California State Legislators Notice Conflicts of Interest at the University of California

The San Francisco Chronicle reported that California state legislators have begun to pay attention to what the top leaders of the University of California have been doing after hours.

We have discussed the ongoing controversy about generous pay, perks and benefits given to the leaders of the University of California, including those who oversee the system's medical schools and academic medical centers.

The legislators are now concerned that some of their highly compensated university leaders are spending too much time on outside activities, after a report surfaced that University of California - San Diego (UCSD)Chancellor Marye Ann Fox serves on 10 for-profit corporate and not-for-profit organizational boards. California Senator Jack Scott, chairman of the Senate Education Committee, said "there needs to be a limit placed on the number of boards. I don't know what the magic number would be, but the Board of Regents ought to set a limit."

The Chronicle also reported that information about the board service of other UC leaders is beginning to surface, although none also obviously involved a leader of medical school or medical center being a director of a health care company.

More significantly, the legislators are beginning to worry that service on some particular boards might generate conflicts of interest. The Chronicle quoted Charles Elson, director of the John L Weinberg Center for Corporate Governance at the University of Delaware, "if you get on a board expecting a donation [to your not-for-profit institution from the corporation], it is exactly the wrong thing to do. You might argue it is good for your institution, but it is not good for the investors who elected you."

Of course, as we posted earlier, Fox's service on the boards of Boston Scientific and Pharmaceutical Product Development Inc generate another kind of conflict. The medical school and medical center which report to her may deal with these companies, and their competitors, as purchasers and venders. For example, the medical center doubtless purchases a considerable volume of the sorts of devices Boston Scientific makes, and may do externally funded research on such devices as well. These conflicts have potential down-sides for the companies and for UCSD.

Maybe at some point someone in the California legislature or on the state's Board of Regents will notice these conflicts too.