The chief executive of PLATO Learning stepped down Nov. 17, leaving ed-tech insiders to question what his abrupt departure will mean for the company’s 20,000-plus school customers.
After meeting with the company’s board of directors, John Murray, who served as president, chairman, and chief executive officer of the company since he took the helm in 1994, agreed to relinquish all three titles and his seat on the company’s board, effectively cutting all ties between himself and the Bloomington, Minn.-based firm.
Current PLATO board member and former NCS Pearson boss David Smith has assumed Murray’s duties as interim CEO, a position encompassing the duties of president as well, until a replacement is found. Board member Thomas Hudson has taken over as interim chairman. Murray reportedly will stay on as a consultant during the transition.
The move came just one week after the company’s chief financial officer tendered his resignation and PLATO executives announced the educational software provider would miss its earnings targets for the fourth quarter and fiscal year.
But sluggish earnings haven’t been the only thorn in PLATO’s side recently. Ethical questions also have been raised about the company’s aggressive courtship of school districts, including its apparent ties to at least one high-level district employee.
In September, the Baltimore Sun reported the company provided Prince George’s County, Md., Public Schools CEO Andre Hornsby with a 10-day, all-expenses-paid trip to South Africa. The trip, which reportedly took place in July 2003, was organized by the National Alliance of Black School Educators (NABSE), of which Hornsby was president.
As NABSE’s corporate sponsor, PLATO–which was seeking a bid for a district-wide contract in Prince George’s County at the time–footed the bill for the trip. School board officials said Hornsby informed them of the trip but never disclosed it was being paid for by PLATO. According to the Sun, Hornsby went on the trip again this past July, despite having stepped down as president of the alliance.
PLATO spokeswoman Terri Reden said it was NASBE’s decision to use a portion of PLATO’s sponsorship to finance the trip for members of its leadership. She also said Hornsby paid for the second trip out of his own pocket.
In a January ethics disclosure form obtained by the Sun, Hornsby said that during his time as president of the alliance he never accepted gifts or money from companies doing business with the school district. The Federal Bureau of Investigation and the Maryland prosecutor’s office have opened probes into Hornsby’s dealings with PLATO and other companies with ties to the district. A Prince George’s County School Board ethics panel cleared Hornsby of any wrongdoing in December.
PLATO executives said the change in leadership had nothing to do with any suggestion of impropriety by the company. Reden also denied speculation that the move was made to halt two consecutive years of losses for the company.
Though the board “has been somewhat disappointed with the company’s earnings,” Reden said, PLATO is performing well compared with its competitors–and losses are a reality of the current fiscal climate.
According to Reden, both the board and Murray felt it was simply a “good time to bring in new leadership that could help get the company to the next level.” She said the change would have no effect on any of the services PLATO currently provides to its school customers.
During his tenure, Murray served as the chief architect behind several high-profile contracts and mergers, including the company’s acquisition last year of Lightspan Inc. He also played an integral role in inking a $22 million deal to provide software, support, and computerized instruction for students across the state of Idaho.