Trustees: Governance of Affiliated Entities

TRUSTEES RECEIVE REPORT ON GOVERNANCE OF AFFILIATED ENTITIES

LIMA -- The Ohio State University Board of Trustees, meeting 
Friday (4/3) at the Lima campus, heard a report on the work of 
its Affiliated Entities Committee.  The committee is recommending 
an organizational model and governance structure to cover some 
two dozen current organizations, ranging from the university's 
fund-raising foundation to the Friends of WOSU, that are legally 
separate from the university but closely affiliated with it.  

The report also recommends guidelines for creation of future 
affiliates.  After circulation to deans and other university 
leaders, the report will be brought back to the trustees for 
adoption at their May 1 meeting.

The committee, consisting of Trustees Ted Celeste, George 
Skestos, Zuheir Sofia and Daniel Slane, was created as an 
outgrowth of the 1997 McKinsey & Co. board governance report, 
which recommended adopting a governance model that could be 
applied to these affiliated entities on the basis of their 
characteristics and needs.  The committee was assisted by 
Virginia Trethewey and John Biancamano, who presented Friday's 
report to the trustees.  Trethewey is vice president for legal 
affairs, and Biancamano is assistant vice president.

"The recommendations are not terribly different from the 
current practice," Trethewey said.  "They formalize the process 
and help ensure that the board maintains proper oversight of 
current and future affiliates."

The committee defined affiliated entities as organizations 
that meet three criteria:
1. They are corporations or associations with a legal
        existence separate from the university;
2. They are formed to support or complement the mission
        of the university; and
3. They were created by the university, or are controlled
        strongly by the university, or receive significant
        financial support from the university, or use university
        services or facilities.

The report recommends that the amount of supervision by the 
board be determined by the degree to which university funding and 
employees are involved in the entity's operation.  The report 
divides the current entities into three groups:

-- Level One entities, which perform functions essential to 
the university's mission, should have board oversight of policy 
direction and report directly to the trustees on a regular basis.  
Among those in this group are The Ohio State University 
Foundation, which solicits and receives private funds on behalf 
of Ohio State; The Ohio State University Research Foundation, 
which administers sponsored research agreements; and Campus 
Partners, which is involved in redevelopment of the Columbus 
campus neighborhood.

-- Level Two entities, which have less direct ties, should 
make periodic reports to the board through university 
administrators assigned to provide oversight.  Examples include 
the Friends of WOSU, the Transportation Research Center and The 
Ohio State University Alumni Association.

-- Level Three entities, which have the least direct ties, 
should be overseen by university administrators, who should 
report to the board only when there are significant achievements 
or unusual occurrences.  Examples include Reading Recovery, the 
Jack Nicklaus Museum and 4-H camps.

The report also recommends a seven-step process for 
approving a new affiliate, along with policy, legal and 
governance issues to be considered.  The process includes 
development of a detailed proposal, budget and business plan as 
well as review and approval at several levels, including the 
board's Affiliated Entities Committee.

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Contact:  Virginia Trethewey, vice president for legal affairs,
         (614) 292-0582.