Analysis by Don Knox, STATE BILL COLORADO
Picture this: A Colorado governor, fuming after reading a steady stream of negative headlines about the lavish spending of a well-heeled statewide organization, successfully leans on that organization’s board of directors. Coolly, it cans the offending CEO.
Industry officials howl. But the firing sticks.
The CEO in question? No, not Pinnacol’s Kenneth Ross. It was Thomas A. Levin, helmsman of nonprofit Blue Cross and Blue Shield in the early 1990s. And the governor? It was Roy Romer.
The boardroom showdown of governor vs. CEO drew headlines for months in Denver’s major dailies — yes, there were two then. More than anything, the showdown underscored Romer’s willingness to use the power of his elective pulpit to send management sinners packing.
Fast forward to 2011. Ken Ross and his predecessors have enviably managed Pinnacol Assurance, the state’s quasi-governmental worker’s compensation authority. The organization, once nearly broke, enjoys coffers so flush that Democrats at Colorado’s Capitol last year attempted a raid in part to stem the state’s own budget crisis. The attempt fails, but Pinnacol does not survive unscathed.
Unfortunately for Pinnacol, the current CEO happens to possess the Tom Levin gene: When the going gets tough, the tough go shopping. Pebble Beach? Check. French-cooking school? Check.
Denver’s TV news has been awash this week in coverage of the Pinnacol overspending. Senate President Brandon Shaffer called Friday for Ross’ head. This morning, so did The Denver Post.
There is a difference, however, between 1993 and 2011.
Then, the board of Blue Cross was stacked with well-meaning corporate execs with big reputations and long resumes. One of them, prominent Denver banker LaRae Orullian, was confident in her judgment of Levin’s ability.
“I don’t think there’s ever been a time when Mr. Levin lost the support of the board,” she said then. “We still felt he was the best in the business.”
So why did she vote to fire him?
“We knew we couldn’t keep him.”
Unlike Blue Cross of the 1990s, Pinnacol’s board of 2011 is much less known. The most recognizable name is that of a local auto dealer whose back-of-the-vehicle nameplate graces many a vehicle.
A list of the board members, including the start of their board tenure as well as their day jobs, appears below.
This board appears to be much more insular, as well. As this morning’s Denver Post editorial noted, four happened to travel on the same Pebble Beach junket that drew all the negative coverage. Surely, The Post noted, these members won’t race to fire Ross.
But still, you have to wonder:
— Despite some of its members’ shared culpability, will this board nevertheless send the head sinner packing?
— Will the incoming governor, John Hickenlooper, as Roy Romer before him, use the power of his elective pulpit to force a decision?
— Or does this test of wills end in more political standoffs, as they did during the Bill Ritter years?
Stand by, Colorado.
Don Knox edits State Bill Colorado and Law Week Colorado. He is a former business editor of The Denver Post and the Rocky Mountain News.
Gary O. Johnson, chair, joined the board in 2003. He is president of Strategic Insurance Consultants Inc., a company that helps independent agents merge with or purchase other insurance agencies.
Holman F. Carter, employee representative, joined Pinnacol’s board in 2010. He is president and business agent of the Amalgamated Transit Union Local 1001 and a member of the Colorado AFL-CIO executive council.
Ryan Hettich, employer representative, joined the board in 2006. Hettich is the owner of a Colorado Springs-based company in the business of retail dry-cleaning, textile restoration, and commercial real estate holdings.
Robert J. (R.J.) Jolly, employer farm and ranch representative, has been a member of Pinnacol’s board since 2003. Jolly is co-owner and manager of Barbara Jolly and Sons Ranch LLC, primarily a cattle ranching enterprise.
Debra E. Lovejoy, employee representative, joined the board in 2003. She is vice president of Employer’s Resources of Colorado Inc., which provides outsourced human resources services to Colorado businesses.
Robert C. McDaniel, finance/investment representative, joined Pinnacol’s board in 2010. He is the managing director of Metrix Advisors LLC, a management consulting focused on advising companies operating in heavily regulated business environments.
Paul Suss, employer representative, joined the board in 2004. He is president of Suss Buick Pontiac GMC, a family owned and operated automobile dealership.
Richard Rivera, employer representative, joined Pinnacol’s board in 2010. He is the president of Emergi-Medical Care Center in Pueblo and owner of HealthTrac Walk-In Clinic in Canon City
Nonie Rivale Willisch, employee representative, joined the board in 2010. Since 1998, she has sold workers’ compensation and commercial insurance for CRS Insurance Brokerage Inc. in Denver, focusing on the construction industry.
Source: Pinnacol website