabel develop her leadership skills and that the plan put adequate safeguards in place. Those who opposed it said they feared it could hamper the U's ability to respond if concerns with the company arose.

According to a letter written at the time by leaders of the university's Conflict of Interest Program and Institutional Conflict Review Panel, the U pays about $4.6 million each year to Minnesota Life, a Securian Financial affiliate, to cover basic life insurance for employees. The U transferred its retirement plan administration from Securian to Fidelity a couple years ago but still has about $1.3 billion in "legacy business" with Securian, the letter said.

The arrangement was criticized by state officials, including Gov. Tim Walz and Attorney General Keith Ellison. It became a talking point at the State Capitol as lawmakers debated how much money to give the U and who should replace three regents whose terms were expiring.

Gabel eventually resigned from Securian's board, saying she wanted "to eliminate any further distraction of our work." She left the U earlier this year to become chancellor of the University of Pittsburgh. Gabel couldn't immediately be reached Friday for comment.

Ettinger, a former Hormel CEO, took over as interim president this summer. The university negotiated a conflict management plan with him, in which he agreed to take a leave of absence as director and chair of the Hormel Foundation board while serving as interim president, and to recuse himself from all dealings with the foundation.

The Hormel Foundation is involved in multiple research projects at the U, the largest of which are the Hormel Institute and the Future of Advanced Agricultural Research in Minnesota (FAARM) center.

The Hormel Institute is an Austin, Minn.-based center that develops research to prevent and treat cancer and other chronic illnesses. The foundation has donated roughly $4 million to $8 million to the institute in each of the past 10 years.

The U is working to develop the FAARM complex, a facility in Mower County that will promote agricultural and climate change research and teaching. The cost estimate for the project is roughly $220 million, and the Hormel Foundation has contributed $60 million.

Ettinger didn't see Friday's presentation because he was in another meeting. He said in an interview afterward that when he held corporate positions, any questions about him went directly to the board to avoid a scenario where his subordinates might feel pressured. If the goal is to ensure similar safeguards are in place at the U regarding conflict reviews of the university president, that makes "abundant sense," he said.

"One way or the other, the president should not be involved in it," he said.