Calling the Corporation to Account
Posted on December 12th, 2009 in Uncategorized | 59 Comments »
In today’s Globe, Harvard profs Harry Lewis and Fred Abernathy take a public stand against the Secret Seven—the Harvard Corporation.
IF AN ORDINARY corporation had the kind of fiscal year Harvard University just had, some of its directors would be gone. Long-term investments down $11 billion; another $1.8 billion lost by top management speculating with cash accounts; another half-billion gone in an untimely exit from a debt rate gambit. The institution left so illiquid that it was forced to sell assets and issue bonds at the worst possible time, just to pay the bills. A publicly held company would have experienced a shareholder rebellion - especially after the Globe reported that the chief investment officer had repeatedly warned the president about the risks he was taking with the institution’s cash.
But the Harvard Corporation is legally answerable to no one….
Lewis and Abernathy take readers through the origins of Harvard’s fiscal disaster (and make no mistake, it is a disaster): the massive spending increases, the assumption that the endowment would always enjoy double-digit increases, the move to deficit spending, enormous expansion commitments, the lack of a “Plan B”—what to do if optimistic economic projections didn’t pan out.
We all know the consequence: a diminution of Harvard’s excellence.
And while taking an oblique shot at Larry Summers here and there, Lewis and Abernathy keep their eyes on the prize: the Secret Seven, appointed in secret, working in secret, in ways that no public board of directors would be allowed to operate.
The Harvard Corporation is a dangerous anachronism. It failed its most basic fiduciary and moral responsibilities. Some of its members should resign. But the Corporation’s problems are also structural. It is too small, too closed, and too secretive to be intensely self-critical, as any responsible board must be. Until the board can be restructured, the fellows should voluntarily share their power with the overseers. And Harvard should reveal the risks of its business plans, as would be required if it were a publicly held corporation. That exercise in transparency would surely serve Harvard well.
Kudos to professors Abernathy and Lewis for engaging in the type of honest, candid discussion about institutional flaws and challenges that is all too rare at Harvard.
Now that someone has dragged the 800-pound gorilla into the public square, the question becomes: What happens next?
And how, I wonder, will the Corporation respond?
59 Responses
12/12/2023 1:18 pm
Well, as I have stated before in this blog, it is really up to DF to act like a CEO and reorganize the composition of the other six. She has more ammunition than is necessary to accomplish the task. The risk of seeking resignations is real, but really quite small. Harvard cannot maintain any of the high ground in matters of governance and accountability if DF fails to act. It has now been a full year since the crisis unfolded. The President’s window of opportunity is closing. This is her moment to provide the solution; otherwise, in my opinion, she will shortly become part of the problem.
12/12/2023 1:19 pm
Excellent piece! It rarely happens that people with power voluntarily cede some of that power unless confronted by some palpable threat. The Corporation is unlikely to respond to the Abernathy and Lewis op-ed. Doing so would be a sign of weakness. However, if the criticisms resonate with some of Harvard’s “deeply loyal friends”, the Corporation may be moved to make some gesture-nothing substantial mind you unless absolutely necessary-to reassure these donors that all is well. They will no doubt argue that the op-ed authors are pursuing a personal vendetta. I hope the donors eventually see through the Corporation’s exculpatory line and that their loyalty to the university trumps their ties to members of the Corporation.
12/12/2023 1:44 pm
The piece in the globe is very good. Thank you, Fred and Harry, for drawing attention to three important issues. (1) Summers and the Corporation approved very irresponsible spending plans. (2) The plans depended so much high endowment returns that the HMO was under pressure to take excessive risk. (3) The deep issue is poor governance at Harvard, which is directly attributable to the Corporation. The Corporation is the only body charged with real governance and it has no mechanism for staying informed, getting feedback, or changing course when a mistake has been made.
12/12/2023 1:52 pm
I do not see that DF would have the courage to change the way that Harvard is governed, even if she had means readily at her disposal.
