Big Environmental Group Faces Challenges After Its Leader Abruptly Steps Down

For the Nature Conservancy in Arlington, Va., the coming months were expected to be a challenge. The environmental conservation group is planning to start a new $1-billion fund-raising campaign and embark on an aggressive 10-year plan to accelerate its conservation efforts worldwide.

The efforts were seen as a return to normalcy for the conservancy, which was regaining its momentum following a 2003 investigation by The Washington Post into the group’s business practices that sparked a Senate probe and prompted the organization to restructure its board.

But with two major projects looming, employees at the conservancy arrived at work one day this month to learn of another bombshell.

The organization’s president, Steven J. McCormick, its leader since 2001, greeted its 3,500 workers with an e-mail message that morning informing them that he had decided to resign, effective immediately.

For many at the Nature Conservancy, the announcement came out of nowhere.

But for Mr. McCormick, the 56-year-old executive who had led the Nature Conservancy through those changes, the decision was deliberate and had been on his mind for a long time, even if many of those around him were not expecting it.

“There’s a lot of wear and tear on this job, and I had a really onerous travel schedule coming up,” Mr. McCormick said in an interview. “I thought this was the best time. There’s no great time. But I just think this is the best time for me and the organization.”

Interim CEO

The Nature Conservancy — the nation’s largest environmental-conservation charity — ranked No. 20 on The Chronicle‘s most recent list of the charities that raise the most from private sources, having brought in $475-million from private donors in 2005.

Mr. McCormick earned $375,000 in 2006, according to the charity’s Internal Revenue Service filings.

Stephanie Meeks, previously the Nature Conservancy’s chief operating officer, will work as interim president while the organization searches for a permanent successor to Mr. McCormick, who has agreed to work with the charity for the next year as a paid adviser to help it through the transition.

Once a new president is in place, Mr. McCormick will leave an organization that has been his professional home for more than 30 years, though it is not the first time he has attempted to move on to something else.

Mr. McCormick, in fact, had walked away from his role as director of the Nature Conservancy’s California chapter in 2000. But he was recruited to come back in 2001 after John C. Sawhill, who had headed the organization for 11 years, died unexpectedly.

Since that time, Mr. McCormick has been shepherding the organization during a period of intense growth and turmoil.

Tax Breaks

His biggest challenge was sparked by the 2003 Washington Post series that questioned the Nature Conservancy’s conservation-easements program.

The newspaper said that in some cases the charity had purchased environmentally sensitive land, placed development restrictions on it, and resold it to trustees and supporters at a reduced cost. The purchasers then gave the conservancy cash donations that were about the same size as the discount they received — an approach that allowed them to take income-tax deductions for their charitable contributions, deductions they would not have received had they instead paid the assessed price for the properties.

The Post series prompted an investigation by the Senate Finance Committee and the organization decided at that time to make a concerted push to overhaul its governance, accountability, and disclosure policies.

One of those changes included ending the practice of offering low-interest loans to help staff members buy homes when they relocated. Mr. McCormick himself repaid a $1.5-million loan he received from the organization to help him buy a house.

The Nature Conservancy also prohibited its directors, employees, and their families from taking part in land sales involving other parties related to the charity, and significantly changed its policies regarding conservation easements to make sure land included in such transactions is properly valued.

In addition, the charity reduced the size of its board from 41 to 21 members, created the position of chief compliance officer, and apppointed a committee of outside experts to make sure it was following its own ethics policies.

Mr. McCormick said he believes the organization reacted appropriately to the newspaper articles, conducting its own investigation and making substantial changes to its operations even though he believed that some of the criticism the group received was unwarranted and based on inaccurate information.

“At the time that happened, the first reaction was to be very defensive,” he said. “It was such a strong attack on the conservancy and what we stood for. But I thought a better way to respond was to take it seriously rather than confront it.”

The Senate Finance Committee, for its part, continues to monitor the Nature Conservancy and other environmental organizations that are involved with property transactions.

“We continue to see a lot of issues that give us real concern,” said a Senate Finance Committee staff member, who spoke on the condition of anonymity. “We continue to monitor [the Nature Conservancy’s] activities to ensure that they are in keeping with the reforms that were promised.”

Mr. McCormick said he is happy with the results of that process, in part, he said, because the charity didn’t lose sight of its mission. Mr. McCormick said it was important for the organization to stay aggressive in its advocacy, even though it was changing some of its practices to avoid problems.

“I realized that as a big, decentralized organization, we needed to have — and the CEO needed to have — greater systems in place to ensure that the risks we were taking were adequately evaluated, but, at the same time, we did not become more timid about taking risk,” he said.

New Efforts

Because of this approach, Nature Conservancy officials said the organization expanded significantly during Mr. McCormick’s tenure even as it was navigating its way through a scandal. The charity started new programs in Africa, Asia, Australia, and South America and spent new money on efforts to protect oceans.

“[Mr. McCormick’s] relentless pursuit of excellence at the conservancy and lifelong commitment to conservation has left an indelible mark on our organization and on the conservation of so many of the Earth’s special places,” John Morgridge, the organization’s chairman, said in an e-mail message to staff members. “He inspired so many of us to think bigger and to embrace a conservation agenda that has the potential to change the world.”

With Mr. McCormick’s sudden departure, the Nature Conservancy must now undertake its new fund-raising campaign without a permanent leader. It must also begin an unexpected search for a successor — a search that recruiters say will probably be complicated by the fact that he left his position abruptly.

“It’s unusual when we see someone just picking up and leaving,” said Brian Drum, the chief executive of Drum and Associates, an executive search firm in New York. “Any astute person coming in on that level is going to ask what happened and why he left. It’s going to create additional difficulty in the search.”

And, in yet another wrinkle, the organization in September was victimized by a computer hacker who illegally gained access to its human-resources data. The organization has found no evidence that any of its employees have been compromised and has turned the case over to the Federal Bureau of Investigation and local police.

Moving Ahead

Despite those obstacles, Ms. Meeks said she expects the organization to move forward without interruption.

“While there was a bit of a surprise, we’ve been sending the message that we want people to stay focused on the work in front of us,” said Ms. Meeks, who has worked at the Nature Conservancy for 18 years, first as a fund raiser and marketer and, most recently, as its chief operating officer.

In addition to its $1-billion campaign, Ms. Meeks said the organization plans to open a European office to help improve its relationship with the European Union on key conservation issues, begin a conservation program in Mongolia, and lead an international summit on protecting forestland.

She said she expects to play a visible part in each of these efforts, while also gauging whether she would like to be considered as a candidate for the CEOpost.

Mr. McCormick hinted that he believes the Nature Conservancy will be well served by finding a new leader from within, though he didn’t rule out the possibility of an outsider taking the job.

“The conservancy has had only one president from the outside and that was John Sawhill, and it was hard for him,” Mr. McCormick said. “It’s quite possible to find someone from the outside, but they will have to become well steeped in the culture of the Nature Conservancy very quickly.”