The Stevens Institute of Technology Board of Directors is composed of some pretty bright and well connected folks. Unfortunately, these pretty bright and well connected folks appear to have very little capacity in the prudence area. Recall please that prudence is pretty much the standard for assessing whether a nonprofit board is making the best decisions, in a fiduciary manner, for the organization.
The Stevens Board doesn't pass the test for prudence. The New York Times article, which tells the Stevens story, has a list that is essentially too long to review in today's blog, but believe me, this board fails in the category of best board. I suppose, assuming the members were not very bright, one could argue that these folks just didn't know how to ask the basic questions that help assess how well or badly, particularly financially, an organization is doing.
Could it be that these bright folks didn't ask for or didn't know how to read financial reports?
Could it be they really believed that their president deserved a salary more than the president of Harvard, Princeton, MIT and Berkeley?
Could it be that they really thought all was ok when two board members identified issues and then resigned?
Could it be that their best information about the school came from a State Attorney?
All this is certainly head scratching to understand the whys and wherefore's but do note: if you are a nonprofit board member and think you can't be individually and severally sued for, uh, imprudence, think again and take a look at this case. It is a definite learning experience.