Five Professors Receive Fellowships

Five Harvard professors have accepted inaugural fellowships from the European Corporate Governance Insitute (ECGI), a Brussels-based non-profit international association, the institute announced Tuesday.

The honorees include Jones Professor of Economics Andrei Shleifer ’82, who is currently facing a federal government lawsuit.

Professor of Law, Economics and Finance Lucian A. Bebchuk, Professor of Economics Oliver D. Hart, Ford Professor of Business Administration Michael C. Jensen and Professor of Law Mark J. Roe will be the other four fellows from Harvard.

The fellows--of whom there are 21 total--“will provide intellectual leadership and inspiration for the Institute,” the ECGI said in a written statement. The official mission of the ECGI is “improving corporate governance.”

Shleifer, along with the University and former Harvard employee Jonathan Hay, is currently being sued by the U.S. government for $102 million.

Last month, the U.S. Attorney’s office released hundreds of pages of evidence in support of its allegation that Shleifer defrauded the government of millions of dollars while he advised Russia in its transition to capitalism as part of a program operated by the now-defunct Harvard Institute for International Development (HIID).

The U.S. Attorney’s office contends that Shleifer had engaged in unethical behavior and breached agreements with the government by investing hundreds of thousands of dollars in Russian companies while he was managing U.S. government aid, which was being funneled to the Russian government through HIID.

Marco Becht, the executive director of the ECGI, said that the pending lawsuit against Shleifer did not affect the decision to name him a fellow.

“As far as the ECGI board is concerned, this was not discussed,” Becht said of Shleifer’s Russian investments. “I don’t think his personal affairs will be a problem.”

Becht added that the ECGI would remain happy with having Shleifer on board as long as Harvard didn’t object to his business dealings.

“As long as Harvard University has no problem, we have no problem. If Harvard had a problem, then the ECGI would have a problem,” Becht said. “It’s a very delicate issue, but Andrei Shleifer is seen as one of the experts in his field.”

Roe, who was also named a fellow, said that Shleifer’s academic work was probably the ECGI’s foremost consideration.

“He’s one of the leading corporate governance scholars around,” Roe said. “That’s probably what they were focusing on.”

Shleifer, who was away from Cambridge this past week, was not available for comment.

Becht said that the ECGI, which was established only in January of this year, was able to attract as distinguished a roster of academics to its fellowships as it did for multiple reasons.

He cited the success of the ECGI’s predecessor organization, the European Corporate Governance Network, as one of the institute’s assets.

He noted that most of the fellows already know each other from working in the same academic area. In addition, most of the fellows are from Europe or have familial roots in Europe, leading them to maintain a concern for the continent.

“I think that they are genuinely interested in having more work done on corporate governance in Europe,” Becht said. “I think they feel the focus has been too heavy on the U.S. to this point.”

The exact duties to be carried out by the fellows have not been defined.

“We are not the choosers on this,” Becht said. “It really depends on the enthusiasm, the comparative advantage and the interests of each of the fellows.”

Roe described the fellowship as an initiation into “a study group on corporate governance.” He expects to travel to Europe this year to deliver a speech for an ECGI event.

Bebchuk said that he intends to contribute to ECGI meetings and policy debates as a fellow.

“I’m quite committed to the subject and to the work going on in Europe,” Bebchuk said. “I intend to be an active participant.”

More fellows were chosen from Harvard than from any other institution. Yale and Princeton each contributed two fellows, the second-highest total from a single institution.

“I think that between the economics department, the law school and the business school, Harvard is certainly one of the hubs on corporations and corporate finance in the world,” Becht said.

Staff writer Alexander J. Blenkinsopp can be reached at blenkins@fas.harvard.edu.