California voters bet big on stem cell science in 2004 with Proposition 71, which authorized the state to invest $3 billion to jump-start a new segment of the state's biotech industry. The money was to be directed to certain types of embryonic stem cell research that had been fenced off from federal dollars. The $3 billion comes from the sale of bonds to be repaid by taxpayers – with interest, about $6 billion.

In its short life, the California Institute for Regenerative Medicine has made grants of $700 million for new laboratories, training and basic scientific research, drawing scientists from around the world to establish California as the epicenter of stem cell research. CIRM has used California's borrowing to leverage an even greater amount of grants, donations and other money, more than $900 million. This foundation-building phase marks the end of the first chapter of the state's stem cell experiment.

Fulfilling the voters' goals for Proposition 71, however, will remain difficult as the California Institute for Regenerative Medicine moves forward with its agenda to fund work that translates research into new medical treatments to fight disease. A key obstacle is Proposition 71 itself.

The Little Hoover Commission's report "Stem Cell Research: Strengthening Governance to Further the Voters' Mandate" found that the 10,000- word proposition is overly prescriptive, resulting in a governance structure for CIRM that locks in inefficiencies. While many of the original governance provisions may have been appropriate to protect a developing organization when stem cell science was under siege, the specificity of the requirements in Proposition 71 now inhibits CIRM's ability to adjust to changing scientific and political landscapes, and the agency remains vulnerable to perceptions of self-interest that detract from CIRM's mission.

The institute and its governing board have functioned as well as they have because of the talent and extraordinary commitment of the members. Moving forward, the stakes are too high to take structural weaknesses for granted.

As CIRM exits its startup phase, it is unclear whether the founding leaders on the governing board can objectively evaluate the best course for CIRM's future, including the crucial question of whether it should exist beyond its initially intended 10 years. Given that the longer-than-normal terms on the governing board limit turnover, current board members – whose organizations have received 80 percent of the research and facilities grants – may lack the independent perspective required to determine when CIRM's contributions to stem cell science have peaked.

The institute's leaders are pushing for permanent status with plans for a loan program to biotech companies, backed with stock warrants, that could provide continuous revenues. CIRM's chairman told the commission about his desire to ask voters to extend CIRM's life span through another bond measure. The race toward cures demands that CIRM's governance structure be adequately equipped to oversee this evolution.

The commission found that improvements to CIRM's governance structure are needed to speed its success and provide adequate accountability and transparency. These needed improvements include:

• Reducing the governing board from 29 to 15 members, shortening terms to four years and introducing fresh voices by adding independent business and scientific members.

• Clarifying the roles and responsibilities of the board chair and president, so that the chair serves in an oversight and strategic planning capacity, and the president manages day-to-day operations.

• Removing caps on the size of CIRM's staff and outside scientific peer reviewers while retaining the limit on expenditures.

• Developing a course for the agency's future when bond funding expires – one that is laid out clearly and succinctly for the public to evaluate.

In developing its recommendations to strengthen CIRM's governance structure and improve transparency and accountability, the commission sought to avoid the need to go back to the voters. The commission's recommendations are designed to be implemented by CIRM's board, and where that is not possible, through legislation that can change existing statutes to, in the words of Proposition 71, "enhance the ability of the institute to further the purposes of the grant and loan programs created by the measure." Commissioners voted 8-1 to adopt the report, with Sen. Dean Florez, D-Shafter, opposing. The recommendations are designed to start discussion.

One early response, from CIRM board member Jeff Sheehy, is encouraging: "I wish the report by the Little Hoover Commission could be perceived and advanced as the beginning of a dialogue about governance structures that results in the strengthening and institutionalization of CIRM and sets it on a path toward a long and fruitful existence."

California's stem cell agency needs to evolve its governance structure to ensure it can deliver on its ambitious mission to deliver cures as well as provide the transparency and accountability California's taxpayers deserve.

Daniel W. Hancock is chairman of the Little Hoover Commission, a bipartisan and independent state agency. To obtain a copy of the report "Stem Cell Research: Strengthening Governance to Further the Voters' Mandate," go to www.lhc.ca.gov.