I continue to be astounded by the way the sacking of Methodist Ladies College principalRosa Storelli has played out. From where I stand it appears to be both a complete PR disaster and a sombre lesson in leadership. Of course PR, real PR, and leadership are intricately linked.
Good PR requires courage – think the Longford gas explosion of 1998. Esso, a company not particularly enamoured of the wider public, had a senior executive give a press conference every day (at 2pm if my memory serves me correctly) during the crisis regardless of whether there was anything new to report. He took pretty much every question the gathered reporters wanted to ask. He answered every one calmly and politely with facts as fully as he was able. People wanted to know what happened and when they could expect their gas supply to be restored. Esso gave them as much information as they could in each case.
For another example, just as emotive but with much less import, take the sacking of long time Essendon coach Kevin Sheedy in 2007. The Essendon Board decided on the line it would take – for better or for worse the Board had decided it needed a fresh face in the coaching box – and stuck to it. In the face of a strong campaign by Sheedy and his supporters, the board never wavered from this position. It refused to enter into a slanging match with the former coach and publicly (at least) pleaded with him to respect his own brand and continually reiterated he would always be welcome at Windy Hill. Interestingly, the Essondon Board took this action knowing that it would face an Annual General Meeting a few months later – something the MLC Board does not need to fear.
Neither of these approaches appear evident in the MLC episode. Everyone outside the Board itself is being drip fed information – rumour and innuendo abound as the Board seems unwilling to give its full reasons for its action. The parents and students, far and away the most important stakeholders in the school are left completely in the dark and are, understandably outraged.
Once again I reiterate I am, like every one else I know, without full possession of the facts. So my statements here are made completely as an outsider looking in. I disclose that Judy and I sent our four daughters to MLC and Rosa was Principal for most of the time they were there. We have great admiration for her albeit with some qualms about the corporatisation of the school that occurred on her watch.
The chief PR disaster in this affair appears to be Louise Adler. If I were advising the MLC Board I would suggest they lock her in The Dungeon (a basement room at MLC were the IT staff work) and not let her out until all threat of a storm has passed.
Her contributions seem to be, to say the least, unfortunate.
The Board “has not accused Ms Storelli of any dishonest conduct or fraudulent behaviour.”
First therewas the initial letter to parents. (As a past parent who personally contributed about half the amount in dispute to the school, I have not received any correspondence from the school so I am relying on press reports.) Ms Adler said the Board “has not accused Ms Storelli of any dishonest conduct or fraudulent behaviour.” Well! That hardly needs any further comment. If there is a wrong way to start this affair, that surely is it. She has not engaged in any dishonest conduct of fraudulent behaviour. Presumably no one is suggesting she has “lost her mojo” as a Principal. Has she been unethical? Has she acted outside the bounds of her authority. Quite possibly she has. But surely a parent paying more than $20,000 per year per child – largely on the basis of Rosa Storelli’s reputation – deserves to know more than this.
“The international search for a new principal had begun.”
Oh dear. This would have be one of the worst PR blunders of all time. As if you can rip the heart out of a school and just transplant another one in. How about “The Board will now take some time to reflect on the College’s requirements and will begin a search for a new principal at the conclusion of this process.”
Rosa may wish and hope for divine intervention…”
Someone I presume to be Ms Adler is reported in The Sunday Age this morning as saying “Rosa may wish and hope for divine intervention…” Well I suspect that a lot of parents at the school and certainly the Church whose name it bears would find that phrase offensive as if divine intervention was a fair tale.
“Moderator Dobson stated publicly on Thursday evening that she supports the board’s right to terminate Ms Storelli”
This was an appalling and potentially libellous statement. I believe this misrepresentation alone is grounds for Ms Adler to resign. It was quite clear that Moderator Dobson acknowledged she had no authority to intervene and that the Board had the legal right to terminate the principal. However, to suggest that she “supported” the right was mischievous at least.
“There is money in Rosa’s bank account which is parents’ money”
Sorry but this is just a translation of the old phrase “this is shareholders’ money” which is used by Boards and senior executives whenever they want to do something unpopular. EG: “Oh sorry we can’t do anything else [but for e.g. sack 1000 workers] this is shareholders’ money we’re talking about.” Several millions of dollars of “shareholders’ money” paid to these same senior executives seems never to be a concern of theirs.”
And, excuse me, the school made a profit of $3.6 million last year. This is plain and simple overcharging of parents and represents a figure approaching $2000 per child. If the Board was really concerned about parents’ money this could have been returned to parents bank accounts but was not. To parents working two jobs struggling to meet the fees, this would have made a real difference.
Finally, how much of parents’ money will be spent on
- the “international search” for a new principal
- legal fees
- lost enrolments
- lost donations
- lost staff productivity?
Oh, and I expect the Deloitte “forensic analysis” cost a pretty penny.
Communication to Stakeholders
As I said above, the parents and students are far and away the most significant stakeholders in the school. However, there are others. Past parents and students certainly have some claim to being stakeholders having contributed (through fees, donations and their own time) to the development of the school. I would have thought the Uniting Church had some right to be regarded as a stakeholder as do donors and benefactors. Finally some 20 million or so people (as Australian taxpayers) contribute financially to MLC. Surely they are stakeholders as well.
