If Wanda Austin had any aspirations to convert her interim leadership of the University of Southern California into a more permanent job, those hopes were dashed today (March 20) with the appointment of a new outside USC president.
The school announced that Carol L. Folt, the recently departed chancellor of the University of North Carolina at Chapel Hill, will become the first female president in the school’s 139-year history.
Austin, who had been drafted off the university’s board of trustees to become the school’s interim leader in August of last year, faced severe criticism over her decision to terminate the school’s highly popular business school dean. The controversial decision resulted in student protests, hundreds of letters and emails and petitions signed by more than 4,000 alumni, staff and faculty in support of Marshall School of Business Dean Jim Ellis. The school’s faculty complained about the lack of transparency and failure to consult with them.
WILL PROVOST QUICK SURVIVE THE LEADERSHIP TRANSITION?
After weathering months of complaints from Ellis supporters who believed the university’s decision was without merit and blatantly unfair, Austin will leave her temporary position on July 1 when Holt is expected to assume the permanent job. The appointment also places in jeopardy two other senior officials at the university—Provost Michael Quick and Senior Vice President for Legal Affairs Carol Mauch Amir—who have also been directly involved in the firing of Dean Ellis. Many donors began canceling or rethinking tens of millions of dollars of pledges to the school.
Austin never publicly disclosed the reason for the termination, only that the decision was made “after careful deliberation,” according to an email sent to alumni. “Because this is a personnel matter, we are limited in what we can share about this decision,” she added. However, unnamed university sources, in spinning the story to the Los Angeles Times, suggested that Ellis was ousted because he had allegedly mishandled gender and racial bias complaints at the school. Rick Caruso, chairman of the board of trustees, has been quoted in the newspaper saying that Ellis’ firing “is part of where the university is today in terms of acknowledging a proper culture that needs to be embraced and practiced on campus.”
In January, all 116 members of the Board of Leaders for the Marshall School demanded the immediate resignation of Board of Trustees Chairman Rick Caruso and the placing on leave of interim President Austin and Provost Quick and Senior VP Amir, claiming they had all lost their “leadership legitimacy” over the Ellis firing. “During the pendency of this important investigation, they should no longer be in positions of authority at this university,” wrote Gregory R. Hillgren, the chairperson of the business school’s Board of Leaders. “Rick Caruso should be immediately replaced by one or more of your members—he has proven himself to be grossly unfit to serve the best interests of USC–while both an Office of the President and an Office of the Provost can be established on a temporary basis until the investigation is concluded and successors are identified and secured. That office would temporarily consist of their second and third in commands.”
‘IT IS UNFATHOMABLE THAT MICHAEL QUICK IS STILL PROVOST’
Hillgren took special aim at Quick for USC’s earlier scandals, including the administration’s handling of a campus gynecologist, George Tyndall, who had been accused of sexually abusing patients for years, that led to the resignation of President Max Nikias last August. It did not go unnoticed when earlier last summer, a former vice dean of USC’s medical school testified that he had told Quick of his concern about the well-being of then med school dean, Carmen A. Puliafito, who was accused of taking drugs on campus and partying in hotels with people of “questionable reputation.”
When Puliafito finally resigned, he was replaced by Dr. Rohit Varma, who had been accused of sexual harassment by a female researcher at USC which reached a financial settlement with the alleged victim. Varma was pushed out. Then, last August, it was revealed that Marilyn Flynn, former dean of USC’s School of Social Work, was under investigation by the U.S. Attorney’s Office for inappropriate financial transactions.
“The Puliafito, Varma, Tyndall, and Flynn scandals were sufficient grounds to mandate the resignation of President Max Nikias but not Provost Quick, even though it is the Provost’s job to oversee the internal operations of USC as the university’s Chief Operating Officer?,” wrote Hillgren. “And now he has created the Ellis scandal where one didn’t exist? It is unfathomable that Michael Quick is still Provost, a power-position where he can and will continue to harm USC. That trust is not recoverable, so they must be immediately replaced for the good of the university. Accordingly, commission a similar independent examination of these officials, their actions and behaviors in this matter and other recent crises that have sequentially impacted the university.”
