Corporate scandals are nothing new. Enron, Bernie Madoff, Lehman Brothers, AIG, Jim and Tammy Bakker, sexual abuse within the Catholic Church, and the list goes on. While CEOs often go to jail for scandals, their boards typically use the “we did not know” clause.

But the questions for the board of the Institute in Basic Life Principles (IBLP, formerly IBYC), past and present, are simple: Can they use this defense? Did they know nothing? If they say they did not know, then they ignored 35 years of history and obvious evidences of Bill’s harassment and abuse of female staff. Did they know, yet do nothing? If so, they are negligent.

Has the IBLP board (and the old IBYC board) been ignorant, or negligent? Either way, the board is culpable.

The question I would like to address is the culpability of IBLP’s board. To do this, I will measure the board against three well-established criteria for board performance:

1. Ensuring board independence;

2. Ensuring corporate and executive leadership’s legal compliance; and

3. Ensuring corporate and executive leadership’s ethical conduct.

A responsibility to govern independently

The ECFA (Evangelical Christian Financial Accountability), of which IBLP is a member, says this:

When a ministry encounters failure—or even worse, scandal—its difficulties can almost always be traced to a breakdown in governance.

Has the IBLP board of Directors governed in such a way that executive leadership of IBLP and ATI would not abuse its role in teaching, training, and mentoring minor children? Or of exploiting many of them as volunteers/employees?

Think of a local school board. If it were discovered that the superintendent had a 35-year history of sexual harassment and abuse that included staff and students, and the board had multiple opportunities to know of it, had been warned of it by past victims, the board would immediately be found negligent, if not criminally negligent.

Past experience  

As the scandal of 1980 broke, two board members finally woke up to their failure. One was a kindly minister. Another was Dr. Samuel Schultz, a well-respected Old Testament scholar from Wheaton College who was stunned by the revelations. He would publicly confess that the board was asleep and was primarily a figurehead that did not function as a governing body at all. As Recovering Grace has reported, Dr. Schultz finally resigned in disgust in January 1981.

But even before this, there was a medical doctor on the board by the name of Dr. Ed Brown. He left the board for an assignment in the Middle East, and, upon his return, he was “disinvited,” by Bill, from rejoining the board. Determining who should be a member of the board is the responsibility of the board as a whole, not the choice of one man. The CEO has only one vote. Yet Bill had the power to “fire” board members if he so desired.

In addition, many of Bill’s family members were employees of IBYC. His brother was the senior vice president. His father was CFO and, at one time, the board chair; two brothers-in-law were employees, as were a good number of nieces and nephews. Did the board ever insist on reasonable separation of duties so that family members were not supervising each other? Did they insist on reasonable separation of corporate financial assets from personal assets? The answer is no. In 1980, it was well known that IBYC was using corporate assets to upgrade family personal property.

A responsibility to ensure legal and regulatory compliance

Responsible boards take seriously the expectation that they operate at the highest levels of legal and regulatory compliance. Think of a hospital and the laws and regulations that govern its record-keeping. Would we send our sons or daughters to a hospital that was known to routinely falsify records of hospital safety? Are we pleased with the recent Veterans Administration hospital scandal? Of course not.

Independent and proactive boards do not wait until the unthinkable happens. They set the example for the entire organization and insist that systems be in place to ensure compliance. If the unthinkable does happen, then they act to bring the organization back into alignment with those systems and policies.

Past experience  

Recently, Charlotte’s story gives us compelling evidence of the board’s total disregard for corporate legal behavior. According to her story, the board became suspicious of her involvement with Bill and insisted she be sent home (fired). While sending her back to her family was probably appropriate, there are at least two problems with the board’s actions:

1. Evidently there was no follow-up action by the board to discipline Bill or investigate him for the sexual harassment of a minor girl. Charlotte explains her understanding that the board “called Bill on the carpet.” From her story, it seems that the board feared Bill had intimate interest toward a minor? But was there any kind of investigation? Was Bill disciplined? We can only assume not. From subsequent stories, we learn that he simply switched girls. Their stories corroborate Charlotte’s in many ways.

