Corporate Leader Named Red Cross CEO
Wednesday, April 9, 2008
The American Red Cross, seeking to restore a reputation battered by its response to Hurricane Katrina, rapid leadership turnover and faltering fundraising, named a veteran corporate leader yesterday as its president and chief executive.
Gail J. McGovern, 56, a professor at Harvard Business School, will take the helm of the nation's leading disaster relief organization at a time of widespread turmoil. She is the charity's seventh chief in as many years, succeeding Mark W. Everson, who was forced to resign in November for having what the Red Cross called an inappropriate relationship with a female subordinate.
Faced with a $200 million operating deficit spurred in part by dwindling fundraising, the Red Cross recently announced it would lay off one-third of the 3,000 employees at its Washington headquarters. The charity is also restructuring its organization after undergoing scrutiny from Congress.
McGovern has decades of management experience at AT&T and Fidelity Investments. In 24 years at AT&T, she climbed the ranks from a computer programmer to an executive, overseeing 40,000 employees in the consumer-markets division.
The Red Cross board of governors unanimously selected McGovern from a pool of 170 candidates. Bonnie McElveen-Hunter, the board's chairwoman, said she was impressed with McGovern's financial acumen and her commitment to nonprofits. She called McGovern's appointment a "home run."
McGovern will start June 23, leaving Harvard after six years on faculty. Her salary will be $500,000, plus a $65,000 signing bonus.
"One of the reasons I'm attracted to the position is that it does have challenges, and I'm hoping that I can bring my background and experience to the organization and help lead us to financial stability and growth," she said.
McGovern said bolstering the charity's fundraising is among her top priorities.
As a member of the Johns Hopkins University board of trustees, McGovern helped launch a seven-year, $3.2 billion capital campaign at the university. She also helped raise money in Boston for the United Way and a children's hospital.
"I feel that so much of what I've done in my life and business and in volunteerism has really trained me for this opportunity, and I look at it as a capstone for my career," McGovern said.
H. Art Taylor, president and chief executive of the Better Business Bureau's Wise Giving Alliance, said he hopes the Red Cross can leave behind past missteps that "left many in the public dismayed about the future of the organization and its capacity to deliver in time of need."
Although McGovern has experience in business and philanthropy, she has done little work in the primary mission of the Red Cross: disaster relief. The 126-year-old agency handles half the U.S. blood supply and has federal responsibility for coordinating the charitable response to the largest U.S. catastrophes.
McGovern will face a steep learning curve, said Paul C. Light, a Red Cross critic and nonprofits professor at New York University's Wagner School of Public Service.
"It is a learnable skill," Light said. "But nature has a way of disrupting our learning curves, so she needs to move very rapidly to get control of these issues."
Dean Zerbe, a former congressional counsel who led Capitol Hill's inquiries into charities, said, "More than anything, the Red Cross needs good strong management and leadership right now across the board."
Sen. Charles E. Grassley (R-Iowa), ranking member of the Finance Committee, which has held hearings on the Red Cross, said: "I'm looking for somebody that will continue what I think is reform within the Red Cross, making sure that they're good trustees of the money, able to keep the respect that the Red Cross has always had."
With about 35,000 employees and 700 chapters nationwide, the Red Cross is one of the country's largest charities. The agency is the gold standard for charities in the United States, Light said.
McGovern said a top priority is communicating the mission and work of the Red Cross. "I think when more and more people understand our mission, they'll open up their hearts and minds and, hopefully, their dollars," she said.