In the financial arena, the term “due diligence” is frequently used to acknowledge and express concern for safekeeping of valuable resources – cash, commodities, stocks, bonds, etc. Those qualified as “fiduciaries” are entrusted with management of such assets in the best interests of clients.
Due diligence is also reflected in other areas of business and commerce. This system of analyzing risk and reducing elements of danger can be applied to administration, human resources, taxes, intellectual property and environmental concerns as well. The process of analysis, risk assessment, fact checking, monitoring and progress depends on faith in those entrusted with essential services and valuable documents or items. When monitoring progress, the need for corrective action is a prime factor to continue and remain on course.
There is nothing new about the use and terminology of due diligence. Its roots, as “requisite effort,” can be traced back to the 15th century and possibly even earlier. Although a legal definition emerged centuries later, the meaning remained essentially the same: protection – public or private – from harm by others.
While obvious when dealing with money and property transactions, organizations also have fiduciary responsibilities when managing their operations. If financial fiduciaries are unsuccessful, it can be readily visible and apparent, reflected by losses in a profitable marketplace or legal complications. However, in the public and service sector, clarity can be subject to interpretation and subjective evaluation.
The recent separation of the City of Fremont from (now former) City Manager Mark Danaj is a conundrum that requires close inspection and evaluation of the city’s system of due diligence. Leaving Fremont for the top management position as City Manager in Manhattan Beach [Southern California], his tenure there lasted just shy of four years. In a contentious termination, Danaj was able, through a network of public employee associates, to hopscotch to a temporary position with the City of Santa Clara en route to another top position… Fremont City Manager.
Irrespective of other considerations such as salary and benefit incentives, the selection of a former employee, embroiled in a controversial termination situation, seems a bit odd… especially when considered for the very same position. While personnel matters are, by their nature, shrouded by legal restrictions, the selection process in this case bears scrutiny. Why was Danaj selected?
The Separation Agreement between the city and Danaj specifically forbids full disclosure of any details, allowing only the statement, “DANAJ resigned from City service effective September 30, 2021 and the departure was settled in a mutually acceptable manner.” With little detail allowed to surface, it is incumbent on Fremont councilmembers to restore trust and faith in their hiring practices.
It is unfair to residents and other employees alike to accept such abrupt, drastic negative action with little or no explanation and include a lavish financial reward to boot. Closed council meetings to discuss Danaj were held September 21 and 28, a period on one week. At the latter meeting, his resignation (termination) was accepted unanimously. The short timeframe of meetings and separation is an indication of a specific precipitating incident or event. With time, some details may emerge from the agreement’s legal web, but until then much relies on trust in sitting councilmembers.
Until the truth is revealed, it is essential for current councilmembers to conduct a search for a new city manager with transparency and candor. Due diligence has been around for centuries, but its practice is often problematic. Let’s hope that city staff and council respond to this management debacle with renewed dedication to the hope and promise of due diligence.