We recommend that the Board of Directors take the following actions to improve CPB’s governance processes.
1) Revise CPB’s By-Laws to:
- a) Clarify the Board of Directors’ and President/CEO’s roles and responsibilities (e.g., Board of Directors are responsible for development and oversight of high level public policy issues and CEO is responsible for managing professional staff in implementing policy).
- b) Develop Board of Director processes to investigate and discipline Board members when they are found to violate the CPB By-Laws, Directors Code of Ethics, CPB’s operating policies and procedures, and the Public Broadcasting Act.
- c) Establish standing policy and executive compensation committees to develop new policies and oversee their implementation.
- d) Establish procedures for the Board of Directors to assign additional duties to the Chairman or other Board members under Section 2.03. The assignment of additional duties should only be authorized by a Board resolution.
- e) Establish procedures for the Board of Directors to authorize, where appropriate, the Chairman to execute contracts under Section 5.01, e.g., in contracting for executive search firms, employment contracts, etc., in full accordance with CPB procurement and contracting procedures. This authority should be authorized by a Board resolution.
2) Revise the Code of Ethics for Directors to include provisions for the Board of Directors to discipline members who violate the Code of Ethics provisions.
3) Establish a policy that sets the tone about the importance of internal controls and ethical behavior to begin to change the culture of CPB. Adopt a formalized risk management program, incorporating concepts from the Sarbanes-Oxley Act of 2002, into CPB corporate governance processes that require CPB management to:
- a) Conduct a risk assessment of all major CPB activities and implement appropriate internal controls to minimize identified risks. The risk assessment should identify vulnerabilities to operations, develop appropriate internal control objectives, and implement internal control techniques to minimize risks.
- b) Annually report to the Board of Directors whether internal controls provide reasonable assurance of achieving their intended control objectives, identify material weaknesses in internal controls, and when material weaknesses are identified develop corrective actions with a time table for implementing corrective actions. The CEO and CFO must certify to the accuracy of the annual report on internal controls.
- c) Bi-annually test internal controls for effectiveness. Report the results of testing in the annual report to the Board of Directors.
- d) Require the independent public accountant to attest to the accuracy of management’s annual report to the Board of Directors on internal controls, as part of their annual financial statement audit.
- e) Request the Office of Inspector General to:
i) Provide technical assistance in conducting risk assessments, including inventorying activities to be assessed, developing control objectives, and designing control techniques.
ii) Conduct periodic reviews of significant activities to ensure effectiveness of internal controls.
iii) Conduct reviews of alleged violations of CPB By-Laws, Directors Code of Ethics, CPB’s operating policies and procedures, and the Public Broadcasting Act by Board members and CPB staff.
4) Establish formal policies and procedures for conducting regular reviews of national programming for objectivity and balance. This policy should be developed in conjunction with all significant stakeholders in the public broadcasting community to ensure transparency and agreement on the criteria to be used to evaluate objectivity and balance.
5) Provide policy guidance to CPB management for designing personnel practices and procedures to prevent personnel decisions from being made based on “political tests,” e.g., fully documenting how employees are recruited and the basis for the hiring decision.
6) Evaluate executive employment contracts and other executive compensation packages for reasonableness and the prudent use of CPB funds.
7) Review practices for determining what items are put on the Board’s agenda for public meetings, executive sessions, and private informational or project status update meetings, to ensure that deliberations leading to Board actions are always held in public meetings. This will ensure that Board decision-making is transparent and affords the public the opportunity to be heard about important matters of the corporation.
8) Establish a policy to require corporate officers to inform the full Board of all new policy initiatives, significant deviations from accepted operating practices, and any inappropriate actions or behaviors by any CPB official (Board members, executives, directors, and employees) involving the commitment or expenditure of CPB funds. We recommend that CPB management take the following actions to improve CPB’s operating policies and procedures.
9) Centralize the procurement and contracting for consultant services within OBA to ensure that all consultant services are procured in accordance with established policies and procedures.
10) Ensure that all consultant services are procured in accordance with established policies, including procurements initiated by the Board and CPB’s front office. Consider requiring that all procurements that do not follow established procurement practices be immediately reported to the Board’s Audit and Finance Committee.
11) Revise CPB Contract Policy, Section 1.4.3, Procurement to include addressing the qualifications and expertise of consultants, including verification of uniquely qualified consultants.
12) Revise CPB Corporate Funds, Custody, Obligation and Disbursement Policy, Section 2.6.1 (ii), Consulting to clarify that all sole source consulting procurement decisions, including procurements of less than $50,000, must be documented with a written justification for the decision. The documentation should identify the consultants considered, their availability, qualifications, expertise, and costs.
13) Consider reporting regularly to the Board’s Audit and Finance Committee all sole source procurement decisions, including justifications supporting the decision.
14) Enforce existing requirements that invoice approvals include sign-offs by appropriate officials that deliverables have been received and were accepted by CPB. Discontinue the practice of stamping the approval form with the “Signature on File” stamp.
15) Reinforce CPB Contracts Policy, Section 2.4, When Work May Begin for consulting contracts to ensure contracting departments understand that only in emergency situations should contractors begin work before a contract is executed and consider reporting to the Board’s Audit and Finance Committee all instances where work begins before a contract is signed with an explanation of the urgency in starting the work.
16) Establish personnel policies to address executive recruitment, employment contracts, signing bonuses, and buyouts provided employees when operations are not being downsized or reorganized to ensure consistency and transparency of operations.
17) Incorporate into corporate officers’ job performance expectations (job elements) responsibilities to ensure policies and procedures (procurement and personnel) are followed and to report deviations from established practices to the General Counsel, who will report such deviations to the Board of Directors.