Penn State trustee John Surma juggles tough roles


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U.S. Steel Chairman and CEO John P. Surma bleeds blue with the best of them.

His Nittany Lion credentials include a Penn State accounting degree, playing for the school's club hockey team, serving on the board of trustees since 2007, and pledging $5 million to the Smeal College of Business, where the deanship is named after Mr. Surma and his wife, Becky.

Now his credentials include announcing that a child sex abuse scandal that has rocked Penn State's vaunted athletic program, resulting in the resignation of university president Graham Spanier and the firing of iconic football coach Joe Paterno.

The announcement was all the tougher because Mr. Spanier has been on U.S. Steel's board of directors since 2008. It is a relationship that some say raises questions about Mr. Spanier's ability to be an independent advocate for U.S. Steel's stockholders.

"You could just see it in his face that it was a very difficult situation for John," said Smeal Dean James B. Thomas, who watched Wednesday night's news conference on television.

Mr. Surma was elected vice chairman of Penn State's board last year. The university's troubles come as Mr. Surma faces considerable challenges managing the world's eighth-largest steel producer. U.S. Steel has posted profits in only two quarters since the final quarter of 2008, when a global recession obliterated demand virtually overnight. The company's shares hit a two-year low last month, sparking speculation that the company founded by Andrew Carnegie is vulnerable to a takeover.

Mr. Surma has his hands full at Bank of New York Mellon as well. Chairman and CEO Robert P. Kelly resigned abruptly in August, citing differences of opinion with the board over managing the bank. Mr. Surma has been on BNY Mellon's board since 2007 and was a director of Mellon Financial from 2004 until its merger with the Bank of New York. BNY Mellon also faces a raft of lawsuits from governments and large investors who allege the bank overcharged for foreign currency transactions.

Whether it is in the corporate board room, on Penn State's campus, or at the suburban hockey rink where Mr. Surma laces up regularly, those who know him say the McKees Rocks native has a quick, disciplined mind and is poised, articulate, compassionate and sincere.

"He is also very principled, which is another great value he brought to the board," said Calgon Carbon chairman, president and CEO John Stanik.

As an accountant for Price Waterhouse, Mr. Surma was the firm's lead auditor at the Robinson environmental services firm. He was on Calgon Carbon's board from 2000 to 2008.

"There isn't anyone in business that I respect more than John Surma," Mr. Stanik said. "He has a very special business mind."

Bob Prah said he is no cheerleader for Mr. Surma. But as president of United Steelworkers Local 1557, he was impressed when Mr. Surma showed up at the Clairton coke plant after an explosion injured 20 workers there in July 2010.

"He seemed genuinely concerned for employees," Mr. Prah recalled. "That was my impression after meeting him. He definitely seemed real."

Mr. Surma was named a director of the National Safety Council last month, adding to a list of board memberships that includes the Allegheny Conference on Community Development, the Allegheny County Parks Foundation and the American Iron and Steel Institute.

Facing a pack of news hounds bellowing questions Wednesday night was a new experience for Mr. Surma, who is accustomed to business reporters inquiring about unfair steel imports, China's currency manipulation and government regulations. Unlike those questions, there were no stock answers for what came up during the 20-minute press conference. At times, Mr. Surma smiled wanly, frustrated as reporters shouted questions over one another and repeated questions in the hope of getting an answer he could not or would not give.

"I thought he was very much in charge of the situation and it wasn't a surprise," said Smeal accounting professor Mark Dirsmith, who has known Mr. Surma for more than 30 years.

"He is someone who can handle difficult situations. He has very good clarity of thought," Mr. Dirsmith said. "He's extremely bright, one of the brightest people I know."

Mr. Thomas, the business school dean, refereed hockey matches Mr. Surma played in as a Penn State student. The dean described the future steelmaker as a player who was "scrappy, quick and always thinking ahead."

"In some ways, that is why he is valuable as an executive," Mr. Thomas said.

The U.S. Steel executive's love of hockey recently led him to invest $2 million in the Pittsburgh Penguins of the National Hockey League. He was elected to Penn State's Icers Hall of Fame in 2005, six years before Penn State Athletic Director Tim Curley was honored. Mr. Curley has been charged with perjury for giving false information to a grand jury about a 2002 incident involving a child.

Mr. Surma is not the only Penn State athlete in the family. His brother Victor and Victor's son were one of more than two dozen father-son combinations who played under Mr. Paterno.

The U.S. Steel CEO skates regularly as a defenseman in an over-30 hockey league at the Ice Castle in Castle Shannon.

"Even at his advancing age, he's a pretty good player and I can't stand it. It irritates me that I can't burn him," said David Klink of Bethel Park, who has played in the league for 20 years.

Mr. Klink called Mr. Surma "one of the guys."

U.S. Steel did not respond to questions about whether Mr. Spanier's resignation over the child sex abuse scandal will affect his membership on the steelmaker's board. Cross directorships, where executives of two companies serve on each other's board, raise questions about the ability of both directors to do their jobs.

Mr. Surma's $5 million gift to the business school could cause U.S. Steel shareholders to question whether Penn State's former president can provide independent, objective advice, said Charles Elson, a corporate governance expert at the University of Delaware.

"Cross directorships affect your independence. They don't affect your competency," Mr. Elson said.

"They're both in a very awkward position."


Len Boselovic: lboselovic@post-gazette.com or 412-263-1941.


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