Stem Cell Agency Board Sticks with More Financial Disclosure

The governing board of the $3 billion California stem cell agency today rejected a proposal that would have restricted transparency surrounding the financial interests of its directors and top executives.

On a unanimous voice vote, the board decided it would stick with the more complete disclosure rules that it has operated under since 2005. CIRM staff had offered changes that would have narrowed the amount of economic information that the board members and the executives would have been required to disclose.

The directors' Governance Subcommittee, however, on May 3 rejected the plan. Sherry Lansing, a former Hollywood film studio CEO and chair of the subcommittee, said at the time,

"I personally feel strongly that because of CIRM's unique mission and the agency's incredibly long-standing commitment to transparency, i believe that we should continue to set an example by requiring the broadest disclosure for members of the board and high level staff."

Retention of existing disclosure rules comes at a time when more conflicts may arise. The agency is moving to engage the biotech industry more closely as it pushes to develop stem cell therapies. Already one case of conflict has arisen this year dealing with industry. It involves a "special advisor" to CIRM who was nominated to become director of a firm sharing in a $14.5 million grant. She also was working for the firm. (See here and here.)

The CIRM board also has built-in conflicts of interest, written into the law by Proposition 71, which created the agency. About 92 percent of the $1.3 billion awarded so far has gone to institutions tied to members of the CIRM governing board. Board members are not permitted, however, to vote on or discuss grants to their institutions. But it is fair to say that if California voters had foreseen that nearly all of the grants would have gone to directors' institutions, they would not have approved creation of the stem cell agency.

As the California Stem Cell Report remarked earlier, it is a good move for CIRM to retain more transparency rather than less. As one of the Moss Adams staffers said today – in a different context – during the presentation of the first-ever performance audit of CIRM,

"When people have to fill a void in information, they assume the worst."