The New Oldest Corporation in America

The New Corporation
Matt O. Ricotta

The University's highest governing body—the Harvard Corporation—has nearly completed the first major structural reforms in its 360-year-old history in an effort to increase the board's engagement with the community and knowledge base.

After a three-year reform process, the first structural changes to the oldest corporate body in the Western hemisphere are nearly complete. A 13th member will join the Harvard Corporation—Harvard’s highest governing body, also known as the President and Fellows of Harvard College—this summer, rounding off reforms that leave the Corporation looking very different from the group that Harvard President Henry Dunster first called to order in 1650.

Facing criticism that the body was disconnected and too secretive, University leaders initiated changes in 2010 to increase engagement with the University community and to allow for more diverse skill sets and opinions.

“We wanted a broader range of expertise, given that the University is so much larger, more complex, incorporates many more dimensions of life than it did in 1650,” said University President Drew G. Faust, a member of the Corporation herself.

Now, with the changes nearly complete, members and university governance experts say that these reforms have been largely successful. Along with its growth in size, the Corporation has expanded its contact with Harvard’s stakeholders by adding members that are increasingly involved with Harvard life.

IN WITH THE NEW

In a December 2009 Boston Globe op-ed, School of Engineering and Applied Sciences professors Frederick H. Abernathy and Harry R. Lewis ’68 criticized the Corporation for lacking accountability, transparency, and the size necessary to govern effectively. As an example, Abernathy and Lewis blamed the Corporation for the University’s loss of billions of dollars during the financial crisis.

“The Harvard Corporation is a dangerous anachronism. It failed its most basic fiduciary and moral responsibilities,” they wrote. In addition to calling for the resignation of “some of its members,” Abernathy and Lewis attributed the body’s mistakes to an antiquated structure.

“It is too small, too closed, and too secretive to be intensely self-critical, as any responsible board should be,” they wrote.

In the spring of 2010, the Corporation launched an internal review of its policies with the creation of a Governance Review Committee. That group released a report at the end of 2010 announcing sweeping changes to the board—many of which addressed the problems identified by Abernathy, Lewis, and other members of the Harvard community.

“This was President Faust’s initiative,” Corporation Senior Fellow Robert D. Reischauer ’63 said, calling her the “prime mover” of the reforms.

That report called for increasing the body’s size from 7 to 13 members, imposing six-year terms limited to two in number, and creating three committees that include Corporation members and other experts.

Since that report, the Corporation has implemented reforms gradually by adding one or two members at a time, avoiding sudden and dramatic change that Reischauer said could have threatened the group’s cohesion.

“A kind of camaraderie develops among that group that facilitates cooperation and yet doesn’t cause people to be reticent in any way. It’s almost like family at a dinner table,” Reischauer said.

Harvard Business School professor and governance expert Jay W. Lorsch said that it is too soon to assess the success of the reforms, but that he thinks that the involvement of more people will indeed result in more productive and informed conversation.

“The intent is absolutely appropriate and I believe it will work,” he said. “I think generally I’m positive about what they’ve been doing.”

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