The longtime president of the Stevens Institute of Technology, Harold J. Raveché, will resign, and the chairman and vice chairman of its Board of Trustees will face term limits, as part of a settlement announced today of a wide-ranging lawsuit against the college.
The lawsuit, filed by the State of New Jersey in September, had alleged that members of the Stevens board had mismanaged endowment funds, withheld information from the full board, and overpaid Mr. Raveché, who made more than $1.1-million in 2007-8 and was the beneficiary of more than $1.2-million in low-interest loans from the college. In the lawsuit, the New Jersey attorney general accused board members of violating their fiduciary duties.
The settlement was announced less than a week before the attorney general, Anne Milgram, leaves office, when Gov.-elect Christopher J. Christie is inaugurated, bringing with him a new cabinet.
Under the settlement, the chairman and vice chairman of the board will be limited to 15 years in office — meaning that the current chairman, Lawrence T. Babbio Jr., who was also named in the lawsuit, has about three years remaining, according to a press release issued by the attorney general's office.
Trustees who have served 12 years on the board and are older than 72 will no longer be allowed to vote, under the terms of the settlement, although they might remain in emeritus positions. The current membership of the board will be unchanged, but the president will no longer serve as a voting member.
The board's audit committee, which will be led by a trustee or external consultant chosen for "appropriate financial expertise," the settlement says, will have full control over the college's finances. The committee consists of at least four trustees and two faculty members.
A retired chief justice of the New Jersey Supreme Court, James R. Zazzali, will serve as special counsel for Stevens for two years, overseeing the institute's compliance with the settlement. Mr. Zazzali had been hired by the board to look into the state's allegations when the lawsuit was filed. Three consultants will also advise the board on executive compensation, financial controls, and corporate governance.
Mr. Raveché, whose resignation will be effective July 1, will remain a Stevens consultant until 2014. In a statement released today, he said he had decided to leave the institution because "remaining in office would have unnecessarily prolonged" the legal dispute. Neither Mr. Raveché nor Mr. Babbio admitted wrongdoing in the settlement.
Rita Bornstein, president emerita of Rollins College, said the settlement would allow the college to move forward and recover from the public scrutiny brought by the lawsuit.
"I think they're really moving now toward good governance," Ms. Bornstein said. "They really want to do the right thing at this point, and I think they're reviewing all of their processes, all of their relationships with the administration, to see how they can do it right."