Sal Orlando, Assistant News Editor
VCU Health System will remove university President Michael Rao as chair of its board of directors as part of leadership changes recently approved by Gov. Abigail Spanberger. Rao will still serve as president of VCU.
The change follows a failed redevelopment plan that cost the health system nearly $80 million, according to a previous report by The CT.
The VCU Health System Board of Directors governs the academic health system, patient care, teaching and medical research, according to Virginia law. The law previously required the president of VCU to also serve as the chair of the VCU Health board.
The newly signed legislation, patroned by Del. Betsy Carr and Sen. Lamont Bagby, D-Richmond, also reduces the number of members on the board from 21 to 16, lengthens their terms from three to four years and requires an election every other year for the chairman and vice chairman of the board. Bagby is also a member of the board.
The law will take effect starting July 1.
Former Gov. Glenn Youngkin vetoed the same proposal last year, citing “a material and unnecessary shift in the governmental balance of powers, changing the board from a majority of executive appointments to a majority of legislative appointments.”
The vetoed bill included an amendment that certain appointed members would need to demonstrate expertise in finance or commercial real estate, which the recently signed bill does not include.
Youngkin called for Rao to step down as president of MCV following the failed redevelopment deal, stating he wanted someone “with the experience and time commitment” to lead the health system, according to a previous report by The CT.
Rao stated that he is grateful for the evolution of the VCU Health board, and the change in law that no longer requires the VCU president to also be the VCU Health board director.
“I believe that our VCU Health board requires a chair who can be 100% devoted to the health system,” Rao stated. “This change makes us similar to our sister institution, UVA, and many other universities with large health systems, where the university president is not required to serve as chair.”
Changes to the board were previously recommended by Virginia’s Joint Legislative Audit and Review Commission in a report on leadership structure following the failure of the Clay Street Project.
VCU Health signed a multi-million dollar lease in 2021 to turn the city’s former Public Safety Building into a 17-story office building for MCV, according to the report.
Poor site conditions and rising costs after the Covid-19 pandemic halted the construction and led to VCU Health paying the city $72.9 million to exit the deal, and $5 million to demolish the site, per a previous report by The CT.
The former VCU Health CEO Art Kellerman raised concerns about project risks prior to signing the lease, but Rao had emphasized the importance of obtaining the building, according to the JLARC report.
Kellerman had the authority to decline the lease, but “sought direction from the VCU president.”
VCU Health representatives thanked elected officials for their support in a statement, adding that they “look forward to setting the board of directors up for success in the future.”