This same Corporation picked DF. They did do despite the fact that they knew, already, that DF lacked courage, vision, and financial knowledge. (If you were one of those who spoke to the Corporation members during the search for the new president, then you know that they had been told such things about DF repeatedly. They were fixed on picking DF and were ready with “comebacks” because they’d heard the concerns about her so often. A more open search process would have resulted in a better president.)
During the Summers period, DF never stood up for the university’s interests. She worked quietly on her own behalf, using events to wiggle herself into position to be promoted under Summers. She did not help in any way to force his resignation. She just quietly took advantage of the situation. Is this the sort of person who is going to exhibit courage and leadership in a crisis? Obviously not. It does not matter that the current crisis is a very different one. Lack of character tells.
12/12/2023 1:54 pm
This piece in the Globe demonstrate that Fred and Harry understand the responsibility that the faculty bears for Harvard’s deep crisis, in it’s failure to act and to denounce the irresponsible practices of President and Corporation in the past.
The next step is to the faculty to step up and demand a changed governance role, and a reshaping of the composition of the Corporation. A crucial question is what side will DF be on in the battles likely to ensue. This is her opportunity to do something courageous and truly make history. We will see whether she has what it takes to do this.
12/12/2023 2:14 pm
Rumor has it that DF was the only candidate left after others had asked not to be kept in the running. Everyone knew that she did not have the kind of broad administrative experience necessary for the job. She has retained a very low profile on almost every front since she took over the presidency, and her response to the current financial situation has basically been to roll over and comply with what the Corporation has expected her to do.
This is a “historical moment,” as she when she was in Africa recently (many thanks to the person who quoted this speech of hers a little while back in this blog), and she is a historian by profession. One would hope that she would show a little more backbone now. Are we to believe or not that there is such a thing as the “lesson of history”?
12/12/2023 3:17 pm
Let me agree with both 1.54 and 2.14, but also disagree just a bit.
DF was the only candidate left in the running after others backed out, but they backed out because they met with the Corp and did not like what they heard. For instance, John Etchemendy (Stanford Provost) apparently came out of meeting with Corp dismayed.
Also, faculty must step up and demand a change in governance, yes, but think about what they learned under LHS. Those who stepped up took a hit. Those who were collaborators or who remained silent prospered. The faculty were unfairly portrayed in the press. One would like to see faculty stand up again with the same integrity, but they’ve seen the paltry rewards.
12/12/2023 3:52 pm
what did they hear that thyey didnt like?
12/12/2023 3:58 pm
Who took a hit, 3:17?
Quite right about LHS manipulating the press, but any change in the Corporation would presumably happen in a much quieter way, as with “Pug” Winokur.
12/12/2023 6:49 pm
“those who were collaborators or remained silent prospered”
how very true 3.17pm. Shows that the structure of power and interests that prevailed during LHS time remained unaltered afterwards. This structure included the corporation, but also the entire office of the President and Provost and all the middle management that proliferated in every school and that now runs the university.
HL is wrong. Even if the six resigned little would change at Harvard. The university is now hostage to a structure of bureaucratic governance that will destroy the university before relinquishing its power.
12/12/2023 6:57 pm
I’ve heard that several presidents of other universities have held meetings with members of the corporation… more are scheduled this month and early in january… since the meetings have not included DF sounds like a search of sorts is emerging… conversations are about Harvard, present challenges, the future, thoughts on how to address them…
12/12/2023 7:14 pm
Harry, you graduated in 68. What were you doing when the students took the office of the president?
Here’s the report of the overseers of those events:
http://www.thecrimson.com/article/1969/9/22/the-overseers-look-at-harvard-brbrbthe/
In those days faculty and students did have principles, and the courage to stand by them. Not sure there are many like them today.
12/12/2023 7:16 pm
Yeah, I heard that too. I think it was in the check-out line of Whole Foods. Or was it Starbucks?
