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This Is No Time for a Softy

February 02, 2003

With the not-so-surprising news that County Executive Officer Michael Schumacher has been booted in the wake of the Planning and Development Services Department's implosion, the Orange County Board of Supervisors runs the risk of falling victim to the Goldilocks Syndrome.

Former CEO Jan Mittermeier clearly knew her stuff, but supervisors found her abrupt style too cold. Schumacher initially was seen as a calming influence on anxious county workers, but the veteran county executive proved too warm and fuzzy. It would be nice to report that the county's first true CEO had just the right stuff, but William Popejoy blamed supervisorial meddling when he abruptly called it quits after less than a year on the job.

Supervisors understandably want a successor to Schumacher whose personality is just right. But these are trying times for county residents, so supervisors must put personal agendas on hold and concentrate on the interests of the county. The search for the next CEO might go no further than interim CEO James D. Ruth. But the goal should be to find a successor who will maintain a firm grip on budget matters and exude the confidence needed to stand up to five bosses with a collective eye on the next election.

Orange County still labors under the considerable budgetary cuts forced by the 1994 bankruptcy. Sacramento already is leaning on local government to help deal with a predicted $34.8-billion budget gap over 17 months. Supervisors also must contend with financial repercussions of the planning department, which last year burned through an $18.5-million reserve fund and an $8-million emergency loan from the board.

Supervisors will be wrestling with the same governance issues as their counterparts in business. For-profit enterprises operate under a different set of rules, but strong chief executives are as necessary in a widget factory as in a local government with 18,000 employees.

Communications breakdowns and a lack of supervision allowed the moral lapses that led to the meltdowns at Enron Corp. and other scandal-plagued corporations. When the layers are peeled back and supervisors determine what went wrong in the planning department, the same forces will be to blame.

Local government leaders can learn from a discussion of governance issues contained in a report recently issued by the Conference Board. The business group that culls its members from the nation's best-known corporations urges a greater degree of separation between the chairmen of corporate boards and their chief executive officers. The report also calls for "open, honest and constructive" dialogue between boards and CEOs.

The report also underscores another important goal for supervisors and the new CEO--protecting long-term interests of stakeholders. Government can't simply take an ax to already strained budgets. Working together, supervisors and the new CEO must safeguard the long-term interests of the voters. Anything else will create the same kind of credibility gap now confronting many in business.

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