Red Cross Board Pushes Another CEO Out

January 1, 2006       Marla Nobles      

The board of the American Red Cross (ARC) forced its second chief executive officer out the door in four years, and as politics in Washington, D.C., goes, this new departure has a connection to another former ARC boss, Elizabeth Dole.

Marsha J. Evans, the career Navy officer who took the position in August, 2002, resigned and immediately word of discord with the board leaked out. In her place, the board has installed the head of Biomedical Services, a division of the Red Cross that has been under consent decree with the Food and Drug Administration (FDA) since 1993, and has cost the charity millions of dollars in fines and reorganization costs.

The friction with the board, insiders said, was predominantly with board chair Bonnie McElveen-Hunter. A prominent Republican fundraiser, McElveen-Hunter was finance chairman for Dole during her presidential bid in 1999. McElveen-Hunter would comment for this story, other than the written statement.

Dole, now a United States senator from North Carolina, also issued a statement, but declined to be interviewed. “I’ve known and admired Marty for a number of years. I worked closely with her when she led the Girl Scouts of the USA, and I applaud her strong leadership of the American Red Cross. As a former president of this tremendous organization, I have seen first hand the Red Cross mission in action, with so many staff and volunteers extending a helping hand to families and communities in need. Marty is to be praised and thanked for her service and dedication to the Red Cross, often in challenging times.”

Evans resigned as the organization was coming under heavy fire from government and media alike for its handling of some aspects of the Hurricane Katrina operations. While the resignation was announced on December 13 and effective at the end of December, she had not been seen in the building since December 8, insiders told The NonProfit Times.

In a statement released immediately following the announcement, Evans explained her decision as one she made independent of the board. “I was fortunate enough to take some time off and spend Thanksgiving week with my husband (Jeremy Evans). This afforded me a rare opportunity for personal contemplation of my future plans. …I look forward to spending more time with my family.” As the day progressed, however, evidence of friction between Evans and the board surfaced.

Likewise, Evans did not return telephone calls seeking comment.

“The board is very supportive of Marty’s many accomplishments over her tenure here,” said Chuck Connor, ARC national headquarters spokesman. “However, the board had concerns going back some months about her management approach as well as her coordination and communication with the board.”

Evans’ resignation came hours before a House Ways and Means Subcommittee on Oversight hearing in Washington, D.C., to address charities’ responses to Hurricane Katrina; particularly the shortfalls of the Red Cross in serving the victims of Katrina. “That is purely coincidence,” said Connor. “Some reporters would logically say, ‘Ah ha!’ But it’s purely coincidental. This action had absolutely nothing to do with Katrina or any other program matter involving the Red Cross.”

Evans replaced Dr. Bernadine P. Healy who was asked to resign in October, 2001, amid increasing reproach for the way the organization handled $500 million in September 11 donations to its Liberty Fund. Some speculated she was pushed out by the 50-member board of governors, then chaired by the late David T. McLaughlin, due to differences about how to spend the money in the Liberty Fund. Reports later revealed that her resignation came three days after the board voted 27-5, concluding its overall loss of confidence in her leadership. Healy did not return telephone calls and emails seeking comment.

“I’ve heard from Healy when she was (president), the word ‘politics’ as far as the board was concerned,” said Steve D. Bullock, interim president at Red Cross following the departure of Dole (1991-1999) and prior to the appointment of Healy. But, said Bullock, who ended his 39-year career with ARC in 1999 and now heads the Knoxville, Tenn.-based nonprofit management and consulting firm The Bullock Group, the Red Cross board is no different than other nonprofit boards. “There are challenges that one faces working with a volunteer board, and those have to be understood. But I do think it is possible to have a good working relationship with the board. Bernadine was simply not a good fit.”

When Evans, 58, became the 13th president of ARC, she appeared to be a good fit. Evans brought to the service organization an impressive array of experience, including a 29-year career with the U.S. Navy, where she oversaw multimillion-dollar budgets and hundreds of thousands of employees. She was responsible for recruiting some 70,000 officers and enlisted personnel annually. Evans retired from the Navy in 1997 — one among only a handful of women to reach the honored rank of rear admiral — and in January, 1998, became executive director of the Girl Scouts of the USA. In the December 1, 2005, issue of The NonProfit Times, Evans was declared one of five executives of the year, a leader who stood up to the challenges wrought by Katrina.

Gail Sample, spokeswoman at the Metropolitan New Jersey chapter of ARC in Fairfield, N.J., said the resignation of Evans came as a surprise. “From where I sit, (Evans) seemed to be very much on top of all the issues,” she said. “There’s no question that anybody in that position (CEO) is faced with a lot of challenges. She was also faced with one of the largest disaster relief efforts in Red Cross history, and I thought the response to Katrina was phenomenal.”

At the Greater New York chapter, Evans was spotted frequently, attending fundraisers and other events run by the chapter. “She was a great spokeswoman for the Red Cross, and she worked very, very hard,” said Larry Geiger, senior director of communications and marketing at ARC of Greater NY. Describing Evans as “hands-on” and “available,” Geiger added, “She was a leader during the tsunami and Katrina, two of the biggest disasters we’ve ever faced.”

During the search for a permanent Evans replacement, Jack McGuire, the executive vice president of ARC’s Biomedical Services, was appointed interim president and CEO. The Biomedical Services division, which provides roughly half of the nation’s blood supply, has been under fire by the FDA for the past 12 years.

The FDA in 1993 took court action against ARC entering into a consent decree with the Biomedical Services division in response to “deficiencies in their tracking and procedures for ensuring the safety of the blood supply.” Fines were imposed in the millions of dollars. In April, 2003, the FDA and ARC entered into a revised decree that included many of the same substantive provisions, updated to provide a series of clear deadlines for completing requirements and addressed additional types of violations observed since the original decree was signed, according to an insight report.

Although the Red Cross has met several consent decree milestones, the FDA this past June sent a letter, addressed to McGuire, demanding the organization pay penalties surpassing $3 million due to “unsuitable blood components that were distributed during the period, April 15, 2003 through April 15, 2004.” This was the latest information made available by the FDA.

As per a statement released by ARC, it doesn’t look as though McGuire, who joined the organization in March, 2004, will be doing much in the way of change during his time as interim. “The organization will maintain its current strategy, direction and programs and will continue to ensure the continuity and stability of ongoing Red Cross operations.”

“The board is committed to maintaining the current course of the organization,” McElveen-Hunter said in a statement. McElveen-Hunter has been ARC chairman of the board since her appointment in 2004 by President George W. Bush. Ties to the Bush administration are not uncommon, as Bush also appointed McElveen-Hunter Ambassador to Finland in 2001.

“My concern is the leadership gaps,” said Bullock. “The Red Cross is an important organization for America and I just hope (the board) can find a way to keep it focused and do a good job. The turnover that we’ve had with the last three presidents is a little frustrating.” NPT