March 29, 2010; Inside Higher Ed | The indomitable Pablo Eisenberg takes university presidents to task for sitting on corporate boards in this article from Inside Higher Ed.
He takes off on Brown University’s Ruth Simmons, who is a trustee at Goldman Sachs (where she presumably witnessed if not approved of Goldman’s huge staff salaries and bonuses) and has been a member of the boards of Pfizer and Texas Instruments. Simmons received $323,539 for trustee work with Goldman and will leave the board this year with a Goldman stock portfolio of $4.3 million, apparently a perk that all Goldman board members get for their service.
Eisenberg cites the time commitment of Simmons on these corporate boards as taking away from the time she needs to devote to her role running Brown University and he raises the issue of potential conflicts of interest. His question about university leaders on corporate boards is precise and devastating: “Why do university presidents join corporate boards? Is it greed? Aren’t skyrocketing compensation packages, including deferred compensation, free housing, special benefits and other perks sufficient to meet the needs of aspiring educational CEOs? Is it a belief that corporate board memberships lead to useful relationships with other businesses and wealthy people that can increase the coffers of the university?” He suggests, in response, that college presidents might be better advised to spend more time and attention on college matters than corporate issues: “if university and college presidents were to spend more time in conversing with faculty and students, in attending a few classes and in actually teaching the occasional course, they would be better armed with the skills they need to manage their institutions effectively.”
Eisenberg’s excellent piece is on university presidents and corporate boards, but we at the Nonprofit Quarterly think the same concerns apply to foundation execs. How about Judith Rodin of the Rockefeller Foundation on the board of Comcast (director compensation of $321,000 in 2008) and Citigroup (compensation of $240,000 in 2009)? Or Alberto Ibarguen of the John S. and James L. Knight Foundation on the boards of AMR Corporation/American Airlines with $75,000 in director compensation and PepsiCo where he got $277,000 in cash, stock, and stock options in 2008 (Rodin is also on the AMR board)? Or now retired Lumina Foundation CEO Martha Lamkin on the board of Citizens Energy Group (Citizens Gas & Coke) and Meridian Mutual Insurance Company? Or Joan Spero of the Doris Duke Charitable Foundation on the boards of Delta Airlines, IBM ($200,000 in compensation), and ING Groep N.V. (Netherlands-based life insurance company)?
Before William Richardson retired as CEO of the W.K. Kellogg Foundation, his contemporaneous corporate board service included positions with the Exelon Corporation, the Bank of New York Mellon Corporation, and the CSX Corporation. His successor, Sterling Speirn, serves on the board of the Kellogg Company where he receives compensation totaling $219,889 in cash and stock. Melinda Gates serves as a director of the Washington Post Company in addition to her work for the Bill and Melinda Gates Foundation. Mary Bitterman, CEO of the Bernard Osher Foundation and previously CEO of the James Irvine Foundation, is a board member for the Bank of Hawaii Corporation (Director compensation of $110,000).
How about Vartan Gregorian of the Carnegie Corporation receiving $191,000 in cash, stock, and options for his director service at Cell Therapeutics? Annie E. Casey Foundation VP Ralph Smith is a director of the Nobel Learning Communities where he gets $30,000 in cash compensation and $30,000 in stock. Zoe Baird, former Clinton cabinet nominee, is president and CEO of the Markle Foundation, but also has board slots with the Chubb Corporation (property and casualty insurance, where she got $223,000 in 2008, Boston Properties ($147,791), and the Convergys Corporation (business software, director compensation of $169,658).
This list is hardly complete and comprehensive, but no one should be surprised at how many foundation people sit on corporate boards. There are scads of corporate bigwigs on foundation boards, so why not pick a few foundation people to be the “independent” or “community” members of corporate boards? Maybe there are conflict of interest questions for these foundation execs, which one hopes they are aware of and deal with. Maybe there are compensation questions, which should be revealed so that we know how much foundation people are really paid for their foundation service. Eisenberg raises the question of university leaders serving on corporate boards, but knowing him, we would guess that he would agree that the problem in the foundation world is also a concern. The picture our information adds is one of a foundation sector many of whose leaders fit comfortably in the world of big corporations.—Rick Cohen