With a decision of this magnitude, these stakeholders deserve to know much more than they are being told.
For one, the parents and students should be given a chance to publicly and collectively grieve what has happened. Rosa was principal for 15 years. Right or wrong, this is like ripping out the heart of the school.
Those parents who work two jobs and sacrifice so much to send their daughters to the school need to be told why this was necessary. I doubt we would have kept our girls at the school had this happened while we were there.
Sure there are confidentialities here. However, it seems a great deal of it will come out in court anyway. It doesn’t mean the Board needs to get into a public slanging match with Rosa. It would be very difficult to manage but a meeting of all interested (past and present) parents and past students would demonstrate extreme courage on the part of the Board and go a long way towards alleviating the concerns of these stakeholders. It could be done though. It couldn’t be worse than a public company’s AGM.
We are left in this whole affair with a number of unanswered questions, both in relation to this matter and to this particular incident in particular:–
Who owns MLC?
And the related question “to whom is the MLC Board accountable?”
Some of the smartest corporate people in the land make mistakes. The Telsta Board appointed Sol Trujillo for goodness sake. The Kennedy Administration authorised the Bay of Pigs invasion. When a the Board of a public company makes a decision of this nature it has to satisfy a number of probity issues. It would have to make a statement to the ASX. It would probably discuss the matter with key institutional shareholders. It would certainly have to face the heat of shareholder wrath at its next AGM. Imagine the Apple Board trying to sack Steve Jobs. By all accounts he gave them plenty of reason to. He treated them as reporting to him rather than the other way around. Some of his arrangements were suspect and the Board had to do some fancy footwork to protect itself. But the shareholders would have lynched any Board that tried to sack him. They benefited hugely from Steve Jobs as CEO. The Board had no option but to accommodate him. The best leaders are often idiosyncratic and are frustrated with rules. A good board knows when to reign the leader in and when to give them free reign.
The MLC Board on the other hand is accountable to no-one. It does not believe the Church has any jurisdiction over it – not even in a moral sense. It seems to believe the Uniting Church is irrelevant to the running of the school.
It is certainly not accountable to its parents.
It is, apparently, accountable to no-one. All other issues of good governance are swamped by this single issue. A non-accountable board is simply not good governance in any sense at all.
There are, I suggest, ways the current board structure could be held accountable by establishing several conventions.
Firstly, it could establish a convention of sounding out previous board members – especially chairs, on major or contentious issues. This is not giving away any of its authority it is simply seeking as wide a range of perspectives as it can get.
Secondly, it could involve the parents association in such decisions. By this, I mean once again seeking the counsel of someone outside the board. Of course this would have to be in utmost confidence. But a good relationship could achieve this.
Finally, to continue to use the phrase “A school of the Uniting Church of Australia” it must involve the Uniting Church at some level. Once again this is not to give away its authority. It is not to say the Uniting Church should have the final say, but it should be consulted and its views taken into account.
These conventions would establish at least some level of board accountability.
The Board’s own fiduciary responsibility
If Rosa Storelli has indeed been overpaid by $700,000 then someone at board level has been asleep at the wheel and should be called to account. If not the current Treasurer then certainly Treasurers past should be called to account. It seems extraordinary that a person who seems to be in no way involved in these errors is the one to fall by the sword.
Most corporate boards would have a risk management committee. Regardless management of risk is a key governance responsibility of boards. Risk is not only measured in financial terms. It is also measured, amongst other things, by the organisation’s ability to continue performing its major functions. It would seem the sacking of a principal has exposed the College to significant risk on a number of levels. It is hard to see from anything we know any serious analysis of these risks by the board. If the board has indeed failed to analyse all the risks associated with this action then I suggest it has no alternative but to resign.
Breakdown in relationship
Reading between all the lines in this sorry affair it appears the key issue here is not about the money. It appears the relationship between the Board and Rosa Storelli has completely broken down and this is the reason for her dismissal. The first thing I want to say about that is a breakdown in relationship is two sided. There are two parties involved. And two parties responsible.
Now it may well be that Rosa lost all sense of appropriate behaviour in this episode. She may have acted reprehensibly towards the board and its members. She may have acted without any sense of respect for their responsibility and the task they are charged to carry out. She may have said and done very hurtful things. Without diminishing my respect for her one iota, I suspect she is capable of all these things in the heat of a confrontation – passionate people always are. Again, without diminishing my respect for her, none of her great achievements and skills would excuse such behaviour.
However, it is hard to find any reference to the Board seeking outside assistance in resolving any breakdown in the relationship. It may well have done. If so, for reasons know only to itself, it has kept it very quiet. Given the time frames that have been reported, it seems hard to believe that sufficient effort was put in to use some form of outside moderation to resolve the situation.
Finally, I would like to say I know many of the Board members by reputation. I have no reason to believe that they are anything but rational sane people who have acted in what they believe to be the best interests of the school. Nothing I have seen or read changes my view of any of these people. I believe them when they say this was a heart wrenching decision for them and involved a great deal of soul searching.
Nothing I have said here is a reflection on the Board members individually. However, I have seen all too often situations where a group of sane and rational people acts completely irrationally – ie it is the group that acts irrationally, not the individuals. Those of us who really care about MLC need to know if this is what happened here or not. To know this we need to know a lot more than what we have been told so far.