12/12/2023 7:16 pm
The student strike was in 1969
http://oasis.lib.harvard.edu/oasis/deliver/~hua06002
12/12/2023 7:30 pm
Anyone who thinks that getting Rubin to resign from the corporation would help solve matters misses the profound nature of the challenges described by Harry Lewis in his article today.
Conrad Harper resigned over his conflicts with LHS. What difference did this make? (other than helping Harper get better sleep after resigning)
http://www.boston.com/news/local/articles/2005/07/29/harvard_corporation_member_resigns/
12/13/2009 12:23 am
I agree with 6:49 pm that the Corporation isn’t the only problem. Certainly, the concentration of power in Mass Hall accomplished through a series of strategic moves and appointments, each of which eroded the autonomy of Harvard’s academic units, would need to be reversed. Such a reversal is not going to happen unless the Corporation’s role in Harvard’s governance is significantly changed. Ergo, Abernathy and Lewis are correct.
12/13/2009 8:10 am
The only hope for Harvard’s future is in its students, graduates and (perhaps) in its faculty. Will they be able to organize effectively to understand the gravity of this crisis? seems unlikely.
12/13/2009 9:17 am
Feste, yet again you show yourself to be incapable of writing a non-pompous sentence.
12/13/2009 10:40 am
Going back to what Anonymous 3:17 pm said about the faculty who criticized President Summers, I would say that indeed, one quite striking effect was that we were “unfairly portrayed in the media.” It was well-nigh impossible to get the press to report fully and accurately on what we told them about our motivations. Frustrated by the press’s constant attempts to make me appear like a radical-left virago, I ended up sounding boringly serious in one quite sympathetic TV interview, where I just looked like a rather dreary grandma expressing “disappointment” in President Summers’ actions. Of course, I *am* a grandma: but I’m Grandma Judith!!
12/13/2009 12:00 pm
And as long as I try to suggest that I may not always be dull, let me also say that I disagree with Anonymous 9:17 am’s description of Feste as a writer of pompous sentences. Whatever your view of the style, though, Feste’s most recent post makes a valid point. Let’s focus on the content here.
12/13/2009 1:05 pm
Pompousness is content, Judith. Look carefully at Feste’s posts. The one at the top is speculation: what might or will happen. Then the bottom one: “Certainly, the concentration of power in Mass Hall accomplished through a series of strategic moves and appointments, each of which eroded the autonomy of Harvard’s academic units” . Feste never gives evidence or facts. Once RT called him on it, and asked him to give an example of the explosion of staff in the provost’s office. Feste said Look at the provost’s website. RT didn’t buy it, and asked again. Then Feste came up with a single minor recent posting that probably came from the HIRES website. “Ergo,” as Feste might (does!) say, I don’t take him seriously as a n inside contributor to this blog.
12/13/2009 2:03 pm
Bloody hell, I do seem to annoy Anonymous 9:17 am/1:05 pm.
Richard wrote: “And how, I wonder, will the Corporation respond?” In response, I speculated on how I thought they would react. I can’t provide evidence or facts about what the Corporation is doing or will do.
The facts and evidence regarding the concentration of power in Mass Hall can be found in a book I highly recommend, “Harvard Rules”.
Regarding the continuing expansion of the Provost’s office, no one said staff were exploding (which would be messy). I was asked to give an example that the Provost was still adding staff at a time when cuts are being made elsewhere. I did give an example. A “minor” example perhaps, but an example nonetheless.
The facts and evidence I personally have at hand can’t be mentioned without revealing my identity and costing me my job. I’m a fool, but I’m not stupid.
I have no desire to be considered an “inside contributor” (whatever that means). I’m not the subject under discussion, so do please try to stay on topic. If my style offends you, skip those from me, or try complaining to Richard to get my posts blocked.
12/13/2009 2:07 pm
Or her. 8:10 am: Don’t forget Overseers, who are most connected to alumni, were activated by the (not perhaps) faculty last time change occurred, and who are best positioned for pushing structural change.
