Faith in the leadership ability of the Permanent School Fund (PSF) Corporation’s Board of Directors, which is chaired by State Board of Education (SBOE) Member Tom Maynard, appears to be shaky after the organization’s CEO expressed his intention to step down.
As previously reported by The Dallas Express, PSF Corporation CEO B. Holland Timmins III informed Maynard on Tuesday of his intention to retire, not long after he drew a strong rebuke from the Texas Land Commissioner, Dawn Buckingham, who holds a seat on PSF Corporation’s Board of Directors.
The board met last Thursday, and Timmins and his staff fielded questions about what the organization could be doing to find alternatives to the investment and financial services companies it does business with that the Texas comptroller’s office found to be active boycotters of the oil and gas industry.
A 2021 Texas law prohibits state contracts with any such company.
State Comptroller Glenn Hegar issued a letter to the PSF Corporation in February, advising it to drop financial services companies engaged in such boycotting.
“I strongly encourage PSF to reevaluate any other continuing investment relationships it maintains with [such] financial companies,” wrote Hegar.
One such company, BlackRock, currently manages some $9 billion for the PSF Corporation. At the meeting, Commissioner Buckingham expressed her displeasure with Timmins, stating that his comments speaking to the subject made her “lose faith even more in [the PSF Corporation] staff’s ability and [Timmins’] leadership to execute on this board.”
Five days later, Timmins informed Maynard that he would be leaving his post in August.
The Dallas Express spoke with Commissioner Buckingham about the shakeup and where it leaves the PSF Corporation.
“I think it’s going to be an opportunity to do a nationwide search and recruit some top talent that might be a better fit,” Buckingham said.
She explained how the state’s oil and gas industry is the main driver of state funding for public education, stressing that paying companies with an anti-fossil fuel agenda directly undermines the state’s ability to provide a quality education for Texas children.
“I feel like the board needs additional expertise in financial matters. When I look at the backgrounds of the members on the board, well, I think everyone does bring something of significance to the board. I just wonder if it has the right expertise to truly be a good tool for oversight of this $55 billion fund,” Buckingham said.
The Dallas Express and Buckingham discussed the matter of SBOE having a permanent majority on the board and its responsibility for safeguarding the permanent school fund.
“As it’s currently structured, they do have the majority. They could drive the entire narrative,” Buckingham said.
Asked by The Dallas Express about where the board needs to go from here, Buckingham said:
“I can tell you that I’m going to continue to push very hard to be sure that we are in compliance with state law, that we are respecting oil and gas as the driver for funding education and our economy. I’ll do everything I can to bring the board with me.”
The Dallas Express reached out to Comptroller Hegar’s office about the guidance he offered PSF Corporation and received the following statement:
“My letter was to remind entities to use common sense and good judgment rather than legal semantics and maneuvering. These entities must operate in the best interest of their customers which is why the Texas Legislature gave impacted funds and agencies a significant time horizon to comply with the law or, if necessary, a fiduciary exemption.
“[It] served as a word of caution to operate in an open and transparent manner. If an entity needs to do business with a listed company or fund, explain why that is necessary instead of getting too cute with legal interpretations that run counter to legislative intent.”
The Dallas Express also reached out to Chairman Maynard, asking him whether there has been any tension on the board regarding his chairmanship and the structural SBOE majority.
He was also asked what he thinks about how the PSF’s transition to a corporate model has fared so far under his leadership, especially in light of CEO Timmins’ departure, and whether he will seek any fiduciary exemptions from the Texas Comptroller’s Office to continue PSF partnerships with BlackRock.
The Dallas Express received no response by the publication deadline.
“These entities must operate in the best interest of their customers which is why the Texas Legislature gave impacted funds and agencies a significant time horizon to comply with the law or, if necessary, a fiduciary exemption.”
Wrong, these entities must obey the law. Without an exemption they should have already made arrangements for movement of the investment funds. Even if exemptions were applied for, they should have a plan and time line that meets state law.
Failure to do that should lead to the arrest of the perpetrators (the executives) for violation of state law. What the hell good is a law that allows highly paid executive to violate it without personal criminal liability? They are committing a crime if they have intent to violate law.