The Hershey Governance Settlement -

On Friday, July 29, the Pennsylvania Attorney General, the Hershey Trust Company and the Milton Hershey School, entered into a written settlement resolving an investigation conducted by the Attorney General concerning certain governance practices of the two entities. The high profile of both the parties and of the investigation, and the terms of the settlement, are worthy of health system governance committee review.

The investigation had been prompted by Attorney General concerns with Hershey compliance with a previous 2013 settlement between the parties on certain governance related issues. The key terms of the 2016 settlement reflect the particular focus of the Attorney General’s scrutiny. Those terms included ten year term limits for board members; mandatory performance evaluations; the resignations of five individual directors; required notice to the Attorney General on board nominations and a best efforts commitment to nominate candidates with appropriate education, training and experience; limits on director compensation; limits on cross-directorships with other Hershey-related entities; and clarifications to the existing Hershey conflicts of interest policy.