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UC President Robert Dynes addressed the UC Board of Regents Wednesday, admitting to limited blame

SAN FRANCISCO — In one of the most significant meetings the UC Board of Regents has held in recent years, the university’s governing body on Wednesday conducted its most complete and direct discussion on record of the compensation scandal that has weighed on the University of California since last fall.

In the first day of the two-day meeting, UC President Robert Dynes accepted blame for allowing “an atmosphere of secrecy” to permeate UC compensation deals, and the regents approved a laundry list of 23 specific reforms to UC compensation policies as the board tried to address the issues of accountability at the heart of the scandal.

The UC has taken considerable criticism since a series of newspaper reports beginning in November revealed pay for top officials was excessive and often given without the knowledge of the regents or the public.

The regents plan to announce today whether they will take any disciplinary action against Dynes, up to and including his firing.

Dynes, who has been on the hot seat recently for his role as leader of the university while many of the compensation policy violations occurred, stayed firmly in that seat as he faced criticism for his performance and heard calls for his removal.

Dynes remained stone-faced as several legislators sat across the table and asked that he resign from his post or be removed.

“You have had sufficient opportunity to implement the healthy reforms and clear up compensation abuses in the University of California,” Senate Majority Leader Gloria Romero said to Dynes. “Indeed, it seems the problems have flourished under your watch.

“I ask you to resign and I call upon this board to act decisively,” she said.

Dynes has taken criticism from newspapers, lawmakers, students, educators and others in recent weeks, but he has remained resolute in his determination to fix his own problems.

He made a presentation to the regents in which he accepted some blame for the compensation scandal and alluded to the steps he will take to correct the problems.

He said many of the policy violations stem from the fact that private universities have in recent years gotten richer while public universities have seen their funding slashed.

As a result, he said, the intense competition for top talent forced the UC into a state of extreme secrecy, where compensation packages were laden with incentives – sometimes without approval – to lure qualified candidates to the UC.

“There was a paranoia about leaking who the candidates were before we were prepared,” he said. “It’s a climate of exceptions and it’s a climate of trying to get away with as much as possible and disclose as little as possible.”

Dynes also said he was unaware of some of the policies created in the 1993 Principles for Review of Executive Compensation governing the university’s payment practices.

“There are a variety of reasons we did not comply with the 1993 principles. Most of them were ignorance,” he said.

In a meeting with the press after the meeting, Regent Chairman Gerald Parsky said it was unacceptable for the UC president to be unaware of any pay policies.

“I think that any chief executive should either know or have been informed about the policies he is responsible for,” he said.

Though Dynes said he would give a more detailed explanation to the regents in a closed session, he alluded to the reasons for some of his own failures.

“I missed some of the flags I should have seen,” he said.

But Dynes found support from some of his fellow regents for accepting blame.

Regent and Assembly Speaker Fabian Núñez, D-Los Angeles, who was present at the meeting, released a statement afterward, saying, “I applaud President Dynes for admitting to the regents that there is a culture of secrecy about compensation in the UC system.”

The regents met in closed session in the afternoon, where they were set to discuss specific personnel actions with Dynes and try to determine whether disciplinary action would be taken against Dynes.

After the two-hour closed session, Parsky met briefly with reporters but declined to say whether any action would be taken against Dynes. Parsky said Dynes’ responses to the regents “were very forthcoming and sincere” and the regents would announce today what, if any, action they will take.

Last week the San Francisco Chronicle filed a lawsuit to prevent the regents from meeting in closed session when they discussed compensation issues, arguing it violated the state’s open-meeting laws. Though the suit was rejected, Parsky started the meeting by addressing the issue.

He said the regents will continue with their policy of discussing private personnel matters in closed session and then immediately make public the action that the board decides to take.

The regents also received the results of an internal audit of senior managers of the UC during the calendar years 2003-2005.

This audit, the third and final, follows on the heels of an audit released April 21 conducted by independent accounting firm PricewaterhouseCoopers. This third report covers the 299 senior managers not covered in the April 21 audit.

Like the previous audits, this one found “a number of elements of compensation paid or committed that have not been approved by the regents.”

Additionally, the report found 143 instances in which university policy was violated without regent approval.

With all the audits available, the regents voted on a number of reforms that the university would take to correct the problems that led to the scandal. They approved all 23 actions, which were decided upon in response to the first audit from the Task Force on UC Compensation, Accountability and Transparency.

The reforms, all of which have begun to be implemented or will be by the end of 2006, range from the creation of an information human resources system to revising annual compensation reports.

In an attempt to address the systemic problems that led to the compensation scandal, the regents discussed restructuring the management of the UC Office of the President.

“It is clear that management business practices need to be adopted in this university,” Parsky said. “I think that it’s long overdue to look at this.”