January 23, 2009

Trust Is No Substitute for Due Diligence

To the Editor:

The single biggest lesson of the Madoff case is that trust can never be the sole basis for investment ("What College Trustees Could Learn From the Madoff Scandal," The Chronicle online, December 18, 2008). Many institutions have leveraged the personal connections of board members and alumni to invest in opportunities for which they might otherwise lack the access, expertise, or resources. This can be a very successful approach, as long as you have absolute confidence