12/13/2009 2:42 pm
An admirably restrained response to mine-well done, Feste.
12/13/2009 2:50 pm
A very graceful response on your part, too, Anonymous9.17 etc.
RT is right concerning the Overseers. And I’ll try to cheer up with regard to press coverage. There do seem to be some rays of light in that respect.
12/13/2009 6:09 pm
Feste, I disagree with your prediction that, were the Corporation to respond to the criticism it would be “nothing substantial mind you unless absolutely necessary–to reassure these donors that all is well.”
What do you think would be the likely impact of a letter addressed to alumni and friends of the university, and signed by 30-40 faculty, echoing the criticism raised in the op-ed, and asking for a witholding of all gifts to Harvard until significant changes in governance take place?
12/13/2009 6:36 pm
If anyone in the president’s office or in the corporation thinks of discrediting Abernathy and Lewis they better think again. Such strategy would backfire and get more faculty to close ranks behind them.
12/13/2009 6:46 pm
The tactics to influence changes in governance through changes in donor practices have been used in the past, successfully:
http://www.thecrimson.com/article/2009/6/2/1984-senior-gift-meets-world-politics/
12/13/2009 6:51 pm
Five new overseers were recently elected, already at the time of the downfall
http://news.harvard.edu/gazette/story/2009/06/harvard-board-of-overseers-election-results/
12/13/2009 7:12 pm
Anonymous 6:09 pm
You’re asking me to engage in speculation. Nice try, but I’m not falling for it.
Anonymous 6:36 pm
The Corporation/Mass Hall/whoever won’t put forward publicly the argument that Abernathy and Lewis are disgruntled employees. But that’s what they’ll probably say in private to big donors who happen to ask about the matter.
12/13/2009 7:22 pm
Yes Feste, you are probably right that in private there will be attempts to destroy Abernathy’s and Lewis’ character. Unless, of course, other faculty come forward and endorse what they have said. Even the most naive donors would have reason to wonder about an epidemic of disgruntled employees.
12/13/2009 8:08 pm
I doubt that anyone in any office is thinking of trying to discredit Fred Abernathy or Harry Lewis (full disclosure: friends of mine), or “destroying their character”, which can only be done from the perspective of a higher character, so that’s not going to work.
I don’t know any faculty who wouldn’t privately endorse the points of view of the op-ed, as I obviously did semi-publicly in the last post on “Buh bye Allston”, and do so now under my full name. My guess is the issues raised by the op-ed aren’t going away any time soon. Without much effort three of us were recently able to get over 100 faculty signatures to protest the decline of the libraries which occurred over the last decade, and will continue in part because of poor fiscal management, debt-financing of buildings, etc., as the op-ed points out.
Although there was much talk about the “global economic situation” being the sole cause for Harvard’s downturn, everyone now knows that the poor governance structures, along with individuals within the highest governing board, were contributors to the downturn, and to the fact that Harvard is a diminished institution. Faculty SHOULD be pissed off about that, and should want change, since it is our libraries, labs, graduate cohort levels, and yes, salary, that have been affected by the behavior of our leaders.
It will be interesting to see what public faculty support there will be for any faculty/alumni/student calls that would echo the op-ed. More than might have been the case a few years ago, I would guess. Time will tell
12/13/2009 8:18 pm
it is interesting that the Dean is thinking of reinstituting meritorious salary raises -but not the 3% inflation raise-. A nice way to retain control over whose salaries increase or not.
I would guess that the salaries of those most active on this blog may not be amont those receiving a merit increase.
12/13/2009 8:40 pm
OMG, you mean by writing on this blog I may not get a raise! Why didn’t someone tell me that was going to happen? I would never have said all the things I’ve said here.
Inflation well below 3% last time I checked, s.r.
