Running the Church… Freddie Mac Style

There was a brief controversy in the summer of 2003, when a group of liberal and progressive Catholic figures held a closed-door meeting to discuss Church matters with several high-level prelates, including Archbishop Wilton Gregory and Theodore Cardinal McCarrick. Deal W. Hudson and others at the time observed that the group had a number of well-known dissenters and yet no conservative Catholic voices, and was also unusually Boston-centric. A second and similar meeting was arranged between the same prelates and the conservative critics, and the matter was closed. 

But that’s not to say the matter was ended.

Geoffrey Boisi — the leader of the original group — eventually relaunched his organization with a press conference on March 14, 2005, under the mellifluous name the National Leadership Roundtable on Church Management (NLRCM). The group meets yearly at the Wharton School of Business, issues annual reports, produces DVDs and instructional materials, gives out awards, develops Church management degrees for Catholic universities, and so on.

According to the most recent article on them in Businessweek — yes, there was more than one; NLRCM has a talent for publicity — one of the founding members was none other than former Freddie Mac CEO Richard Syron. In this case, he is “former” because, after five years of his governance, the U. S. government had to bail out and nationalize Freddie Mac to the tune of $100 billion — all in a perhaps-futile attempt to keep the world economy from capsizing.

Of course, you wouldn’t know that Syron is involved in the Roundtable from the Web site: Go to the Board of Directors, and he’s not there. Look back in the archives, though, and you’ll find him listed as a board member on a few of the annual reports.

And that’s not his only membership. Syron is a longtime member of the Board of Trustees of Boston College, which was probably his main connection to the whole business in the first place (Boise is a Trustee as well, and he and Syron worked together on choosing a new president of the college).

Obviously, Boston College is a Catholic institution, and Boisi’s and Syron’s broader interactions with the Boston Archdiocese appear to have been the impetus for the creation of NLRCM. It was already in the planning stages when the Long Lent of 2002 began, and the organization would eventually give the Archdiocese of Boston an award for following its recommendations.

Unfortunately, NLRCM is a creature of Boston, and that’s a problem. As I was looking through NLRCM’s ponderous material on Church governance, one interesting detail from a CNS article jumped out at me:

“Badly managed hospitals give you bad medical care,” said Jesuit Father Donald Monan, chancellor and past president of Boston College, at the 2004 meeting. “Badly managed universities give you bad education. Badly managed court systems fail in justice. And badly managed churches, I think, begin to fail in their own mission.” 

He suggested dioceses could draw lessons from the experience of Catholic colleges and universities, almost all of which now rely on predominantly lay boards of trustees. He said the “performance culture” that such trustees bring to the institution “flows down from the board to the entire set of operations.”

Entire dioceses run the way the trustees of Boston College run Boston College? Sounds like a promising idea, right? 

Actually, it sounds a lot like Freddie Mac.

Bear with me: In the Boston College model, lay trustees run things, but the college has the implicit backing of the Catholic Church should they get into trouble. In the Freddie Mac model, shareholders and executives run things, but the enterprise has the implicit backing of the U. S. government. If they find themselves in a difficult situation, they get (ahem) bailed out. It’s a pretty good deal for the trustees, the shareholders, and the executives — but not so good for the people they serve.

Does this mean the NLRCM bears the stain of Syron forever, and should be shunned by all that is organizationally good and decent? Well, if their goal is to promote a Lay Trustee model of governance for the finance and personnel decisions of the dioceses of the Catholic Church, with the implicit backing of the Catholic Church, then yes. Episcopal governance is actually one of the marks of the Church, and at least in practice, the Lay Trustee model threatens that. It is true that St. Ambrose was selected by lay acclamation, but he was never vetoed by the same, and that is the unique power of trustees. It does not fit well into the Church’s governance model, and where it has been tried — in Boston and elsewhere — Catholic identity has been compromised.

The executives of Freddie Mac, including Richard Syron, played an interesting game over the years: When Congress demanded greater oversight, they hid behind their responsibilities to their shareholders. When the shareholders complained, they cited their congressional charter. That’s the dynamic of an organization that serves two masters. Let’s avoid creating a second master for the Church.