Experts raise flags about move from board to CEO

By EDDIE PELLS | The Associated Press • Published March 13, 2009

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COLORADO SPRINGS, Colo. — The new boss at the U.S. Olympic Committee says transactions such as the one that put her in power happen fairly often in corporate America.

Experts in business ethics say Stephanie Streeter’s move from the volunteer board of directors to interim CEO raises a number of red flags, especially because the USOC isn’t just another business.

“Because of the symbolism of what it is, and what it represents, the U.S. Olympic Committee should be held to a higher standard than the vast number of corporations out there,” said John Holcomb, professor in the business, ethics and legal studies department at University of Denver’s Daniels College of Business.

Last week, CEO Jim Scherr unexpectedly resigned and was replaced by Streeter. On Monday, leaders of the U.S. national governing bodies (NGBs) — the organizations that run the many Olympic sports — will meet with USOC chairman Larry Probst.

They want him to explain why Scherr was ousted and Streeter, considered Scherr’s biggest critic on the 10-person board, was chosen to take his position, which paid more than $500,000 a year. They want to know if the USOC plans to conduct a search for a permanent replacement. They also want to know if Streeter, as CEO, will give up her board position.

In an interview earlier this week, Streeter said she was surprised at the reaction to her move into Scherr’s spot and said “you see it happen in corporate America fairly often, where a board determines there’s a person they’re very comfortable with who sets up the organization for future success.”

The USOC — a nonprofit organization chartered by Congress — is not corporate America, which might help explain the negative reaction from some in the Olympic movement.

“The Olympic committee has to be better than good,” said John Dienhart, director of the Business Ethics Initiative at Seattle University. “They can’t appeal to ordinary standards of business and say ’We adhere to that and everything is fine.”’

Holcomb said it’s not unheard of for someone to take roles as both CEO and board chairman, but the worldwide trend in corporations is to separate the two.

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