Former Kauffman directors complain of CEO’s ‘excesses’

? Three former directors of the Ewing Marion Kauffman Foundation have raised concerns about the leadership of the foundation’s president, whom the three had a role in hiring.

The former Kauffman directors — past presidents Bob Rogers and Lou Smith and recently resigned board member Jim McGraw — sent a letter this month to Kauffman board chairman Michael Morrissey detailing a number of complaints against Carl Schramm, the foundation’s chief executive for the past 16 months.

Among the specific complaints made, according to a copy of the letter obtained by The Kansas City Star, were that Schramm has incurred “excessive” expenses with an employee buyout program, hired too many high-cost consultants to change the organization and lost too many of the foundation’s “key” managers and advisers.

Rogers, Smith and McGraw were all on the board until last year. They said in interviews this week that with so many scandals rocking high-profile corporations and even some major foundations, they felt a duty to report their concerns. Smith even said he felt a “moral responsibility.”

Kauffman’s board meets next week in Kansas City, and board members said they would discuss the letter at that meeting. Because the letter is a board matter, Schramm and Morrissey did not want to comment on the issues raised by the three former directors. Neither did most board members.

However, one board member, Patricia Cloherty, said Schramm has brought “fresh air and new ideas” to the foundation. She then chastised the former directors for trying to influence an organization they are no longer part of.

“Change is difficult for some people,” said Cloherty, an international venture capitalist and chairwoman of the U.S. Russia Investment Fund in New York.

The former board members feel that Schramm may be damaging the foundation’s reputation and the board is not doing enough about it. However, the three former directors did not specify in their letter what they wanted the board to do.

Foundation records show that Schramm spent more than $1.4 million during his first year on professional advisers and organizational consultants — something his predecessors seldom spent money on.

“Based on our experience, that’s an excessive amount,” said Smith, who retired as Kauffman’s president last year.