Alan Trounson, then president of the California Institute for Regenerative Medicine, poses for a portrait at his offices in San Francisco, Monday, March 9, 2009. (AP Photo/Eric Risberg)

The former head of California's stem cell agency, which is handing out $3 billion of voter-approved funds for research, has joined the board of a major grant recipient one week after leaving his post.

Alan Trounson, the former president of the California Institute for Regenerative Medicine, has joined the board of StemCells Inc., the recipient of $19.4 million from the agency.

The agency has been grappling with potential conflicts of interest, some of which are built into its governance under Proposition 71, approved by voters in 2004. CIRM paid $700,000 for a report last year making recommendations on how to mitigate conflicts.

Trounson's move has reignited debate over the issue.

"The announcement raises serious and obvious concerns on a number of fronts," Chairman Jonathan Thomas wrote to his colleagues on the CIRM board. "Under state law, however, it is permissible for Dr. Trounson to accept employment with a CIRM-funded company. Nonetheless, state law does impose some restrictions on Dr. Trounsons post-CIRM employment activities.

Board members will be forbidden to discuss the company with Trounson for one year after his departure, Thomas wrote.

Randy Mills, Trounson's successor as agency president, said in a statement Wednesday that "in the interests of transparency and good governance we will be conducting a full review of all CIRM activities relating to StemCells Inc.

"We take even the appearance of conflicts of interest very seriously," Mills said in the statement.

Not only board members, but CIRM employees are being reminded of the conflict of interest rules.

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Stem cell boss joins board he funded