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The Corporation’s New Era

Harvard’s governing body seeks specialists while increasing transparency

Meddling with the structure of a nearly four-century-old institution would be enough to make most people a bit nervous. For University President Drew G. Faust, it gave her shivers.

Harvard’s historian president announced late last year that she would significantly reform the Harvard Corporation, the University’s highest governing body. The decision to change an organization that has essentially remained static in form since its founding in 1650 resonated strongly with a woman steeped in American history.

“Changing the Corporation gave us shivers,” Faust said. “I have never felt more a part of a tradition and that we were intervening in ways that were preparing Harvard for its next century and perhaps the century beyond.”

The reforms, which overhauled the oldest corporate body in the Western hemisphere, include nearly doubling its membership from 7 to 13, the introduction of six-year term limits for members, and the creation of new subcommittees.

Though the reforms sound bureaucratic, their tremors may be felt far down the organizational chart.

But shivers or not, it remains unclear how the historic expansion, announced in December, will impact how the Corporation carries out its work, increases accountability in the aftermath of the financial crisis, and responds to calls for more transparency.

In large part, the Corporation’s new direction will be shaped by the individuals who join in the coming years. But the short list is a tightly guarded secret that no one close to the Corporation is willing to disclose.

And until the new members are announced and the subcommittees’ work is underway, the impact of the Corporation’s restructuring cannot be measured, and its success as a modernized governing body remains to be seen.

WHY NOW?

After 350 years of fairly smooth sailing, a structural overhaul of the Corporation might seem unexpected. While the Corporation underwent a review in the 1970s, it did not result in any significant changes, according to Henry Rosovsky, a former member of the Corporation and a former dean of the Faculty of Arts and Sciences.

Pressure to reform had been building for several years and had both internal and external origins before culminating in 2008.

The economic crisis of that year rocked global markets and resulted in a precipitous drop in the value of Harvard’s endowment and led the entire University “to take a hard look at its role and operations. The Corporation thought it should not be an exception,” according to a report issued by the Governance Review Committee.

Reform at Harvard has mirrored a broader concern within higher education to more critically assess universities’ exposure to risk.

Former University President Lawrence H. Summers’ rocky departure from Harvard also contributed to soul-searching within the Corporation, the body that was responsible for hiring and firing Summers.

All this took place against a backdrop of reform within governing bodies in the private sector that followed the Enron and WorldCom scandals, according to Graduate School of Education professor Richard P. Chait.

“This concern about reform was in the air and present in lots of conversations among people nationwide who were executives and also served as college trustees,” said Chait, who specializes in higher-education governance and advised the Corporation on the reforms.

Additionally, in the aftermath of the financial crisis the Corporation came under attack by faculty and alumni for a lack of transparency.

In December 2009—around the time that the review of the Corporation was launched—Harvard Professors Frederick H. Abernathy and Harry R. Lewis ’68 wrote an op-ed in the Boston Globe calling for some Corporation members to resign in the wake of the nearly 30 percent decline in the endowment’s value during the financial crisis.

In the op-ed, they called the Corporation “a dangerous anachronism” and said that “it is too small, too closed, and too secretive to be intensely self-critical.”

Robert D. Reischauer ’63, who heads the Corporation as its senior fellow, said when the reforms were announced that the changes would partly address these criticisms and that the Corporation would move toward increased openness.

That spirit is most evident in the Corporation’s newest member, William F. Lee ’72, the group’s newest member, who said that he would, for example, make himself available for interviews with The Crimson and meet regularly with students. Several other members of the Corporation declined to be interviewed for this article.

Chait said he expects that the senior fellow and the president of the Corporation will initiate more formal and informal conversations with individuals in the University to open lines of communication.

Abernathy, arguably the Corporation’s most vocal critic, said he is only “cautiously optimistic” about the reforms.

“The optimistic part is they’ve actually undertaken potentially some reform—it’s all potential and now the proof will be who they appoint. Let’s say if they appoint six Wall Street people, I would say it’s not an improvement at all.”

EXPANDING MEMBERSHIP

In the Corporation’s early days, the body consisted of a clubby group of Boston lawyers that served as a sort of informal kitchen cabinet for the University president.

As Harvard has evolved, the Corporation has gradually changed—but not always for the better.

Recently, the Corporation has come under scathing criticism for what many perceive to be an over the top commitment to secrecy and a troubling lack of accountability.

When Faust rolled out the reforms late last year, it was clear that the new policies were meant to address these criticisms head on. With the expansion of the body’s size from 7 to 13 members and the adoption of term limits, the body sought to become more specialized and responsive.

Still, even after these reforms, the Corporation remains the smallest board among its peer institutions. Private colleges and universities typically have boards composed of 25 to 60 members, according to Lucie Lapovsky, who runs a higher-education consulting firm that advises on governance issues.

A wider membership allows for the inclusion of a variety of specialists that a bring a deep knowledge on a given issue to a university’s operation. Because of the Corporation’s limited size, individuals selected for the board have historically been generalists with a broad spectrum of skills.

Now, the generalist may be giving way to the expert.

The Corporation’s wish list includes 10 or 12 important skills, and it is currently looking “for people that fill two or three of them,” said Reischauer. He declined to specify what areas of specialization they hope to fill.

Lee said that a background in international work, science and technology, or experience running a large institution would all be valuable skills that a new Corporation member might bring to the table.

According to Chait, subjects that historically have lacked representation include engineering, medicine, stem cell research, and knowledge of international corporations.

“These are areas that are not only explosive in terms of knowledge but are also game-changers,” said Chait.

Eve J. Higginbotham, a member of the Board of Overseers, said she would like to see expertise in the sciences on the Corporation. Higginbotham also said she supports increasing diversity among the Corporation’s membership.

Currently, five of the Corporation’s seven members are white, one is black, and one is Asian. Three of the members are women.

Upping the Corporation’s membership also raises the possibility that accountability will be diluted among its members.

But over the course of its history, Harvard has become sprawling and decentralized, requiring a larger team of leaders.

“Harvard is a big enough place,” said Rosovsky. “Even if you divide responsibility by 13, you’ll still have a lot of responsibility.”

Given the size of the University, a larger membership may be a step in the right direction toward better integrating the Corporation into Harvard’s affairs.

“I think the reforms will help the Corporation to be a more responsive and agile governing body,” Higginbotham said. “That sounds like a paradox—that if it’s bigger it won’t be as agile, but I don’t think that will be the case.”

With the new set of reforms, members of the Corporation will now be subject to six-year term limits, which promises to increase turnover and will help prevent the Corporation from becoming stagnant.

“The newcomer will ask the innocent or stupid question that brings to light some interesting issues that are going on at the institution,” Lapovsky said.

—Staff writer Zoe A. Y. Weinberg can be reached at zoe.weinberg@college.harvard.edu..

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