Schools Chancellor Pick to Quit Corporate Boards
By SHARON OTTERMAN and MICHAEL BARBARO
Published: November 12, 2010
Cathleen P. Black will have to give up more than the sweeping Midtown views from her office if she becomes New York City’s next schools chancellor: She will have to walk away from three lucrative sources of income that have made her a multimillion-dollar fortune over the last decade.
Seth Wenig/Associated Press
Cathleen P. Black on Tuesday as she was named schools chancellor.
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Nati Harnik/Associated Press
Cathleen P. Black at the Allen & Company retreat for media executives in Sun Valley, Idaho.
City officials said on Friday that Ms. Black, a publishing executive, would not only step down from her job as chairwoman of Hearst Magazines, as many had expected, but she would also resign from the boards of Coca-Cola and I.B.M.
Aides had indicated earlier on Friday that Ms. Black might remain on those boards, despite city rules that forbid employees from having a position or an ownership interest in a company that does business with the city.
I.B.M., with contracts totaling more than $300 million, is one of the city’s largest vendors. As for Coke, most of its sales to the city come through third-party vendors, which is normally not considered a conflict, though it could create the appearance of one.
The city’s Conflicts of Interest Board can grant permission to employees to serve on boards, typically on the condition that they recuse themselves from any city dealings with the companies.
“She met with city lawyers prior to her announcement and will follow their advice and that of the Conflicts of Interest Board to address any potential issues before she starts,” said Natalie Ravitz, a spokeswoman for the Department of Education.
But later on Friday, a City Hall spokeswoman, Jessica Scaperotti, said, “She will not be serving on any corporate boards at the time she becomes chancellor.”
Her board seats might have complicated her attempt to win a state waiver to take the job, which is necessary because she does not have the educational background that state law requires.
Some parents, teachers and local officials have already been urging the state commissioner of education to deny the waiver request, saying Ms. Black’s career record, which is almost exclusively in the corporate world, makes her unqualified for the job.
Ms. Black, named on Tuesday by Mayor Michael R. Bloomberg to succeed Joel I. Klein, is a top executive at Hearst, one of the world’s largest publishers. Her compensation there is not a matter of public record but it is likely to be several times the $250,000 the city would pay her as chancellor. She also now earns $500,000 a year for serving on the boards of I.B.M. and Coca-Cola.
Board memberships have long been a way for top corporate executives to supplement incomes and enhance résumés. Serving on boards generally requires a small commitment of time and offers handsome perks, like stock options, all-expense-paid travel and free merchandise.
Ms. Black, who is the chairwoman of the compensation committee and a member of the public issues and diversity review committee of Coca-Cola, attended 10 meetings in 2009, for which she earned $195,000 in cash and stock. She has been a director there since 1993.
At I.B.M., where she has been a director since 1995, she earns $300,723 a year in cash and compensation.
Aside from Ms. Black’s background, Mr. Bloomberg’s selection of her was also surprising for the secrecy surrounding it. Many of the mayor’s senior aides did not know about it until just before he announced it.
The mayor’s office has declined to reveal any details of the search process, but one respected educator has said he was consulted: Geoffrey Canada, the chief executive officer of the Harlem Children’s Zone.
Mr. Canada, in an interview on Friday, said Mr. Bloomberg had met with him about three months ago, around the time Mr. Kleintold the mayor he was planning to resign.
Mr. Bloomberg “asked for my advice on what would make a great chancellor, and I gave it,” Mr. Canada said. He would not elaborate on what his advice was and did not say whether Ms. Black’s name came up. But he said he was “thrilled” with the choice, citing her extensive management experience.
Mr. Canada declined to comment on whether he was offered the job. Mr. Bloomberg had called him the “most important living New Yorker” in a recent New York Magazine survey.
Also on Friday, Mr. Bloomberg announced that the chairman of the Panel for Educational Policy, David C. Chang, had resigned on Nov. 5. Mr. Chang, the chancellor of the Polytechnic Institute of New York University, was one of the original members of the panel, the successor to the city’s Board of Education. The panel is controlled by the mayor and has no significant power. In Mr. Chang’s place, Mr. Bloomberg named Robert Reffkin, an executive at Goldman Sachs.
Members of the panel said that Mr. Chang’s resignation was not a reaction to the appointment of Ms. Black but a long-planned retirement. Mr. Chang did not return calls seeking comment.
The training of Ms. Black continues, Ms. Ravitz of the Department of Education said. While she has not yet visited the department’s headquarters, she is in daily contact with officials there. She has also called Merryl H. Tisch, the chancellor of the Board of Regents;Sheldon Silver, the Assembly speaker; Christine Quinn, the City Council speaker; Catherine Nolan, the chairwoman of the Assembly’s education committee; Michael Mulgrew, the teachers’ union president; and Ernest Logan, the principals’ union president.
The Rev. Al Sharpton and Ms. Black have been trying to meet; he has concerns about her selection, a spokeswoman said, but he wants to meet with Ms. Black before reaching a conclusion.
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