12/13/2009 8:54 pm
Very depressing, some of these comments here: about friends of the Corp badmouthing Lewis and Abernathy, or the dean rejecting raises for RT-HL-JR… do these posters really believe Harvard adminstrators are so petty and small?
12/13/2009 9:00 pm
I agree, visionary, and should have said so directly.
12/13/2009 9:22 pm
Many of those who challenged Summers and his regime know too well what he could do to his adversaries. As most of those who advised the President still work in that office, it may be prudent for Abernathy and Lewis to be prepared for some payback.
12/13/2009 9:33 pm
Summers effectively got Harry Lewis removed from his deanship (pity for all of us), got Rick Hunt removed as Univ. Marshal, me rotated off the Commencement Orations Committee with its 30+ hours of uncompensated work, etc. etc.. Otherwise he couldn’t do that much to tenured faculty, which he found frustrating. I just don’t believe that attitude outlived him and his Dean, and would need evidence beyond anonymous stuff like this. What sort of payback?
12/13/2009 10:38 pm
Harvard administrators are human. Many humans are petty and small. Ergo, many Harvard administrators are likely to be petty and small.
Anybody who has worked at Harvard knows that many of the people in the institutional hierarchy are disproportionately concerned with their positions in that hierarchy and the related politics. Those are going to be the people doing the things that visionary finds depressing. Unfortunately, that same concern for politics is often rewarded, as political skill is a means to advancement in a heavily political environment. I think it’s safe to assume that there are a number of people in positions of significant authority who fall into this category.
12/13/2009 11:21 pm
What’s with all these ‘ergo’s - 3 in this thread by now. Are you Feste?
12/13/2009 11:23 pm
Very funny, 10:38 pm.
12/13/2009 11:53 pm
10:38, your dismal view of things can surely be true and lead to repression and victimization of subordinates in certain contexts (recent deputy dean of HC, e.g.). But we are in this thread talking about tenured faculty freedom of speech-there is a good reason FA, HL, JR and I can speak up, and I wish more would do the same. For this to be parlous or at least mildly problematic you need pettiness and small-mindedness to be effectively projected from the very top, as was attempted in 2001-6. I just don’t believe that’s the reality now, whatever problems may exist — and the op-ed gets many of them.
Igitur, I cheerfully talk on this blog, particularly during time-outs. Go Eagles!
12/14/2009 12:25 am
Um, RT, I think that 10:38 pm is (get ready for it) an ignis fatuus. I believe the author is mocking my posts. It’s a nice effort too.
12/14/2009 12:34 am
Passim you think, Feste? Maybe, though it is a plausible view, but not in the area under discussion. Nunc eo dormitum.
12/14/2009 3:22 am
What’s the reason for the ever-so-slightly sinister tone of some of the more recent posts? I suspect that it may be motivated by some sort of Schadenfreude.
12/14/2009 7:38 am
Quite so, Judith, and probably more likely an effort to shut down threads such as these. Where are you? In Paris?
RB:
I’d be interested in knowing if Anon 9:17, etc. is the same person as Re:visionary 10:38 p.m. and ergo 11:21 p.m., and even, though less significantly, salary raises 8:18 p.m.
12/14/2009 8:05 am
This is the tenor of the emails flying off yesterday, from the highest levels:
“Lewis is a good but troubled man who remains angry by the way he was dealt with by Summers. His choice to publicize the dirty linen shows that he has gone a deep end. Maybe he is right that the Corporation is too small.”
There is an effort underway to disassociate the current administration from Lewis’ criticism.
12/14/2009 8:35 am
Anon 8:05, I’m going to ask that you either prove some evidence of this or I’ll have to delete your posts. There’s something odd and unpleasant about the conspiratorial tone you’re taking, and if there’s no proof of what you’re saying, it’s not a useful contribution to this discussion.
So let’s see some proof or—forgive me—your posts will go poof!
12/14/2009 9:07 am
Thank you Richard, for seeking proof. Also, there is all this ominous discussion of evil administration/concentration of power. Well, if this is so, bring it into the light. Who are you talking about? Who are these evil beings who have yet to be cleared out?
