A deep division apparently remains on the state board working to make Kansas a leader in the lucrative bioscience industry.

The nine members of the Kansas Bioscience Authority split over who should lead the board at its annual meeting on Tuesday at the Overland Park Convention Center.

Sandra Lawrence, executive vice president and chief financial officer for Children’s Mercy Hospitals and Clinics, was elected chairwoman on a 6-3 vote, defeating vice chairman Bill Sanford, president and CEO of Nanoscale Materials Inc. Sanford was one of the six votes for Lawrence. Sanford later said he did not vote for himself because it was clear he was not going to win.

After the meeting, Lawrence downplayed the close vote and said the board was committed to working together.

“This board all has the same focus, and that is to do what is right for Kansas,” Lawrence said. “There is a great amount of passion for what we’re trying to accomplish and that will pull us together as much as anything. We will do what’s right for Kansas.”

Tensions apparent

Sanford also stopped short of calling the board divided but said there were significant differences of opinion. The board has been in a state of flux since former Chairman Clay Blair resigned in early June amid questions about expenses charged to the authority. Some members have questioned those expenses. Others, including Sanford, have defended Blair, saying he was unfairly criticized.

Tensions increased in late June when the board met despite four of the nine members being unable to attend the meeting. Sanford on Tuesday made it clear he thought that was an inappropriate meeting because the organization’s bylaws read that meetings must be chaired by either the chairman or the vice chairman. Neither was present for the late June meeting, where the short-handed board acted on several governance issues.

The split on the vote for a new chairperson fell along much the same lines as those who attended versus those who did not attend the late June meeting.

Those voting for Lawrence were former Gov. John Carlin; former U.S. Rep. Dan Glickman; Ed McKechnie, executive vice president of Watco Companies; Angela Kreps, president of the Kansas Bioscience trade organization; Lawrence; and Sanford. Lawrence was nominated by McKechnie.

Those voting for Sanford were David Franz, vice president and chief biological scientist for Midwest Research Institute; Dolph C. Simons Jr., chairman of The World Company, which publishes the Journal-World; and Ray Smilor, executive director of the Beyster Institute, Rady School of Management at the University of California, San Diego. Smilor nominated Sanford for the chairman position.

After the roll call vote, the board then gave a voice vote of support for Lawrence.

Sanford noted that nominations normally would have been made through the board’s nominations committee, but instead they were made by board members during the meeting.

Investment strategy

Sanford said he thought the board may be split on what the proper investment strategy should be for the authority, which is expected to have approximately $580 million to invest in bioscience efforts over a 15-year period. Sanford said there was a “healthy” difference of opinion on how much financial risk the board should be willing to take with its investments in the bioscience industry.

“If I do have a concern, it would be that we as a board become too conservative,” Sanford said.

Sanford said he was not sure whether the new board would be less inclined to invest in the private sector but more inclined to provide money to university research efforts.

“I hope not,” Sanford said. “I feel very strongly that the primary purpose of the bioscience authority program should be focused on commercialization and success in the private marketplace.”

Lawrence, through her position as chairwoman of the Greater Kansas City Community Foundation, helped create a “blue ribbon” report on education in Kansas City that recommends significant amounts of new research funding for the Kansas University Medical Center.

New chapter

Tuesday’s meeting, which also featured a speech by Gov. Kathleen Sebelius, provided some insight into concerns that some leaders have had with the bioscience board. During her speech to bioscience leaders, Sebelius made a point to praise the board for recently placing additional measures into its operations to ensure transparency related to its investments.

Lawrence also said the board was in the midst of a transformation, which included “very rigorous procedures and policies” being put in place.

Sebelius also characterized the authority as starting a “new chapter” without Blair, who she said provided and “inordinate amount of time and energy.”

The board also formally thanked Blair for his efforts on the board. The authority unanimously passed a resolution recognizing Blair’s work and his efforts to always evaluate every project “in regards to the potential return for Kansas taxpayers.”

In other business, the authority received a brief update on the process the state is involved in to land the National Bio and Agro-Defense Facility. An announcement on which sites still are being considered for the major federal project is expected Thursday. The decision, though, may be communicated to state leaders today.

“I’m cautiously optimistic that we’ll receive good news,” Sebelius said.