2. Today, anyone who has responsibility for minor children is required to report suspicions of any abuse to the appropriate State authorities. If teachers, principals, medical professionals, or counselors suspect abuse, they are legally required to report it. While these laws may not have been in effect during Charlotte’s employment, it is hard to imagine a board—the board of a Christian organization—doing nothing but terminating the girl’s employment. How about reporting the suspicion to her parents? How about offering psychological counseling? How about reporting the suspicion to the appropriate State authorities?

Lack of any kind of action by the board to protect staff from sexual exploitation by senior leaders means that the board condones the behavior. It is hard to imagine a board of a so-called Christian ministry doing effectively nothing when they fear, or are at least suspicious of, sexual or romantic intent toward a minor employee—especially when the senior executive is in his late 50s?

A responsibility to ensure ethical behavior

One might think that a Christian organization that espouses Biblical values would seek to conduct itself at the highest levels of ethical behavior. One might also believe that the board of Directors would insist upon nothing less and proactively promote ethical conduct. Experience and evidence with this board suggest otherwise.

Past experience  

In 1980, apparently a portion of the board knew of immorality among staffers and the abuse of young women prior to the scandal breaking.

After the scandal, Bill hired well-respected pastor Dennis Kizziar of Northwest Hills Baptist Church in Corvallis, Oregon, to conduct what was thought to be an independent assessment. The goal was to determine what went wrong. Sounds good, but the result was a foregone conclusion. The minister had no experience in assessing organizational behavior. He had no training or credentials in the delicate interviews of sexual abuse victims.

The pastor interviewed a few of the key witnesses and then wrote a report that determined the victims of sexual abuse were largely at fault for their own abuse. The absurdity was astounding! Furthermore, he found that the staff in general was allowing Bill too much control over their lives. This was laughable, as giving Bill control was a basic requirement for employment.

Current indications  

I fear the current IBLP board is doing the same thing again; only this might be a worse breach of its ethical responsibilities. They claim to have hired “outside legal counsel” to conduct an investigation. Sounds good. Has the ring of sophisticated intelligence. But the reality is another sham. The board may even mean well, but there are two problems with hiring the firm of Mr. David Gibbs, Jr.:

1. Gibbs’s specialty is defending organizations from actions brought against them for sexual abuse. Instead of hiring an independent expert at investigating the sexual abuse of minors, they have hired a defense attorney. This is the equivalent of hiring the fox to guard the chickens. The conclusion is foregone. I fear that any of the young women who speak to Gibbs’s lawyers will only be used to make themselves perpetrators.

2. Gibbs is hardly an independent and unbiased investigator. He is a well-known speaker at ATI conferences and, if the truth be known, has accepted fees for speaking at these conferences. (Bill was always careful about paying handsome honoraria to speakers at our staff retreats. Such remuneration was part of his practice of buying influence). Thus, he is hardly one who can be considered independent and unbiased.

Summary

In summary, can we trust this board to act reasonably in executing their responsibilities? I fear not. The IBLP board has known for decades of Bill’s manipulation and abuse of his staff. They knew it in 1980. They knew it when Charlotte was a minor girl being targeted by Bill. They had to have known something was wrong when Bill, at the age of 59, talked with them about marrying Meg, who was not yet 21.

Unlike the boards of Bernie Madoff, Lehman Brothers, AIG, and Enron this board won’t be able to say “we did not know.” They have been informed for more than 35 years. If it is found that Bill has been sexually harassing his staff, or worse, molesting minor children, he may rightfully go to jail. The board will no doubt plead ignorance and go home. But over the last three decades, former staff have submitted hundreds of pages of evidence that has been ignored; therefore, the ignorance plea truly is unavailable to them.

The only other plea is negligence. In any case, they are “on the hook.”

Dan B. Edds, MBA
Photos © Amir Zukanovic masterart “Corp. Gov.” and mindscanner (“Ethics”)/ 123RF Stock Photo