12/14/2009 9:16 am
I am glad the piece has gotten some attention, but it’s not terribly original. We drag out some history that had been forgotten, I said some of the same things in my book 3 years ago.
During most of the Summers years, the Corporation was a leadership vacuum. Its members were rarely heard from in public and rarely spoke to those who make the university run, except the president and his staff. If Harvard were a publicly held corporation in today’s climate of intensely scrutinized corporate governance, the shareholders would have been up in arms about the failure of the directors to care responsibly for the institution. In airing their concerns about Summers’s leadership, Harvard professors were playing the role of shareholders. In 2005, some Fellows who had joined the Corporation since Summers’s selection began to listen to what professors were telling them, and the Corporation ultimately played its proper fiduciary role.
In another passage, I described our descent into deficit.
But the brilliant economist was a poor business manager. In the five years of his presidency, the balanced budget of the Faculty of Arts and Sciences fell to an annual deficit of $40 million, projected to be- come $100 million within five years—at the same time as the university endowment rose by more than $8 billion. Summers hired many high-priced consultants to review administrative structures, but the main result of his reorganizations was to swell the bureaucracy of assistant provosts, vice provosts and vice presidents, divisional deans and deputy deans, and assistant deans and associate deans. Much of the daily business of the university now becomes stalled in the bureaucratic thicket.
That’s an interesting paraphrase of the alleged high level emails. It’s hard to deny that we’re telling the truth (and I haven’t heard anyone deny it). The problem is that we are saying it — just as the problem with Fred asking Summers about the Harvard-in-Russia scandal wasn’t that it was an unreasonable question, but that it exposed Summers for what he was. I would not be surprised, alas, to have people suggest that we have some other motive in speaking up other than our concern for the university. One problem with that theory is the number of people weI’ve heard from, including current and former Overseers, who tell us that we’re exactly right. “This has gone on long enough,” one loyal alum told me.
12/14/2009 11:13 am
RT — Wait, what happened to the recent deputy dean?
As a former member of the NON-tenured faculty, I have some comments about the deputy dean ’04-’06, a Summers ephebe. But I don’t know that they would be relevant to the conversation about Summers, which in turn might not be relevant to any conversational undercurrent in this thread about Drew Faust, which in turn is probably not really relevant to the Lewis/Abernathy piece. So I’ll go try again to bleach my own dirty laundry,* and grade this damn stack of papers.
Decaf tomorrow, I swear.
Standing Eagle
* I sure wish some top executive somewhere were capable of unpooping his/her bed sometime, since other people are constantly having to lie in it. (End of metaphor)
12/14/2009 11:29 am
That’s the one I meant, SE, but meant identify as oppressor not oppressed.
12/14/2009 11:38 am
where are you grading papers these days, SE?
12/14/2009 12:38 pm
Jamie Houghton stepping down.
12/14/2009 2:24 pm
Which makes Robert Rubin Senior Fellow of HC I do believe. Unless . . .
12/14/2009 2:33 pm
God, these are such sad, grandiose, self-absorbed comments. They read like a bad version of David Lodge parody of academia.
12/14/2009 2:42 pm
Bad indeed because NOT FUN.
(“Satire is a lesson; parody is a game” — Nabokov)
12/14/2009 6:02 pm
I sent a link to the op-ed to nearly a hundred classmates and fellow alumni. Every response was positive and grateful for the information. A couple of friends, who hold important positions in finance, responded confidentially that they agree with lots that Fred & Harry wrote.
I would certainly join an effort to gather alumni support for reform of the Corporation - but not by threatening to withhold gifts. In fact, by NOT withholding a gift to the University, but by including concerns with a gift, an alumnus can be very effective.
12/14/2009 6:04 pm
Let me just echo Ben’s aversion to withholding gifts. That is neither good for Harvard nor strategically effective.