Wednesday, April 2, 2014
The Boston Globe reports that the American Academy of Arts and Sciences (AAAS) released a report this week on its former president, Leslie C. Berlowitz, who allegedly “exaggerated her resume and manipulated the compensation process to boost her pay by nearly $2.2 million over her 17-year tenure.” Berlowitz responded with her own written statement that characterizes the findings as “incomplete and unfair.”
The story contains a link to a letter from the Chair of the AAAS Board to its fellows concerning the scandal, the full AAAS report by the Board of Directors, and Berlowitz’s written response. Nonprofit lawyers will be especially interested in the report’s findings concerning Berlowitz’s compensation. The AAAS report concludes that she exerted “inappropriate influence” over the process of determining her compensation and that, as a result, she was excessively compensated. Particular deficiencies, according to the report, include the use of inappropriate comparability data (supplied by Berlowitz) and the failure to rely on compensation consultants. The report recommends several changes in governance procedures to address the concerns.
The Globe reports that the Massachusetts Attorney General’s office “is reviewing the report and changes the academy is making.”
Beyond the news value of this story, the facts set out in the AAAS Board’s report might provide an interesting case study for both the board room (where nonprofit lawyers try to educate charity managers) and the classroom (where nonprofit law professors try to educate students). What allegedly transpired between Berlowitz and the AAAS compensation committee strikes me as similar to situations in which any number of other charitable nonprofits may find themselves.