University of Minnesota President Joan Gabel intends to take a paid position on Securian Financial's board of directors, an arrangement that drew both concern and support from regents.
The university has more than $1 billion worth of business with St. Paul-based Securian Financial and its affiliates, a conflict that some regents argued was insurmountable and others said could be managed with an appropriate policy in place.
In a committee meeting this week, some regents argued the position could help the university strengthen its relationship with a range of potential donors and help Gabel develop new management skills. Others argued it would create a perception of bias and limit the university's ability to respond if it had trouble with Securian in the future.
"I think at this level, at the board level, we should be purists. We should be without flaw," said Regent Darrin Rosha, one of three regents to vote against the arrangement.
Gabel is set to earn about $1 million from the university each year, after factoring in supplemental retirement contributions, a performance bonus and other allowances. She told regents the position on Securian's board pays about $130,000 per year.
Gabel told the Star Tribune she expects the position would require her to attend daylong meetings four times a year and to take some calls during the lunch hour. If Securian Financial's calendar conflicts with the university's needs, Gabel said the "expectation is that [your] job is your primary responsibility."
Gabel would not be the only university president to serve on the board of another entity. Ohio State University's president serves on the board of tech company Cisco. The University of Nebraska's president serves on the board of a bitcoin-mining company that aims to speed up "the transition to a zero-carbon future." The president of Rutgers University sits on the board of a foundation that gives grants to programs focused on arts and higher learning, while Pennsylvania State University's president sits on the board of a company that produces salad dressing and croutons.
Rosha said he viewed those arrangements differently, saying his research showed that some of them were unpaid while others held the posts before they were hired for their college president jobs. Regent Mike Kenyanya said he also had concerns based on the amount of business Securian does with the university.
According to a letter written by leaders of the university's Conflict of Interest Program and Institutional Conflict Review Panel, the university pays about $4.6 million each year to Minnesota Life, a Securian Financial affiliate, to cover basic life insurance for its 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 it, according to the letter.
Among those supporting the arrangement was Board Chair Ken Powell, who said the U's retirement plan relationship with Securian Financial would fade over time and the insurance industry had a "very deep market" that would ensure they could continue to solicit bids from other companies, if needed in the future. He argued that allowing Gabel to sit on the board "will actually make her a better president."
"I think that the conflict that we have here is easily managed," he added.
The board voted 9 to 3 to allow Gabel to take the position if she agrees to a conflict management plan. Among other things, that plan requires Gabel to recuse herself from any decisions on contracts involving the university and Securian Financial or its affiliates. Regents Rosha, Kenyanya, and James Farnsworth voted against.
Regent Kodi Verhalen argued the plan proposed for Gabel was actually stronger than the policy that exists for regents and requires self-disclosure of potential conflicts.
"We don't have a conflict management plan," she said. "We don't even have the ability within each other to force someone to quit what they're doing, if it conflicts."