Grassley Urges Support for Red Cross Governance Reform Legislation

Because disaster never rests, the American Red Cross has been very busy in our home states over the last couple of weeks. Whether a disaster occurs across town or across the country, these good people are willing to go at a moment's notice to translate the compassion of the American people into food, clothing, a place to rest and more.

Now the Red Cross needs the help of Congress in order to modernize its governance structure. Let's be as reliable as we expect the Red Cross to be.

The last significant review of the American Red Cross governance occurred in 1947, at the end of World War 11. The Board of" Governors of the Red Cross spent much of last year conducting a comprehensive review of the organization's governance structure, including a review of the size and composition of the Board, the qualifications and selection of Board members, the relationship of board and management, and governance of Red Cross chapters. Working with independent and preeminent governance experts, the Red Cross Board has unanimously arrived at a forward-thinking, new governance reform plan.

Changes would explicitly delegate to management the responsibilities for day-to-day operations; reduce the board's size by more than half: create a single category of Governors, eliminating the distinction between how members are selected: and transition seven of the Presidentially-appointed Governors into a newly created advisory Cabinet Council. These changes are not only supported by the American Red Cross but are strongly encouraged in the attached editorials appearing in The New York Times and The Baltimore Sun.

The Red Cross can't initiate these changes unilaterally. To amend the Congressional Charter, we must enact these recommendations in time to reconstitute the Board prior to the annual meeting in March, Let's act with same sense of urgency we expect of the Red Cross.

To view the American Red Cross Governance Modernization Act or to add your name as an original cosponsor, please contact Nick Wyatt in Senator Grassley's office at 202/224-4515; nick_wyatt@finance-rep.senate.gov or Celeste Torio in Senator Kennedy's office at 202/224-1850; celeste_torio@help.senate.gov by Friday, February 16. The legislation is available on the internet at http://www.redcross.org/images/pdi5/GovLang020807.pdf.

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The American National Red Cross, which came under criticism for its handling of relief efforts after 9/11 and particularly after Hurricane Katrina, is trying to reorganize itself to make clearer distinctions between governance and management. For millions across the nation who are likely to need the organization's help in the future, this is good news.

It will be up to the new Congress to make this happen. Founded by Clara Barton in 1881, the Red Cross was given special status by Congress in 1900 to help prepare for disasters and provide relief to victims, for which the agency now uses 35,000 employees and 1 million volunteers. A network of 800 local chapters provides a variety of services based on community needs, including food pantries and meals delivered to the homebound.

But the organization's current structure, which dates to 1947, has sometimes gotten in the way of its mission. Its 50-member board ranges from those chosen by local chapters to several appointees, including the chairperson, who are selected by the president. The board's unwieldy size and varied interests have often inhibited cohesive deliberations and policy coordination. And the congressional charter sometimes allowed the lines between the board's governance and oversight responsibilities and management's operational duties to become blurred.

Although Red Cross defenders insist that any confusion in the lines of authority did not hamper its disaster relief efforts, the triple whammy of hurricanes Katrina, Rita and Wilma in 2005 clearly outstripped the organization's capacity. Despite providing 68 million meals, working with 1.4 million families and distributing more than $1 billion in assistance, the organization still didn't have enough of the basics, including phone lines, cots, ready-to-eat meals and debit cards, to help all those in need.

The agency has since invested about $80 million to help ensure its preparedness for future emergencies, and it wisely heeded calls from concerned insiders and vocal outsiders, particularly Republican Sen. Charles E. Grassley of Iowa, for a major overhaul. Guided by a panel of governance experts, the Red Cross proposes to have only 25 board members by 2009 and no more than 20 members by 2012. The smaller board would be more focused on strategic oversight and governance, leaving operations firmly in the hands of management. An ombudsman would be selected, and whistleblower protections would be improved.

Such structural changes have been addressed in legislation sponsored by Senator Grassley that the new Congress should approve. The sooner the Red Cross can organize itself to be more effective, the better.

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We are cheered to see that the American Red Cross is making a concerted effort to reform itself. The organization has been criticized for its checkered response to Hurricane Katrina. But the United States relies on this charitable institution to be a key pillar in our nation's disaster-relief plan. It is in all our interests to see the Red Cross fix its problems.

Reducing its unwieldy 50-member board to no more than 20 members is the right step -- although we would prefer it happen before the proposed 2012 deadline. Congress, which oversees the organization, should approve this and other governance changes when it returns from the election recess.

The proposed changes would help to modernize management and oversight. The 125-year-old institution has a convoluted structure, which includes nearly 800 local chapters and 35 regional divisions for handling the country's blood supply. Such a complex organization needs strong leadership. Right now it is not clear who is in charge. The Congressional charter refers to the chairman -- a presidential appointee -- as the Red Cross's "principal officer." That undercuts the ability of the chief executive -- a professional manager -- to lead.

It is probably no coincidence that the Red Cross has been without a permanent chief executive since last December. The proposed reforms would clarify the lines of authority and empower the chief executive, by removing the chairman's "principal officer" designation. The chairman and board should instead focus on oversight and long-term strategy.

After Hurricane Katrina, critics faulted the Red Cross for its often slow reaction and its inability to anticipate basic needs. While these governance changes would not directly affect its disaster response, they would help attract the kind of leadership that could make operations run more smoothly.

Had the federal government's response to Katrina been more competent, the Red Cross's missteps would have been less noticeable and less worrying. Americans believe in the Red Cross. Donors sent over $2 billion to the organization for relief efforts tied to last year's destructive hurricane season, It needs to do more to merit that trust. And it needs to repair itself quickly. No one knows when or where the next major disaster will strike.

URL: http://www.nytimes.com