ONE OF FOLT’S FIRST DECISIONS MAY BE TO REVISIT THE ELLIS FIRING
The decision to hire Folt, approved by the Board of Trustees this morning, also comes in the midst of yet another round of bad publicity for the university which has been caught up in the massive college admissions fraud made public only last week. That scandal involved four current and former athletic coaches for USC who allegedly accepted brides to admit children of wealthy parents to the school. And one of her early decisions will, no doubt, be whether to revisit the decision to cut short Dean Ellis’ third consecutive term as Marshall dean by three years. The decision to terminate Ellis is effective at the end of the current academic year.
USC made clear that Folt’s experience in handling challenging issues as part of her appeal to the school. “Folt has deep experience leading a university through challenging times,” according to the announcement. “When she became chancellor of UNC in 2013, she inherited a university grappling with highly publicized past academic and athletic irregularities. One of her first actions was co-commissioning an independent investigation to fully understand the scope of the issue, and she oversaw the implementation of more than 70 reforms — designed together with the faculty — to ensure the highest standards of accountability and integrity across the university.
“At the same time, in partnership with the UNC Board of Trustees, faculty, staff and students, she drove critical conversations about race, appointed a special assistant to the chancellor to focus on diversity and inclusion, and completed the removal of a Confederate monument from campus. As colleges nationwide grappled with sexual violence, Folt strengthened the university’s policies on sexual assault and spoke out strongly on the topic on panels at the White House and other universities.”
AUSTIN WAS A RETIRED EXECUTIVE OF A NONPROFIT WITH NOT EXPERIENCE IN ACADEMIA
When appointed from the board of trustees, Austin stepped into a highly volatile situation, given the past number of scandals at USC. It didn’t help that Austin had never worked in academia and spent nearly her entire professional career at The Aerospace Corporation, a think tank of sorts that does R&D on military space programs. When she became CEO of the organization in 2008, it reported a surplus of $21.2 million on revenue of $843.6 million. When she left in 2016, the organization’s expenses exceeded its revenue by $23.9 million, a negative $45 million swing. Austin walked away with a compensation package valued at $9.8 million from the nonprofit, according to public tax filings. A university spokesperson says the compensation includes “the present value of future retirement payments.”
Austin, had been in the USC job for all of eight weeks when she had several direct reports begin to pressure Ellis into early retirement. When he refused to go quietly, she decided to fire him in on Nov. 27th in a tense ten-minute meeting with Amir at her side. Ellis was given notice only two months after he was awarded a $70,000 performance bonus from the university.
Ellis was named dean of the school in April of 2007, after joining the school’s faculty a decade earlier. A Harvard MBA and former executive for both Broadway Department Stores and American Porsche Design, he was selected after a search that included more than 250 candidates from academia and industry. At the time, the university noted that that Ellis was a frequently nominated candidate, popular among students, faculty and alumni alike. He had been one of Marshall’s most highly rated teachers, named professor of the year by numerous student organizations. When he was appointed to his first five-year term, he also had been an active member of the USC Marshall administrative team, having served as vice dean for external relations and associate dean of undergraduate business programs, as well as the university as vice provost for globalization.
In the nearly 12 years that Ellis has served as dean, he has raised half a billion dollars on behalf of the school and significantly improved the reputation and stature of the business school (see P&Q’s One-On-One Interview With Dean Ellis). In the latest 2018 Poets&Quants‘ ranking of the best full-time MBA programs in the U.S., Marshall placed 22nd, up four places from its year-earlier position. Bloomberg Businessweek gave the school its highest ranking, placing it 13th best in the U.S. this year. The school’s newly launched online MBA program was ranked first in the U.S. by Poets&Quants as well.