University of Minnesota's Joan Gabel should drop Securian role

Opinion editor's note: Editorials represent the opinions of the Star Tribune Editorial Board, which operates independently from the newsroom.

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Why do people in high places — or those who've been there before — join corporate boards?

1) Because it's important and challenging work that lets them connect with others in high places and get involved in decisions that could provide both personal growth and experiential benefits to other organizations they're involved with — including, perhaps, their primary employer.

2) Because there's good money in it.

3) Because they can.

No. 1 is true even though it might sound like blather to some.

No. 2 is true by the numbers. Median compensation for board members of private companies is around $45,000, according to a study done a couple of years ago, and for public companies it can go much higher.

But keep No. 3 at the front of your mind. Because one of the easiest things for, say, the president of a beleaguered public university to do if invited to join the board of a company with which said university does more than a billion dollars in business — thereby creating at least the perception of a conflict of interest — would be, well, not to. As much soft expectation as there might be for a prominent person to add such duties, serving on an array of boards is not an absolute requirement of leadership. It's a choice.

By now you may have figured out that we're talking about the University of Minnesota; its president, Joan Gabel, and Securian Financial, a St. Paul-based insurance and financial services company that recently added Gabel to its 11-member board of directors.

We'll get to the conflict-of-interest question in a moment — it's no small thing — but first let's take a closer look at that description we used for the university: beleaguered.

It's an arguable word choice, but the fact is the state's largest institute of higher education has a lot of government- and public-relations building on its plate. It hopes for a significant annual funding bump from the Legislature, and amid the swirl of the Fairview/Sanford health care merger proposal it would like to reacquire its teaching hospital and expand its medical center.

At the same time, the broader U leadership has taken some reputational hits, with controversy over the appointment of an interim chancellor for the Duluth campus and comments by another regent about the Morris campus maybe being "too diverse." So the U doesn't need the additional distraction that Gabel introduced and that a majority of regents approved.

The university has a $1.3 billion business relationship with Securian. Gabel told the Star Tribune in a statement in December that she went through a conflict-management process before accepting the board role and that the plan approved by regents "removes me from the selection if and when the University chooses to evaluate new life insurance offerings for our employees, and of any role in the management of the University's retirement plan governance." Gabel did not respond to additional questions from the Star Tribune Editorial Board.

That such attention to potential conflicts is needed is evidence of the precariousness.

It hasn't assuaged concerns. U Regent Darrin Rosha, law Prof. Richard Painter and former Minnesota Gov. Arne Carlson wrote to the state Attorney General's Office and the U.S. Securities and Exchange Commission in December seeking an investigation. The AG's Office has referred the matter to the legislative auditor and Legislative Audit Commission. The office of Gov. Tim Walz said the governor has "expressed serious concerns," and some legislators are considering a response to such arrangements.

Rosha — one of three regents to vote against approval of Gabel's Securian role, along with James Farnsworth and Mike Kenyanya — appears to be digging deeper. KSTP reported last week that he's questioned whether Gabel had a role in approving a Securian contract in 2019 in violation of state law.

The worries also are spilling into the regent selection process. Ken Powell, the former General Mills CEO who is current chair of the Board of Regents, recently failed to receive the endorsement of the Regents Candidate Advisory Council in his bid for a new term. A member of the council cited the Gabel situation as a contributing factor. (Though the council makes recommendations, regent selections are ultimately decided by the Legislature.)

For a leader of a public university to join a corporate board is not new, nor are questions about appropriateness. Serving on community and nonprofit boards, as Gabel also does, does not raise the same worries.

Gabel now earns about $1 million a year in total compensation as U president, a position she's held since 2019. She told regents the Securian role pays about $130,000 a year.

A Star Tribune news article reported that she expects to attend daylong meetings four times a year for Securian and take some calls during the lunch hour. So she'll be getting that extra hundred-plus grand for what is essentially a side hustle, a more lucrative one than most enterprising Minnesotans could wish for.

We hope she'll revisit the question and conclude, beyond the personal bounty, that the cons of the arrangement greatly outweigh the pros.

Editorial Board members are David Banks, Jill Burcum, Scott Gillespie, Denise Johnson, Patricia Lopez, John Rash and D.J. Tice. Star Tribune Opinion staff members Maggie Kelly and Elena Neuzil also contribute, and Star Tribune Publisher and CEO Michael J. Klingensmith serves as an adviser to the board.