What Didn’t Work: Tongue-Tied at the Top

The deep division between pro- and anti-Ladner board members then turned destructive. With the board unable to agree on what to do about Ladner, the anti-Ladner camp leaked the audit findings to The Washington Post. Almost daily for the next few months, the Post published increasingly embarrassing reports about Ladner’s compensation and spending. Eventually, on Oct. 10, 2005, the board asked for Ladner’s resignation. Several board members also resigned over the controversy. Meanwhile, the board’s bitter public disagreements dimmed the interest of several candidates who might have succeeded Ladner, as well as alienated some very generous donors. It took the fractured board two years to find Ladner’s successor.

A SMALL PROBLEM
The Smithsonian Institution’s board of regents similarly failed to rein in its spendthrift executive. But when called to task for their oversight, the regents repaired their governance more quickly and completely than did American University’s trustees, providing an excellent lesson in crisis management.