College leaders who serve on corporate boards are “part of a cozy and lucrative club,” according to a major article in The New York Times. While academics can bring fresh perspectives and the imprimatur of their universities to boards, the article said they face competing time demands and the possibility of being dragged into a corporate scandal. Some experts also questioned whether academics, who typically lack business experience, have been good fiduciaries for companies.
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8 Responses to ‘New York Times’ Questions Value of College Leaders’ Service on Corporate Boards
alan_kors - August 2, 2010 at 4:19 pm
I’m glad that the Times is airing this issue. At my university, Penn, for example, our president sits on the Board of Directors of Vanguard Funds. This strikes me, in a moral sense, as a conflict of interest: ultimately, the president would have great direct or indirect influence over which families of funds are chosen for faculty and staff retirement plans (Vanguard is currently one of two, along with TIAA-CREF). Also, although being named to the Board was due to her being president of Penn, I would be surprised if the compensation were not paid wholly and directly to her. To be fair, she sits on far, far, far fewer corporate boards than Judith Rodin did. It’s all a bit unseemly and provides incentives of a non-scholarly nature. Does she no longer believe what she herself wrote in *Democratic Education*: “the stake of scholars and citizens in the autonomy of the academy is great”?
11172674 - August 2, 2010 at 4:49 pm
I believe that I read recently that the outgoing President of the University of Virginia, John Chasteen, has been named to the Board of one of the leading tobacco companies in America. This strikes me as very inappropriate.
bearjimmy - August 2, 2010 at 8:44 pm
Ruth Simmons, President, Brown University, one of the Ivys formerly sat on the Goldman Sachs (GS) board. Talk about egg all over a University’s face with the GS mess in the financial industry. Moreover, GS owns a large for-profit group of colleges and universities, while hardly anyone on the Brown campus knew about that part of President Simmons’ work at GS.
honore - August 3, 2010 at 8:17 am
Her speech writer will get a work out now.
honore - August 3, 2010 at 8:24 am
Meanwhile, the trough gets more crowded, that is until the next sanitized press release touting…”President Simmons has resigned and will now be able to spend more time with her (fill-in-the-blank), knowing she left an unforgettable legacy at Brown”. Ohhhhhh, the arrogance.
ftrachtenberg - August 3, 2010 at 8:58 am
Might we have a few words from you all about professors who consult to profit making corporations. What are the pros and cons vis a vis presidents who sit on boards?
alan_kors - August 3, 2010 at 12:27 pm
To ftrachenberg…. It’s not my case—no one wants me—but I should assume (or, at least, hope) that profs consult for remuneration on the basis of their areas of expertise. I doubt deeply that these Ivy presidents have any expertise—there could be exceptions, of course—in the areas in which they serve on boards. The title, not the expertise, makes them attractive, and, as noted, there may well be conflicts of interest in terms of business done with the university (as in the case of serving on the B of D of a family of funds that is one of two limited choices that your institution offers to its faculty). On the other hand, of course, presidents could truly reach for the stars and become coaches.
esselan - August 3, 2010 at 2:38 pm
The arguments against academics on corporate boards strike me as disingenuous. Why then is it okay for corporate leaders to sit on the boards of academic institutions?