A New Chapter for the Oldest Corporation

The departure of William F. Lee ’72 will bring a new era for the Harvard Corporation. As he exits, the body has turned to a starkly different figure to fill his shoes: Penny S. Pritzker ’81, who brings deep ties to Washington’s most powerful players and a net worth of more than $3 billion.
By Julian J. Giordano and Madison A. Shirazi
By Cara J. Chang and Isabella B. Cho

In 2010, the Harvard Corporation embarked upon a historic first: change.

For the first time since its charter in 1650, the University’s highest governing board committed to a sweeping set of reforms that would nearly double its size, institute term limits, and select a senior fellow instead of allowing the longest-serving member to assume the role.

Few Harvard affiliates know much about the President and Fellows of Harvard College, commonly called the Harvard Corporation. The board weighs in on all major decisions at Harvard and holds the power to select — and fire — Harvard presidents. Yet, the Corporation is largely absent from campus life and discourse.

The board is chaired by the University president, but also includes a senior fellow who is billed as “a first among equals,” leading the body’s major initiatives and interfacing more with top Harvard officials.

Twelve years ago, as it sought to implement its first wide-ranging reforms, the Corporation turned to a quirky intellectual property lawyer with a friendly persona perhaps uncharacteristic of the titles he holds: William F. Lee ’72.

Lee joined the Harvard Corporation six months before the reforms were announced and ascended to the senior fellowship in 2014. Before joining Harvard’s top governing board, Lee, a long-time partner at the legal giant WilmerHale, served on the Harvard Board of Overseers and was a leading patent lawyer, litigating high-profile cases, including the “smartphone wars” trial between Apple and Samsung.

During his 12 years on the Corporation — the maximum any fellow can now serve — Lee helped steer the board through the fallout of the 2008 financial crisis and the height of the Covid-19 pandemic. He led the team that selected University President Lawrence S. Bacow. When the anti-affirmative action group Students for Fair Admissions sued Harvard over its race-conscious admissions practices in 2014, Lee served as senior litigant, representing Harvard in court pro bono.

Lee’s departure, set for next month, will bring a new era for the board. As he exits, the Corporation has turned to a starkly different figure to fill his shoes: Penny S. Pritzker ’81, who brings deep ties to Washington’s most powerful players and a net worth of more than $3 billion.

When she takes over as senior fellow in June, Pritzker will face a confluence of challenges. Over the last decade, Harvard’s endowment — which the Corporation is tasked with overseeing — has often delivered lower returns than its most prominent higher education competitors. The SFFA case, now at the Supreme Court, appears on track to reshape college admissions. And across the Charles River in Allston, Harvard continues to pursue aggressive expansion plans in the face of neighborhood opposition.

Prizkter comes to the Corporation with an intertwined legacy of privilege and pathfinding: She is the first woman to rise through the ranks of her family’s sprawling business empire and the first female senior fellow in the Corporation’s 372-year history. Pritzker’s success is also, though, rooted in the wealth of one of America’s richest dynasties.

Lee, as the first new senior fellow following the 2010 governance reforms, played a key role in determining the Corporation’s place at modern Harvard. Pritzker, set to succeed him next month, will be central to shaping the next chapter of the now-changed — but ever-powerful — board.

Reforming a ‘Dangerous Anachronism’

In the year leading up to Harvard’s governance reforms, criticism of how the Corporation operates spilled over into public view.

After Harvard’s endowment shrunk by $11 billion in fiscal year 2009, a pair of prominent professors publicly contended that the Corporation had fundamentally failed its fiduciary duty to Harvard. In a scathing Boston Globe op-ed, School of Engineering and Applied Sciences professor Frederick H. Abernathy and former Harvard College Dean Harry R. Lewis ’68 wrote that the Corporation is “a dangerous anachronism” that is unaccountable and shrouded in too much secrecy.

The 2010 reforms sought to restructure the Corporation for the modern era. The board published eight reforms designed to shift the Corporation from a seven-member “multiple executive” cohort to a 13-member body focused on Harvard’s strategic priorities. The board created term limits capping fellows at 12 years of service and established three new committees for finances, facilities and capital planning, and governance. More broadly, the Corporation committed to working more closely with the Board of Overseers — Harvard’s second-highest governing board — and promoting transparency.

Bacow — who was a fellow on the Corporation from 2011 until he became president in 2018 — contends that the reforms have been successful.

“I think expanding the size of the Corporation gave the Corporation much more bandwidth and much more substantive expertise for managing an institution of the complexity of Harvard,” Bacow said.

Robert D. Reischauer ’63, the senior fellow before Lee, said the close-knit nature of the group has been preserved despite the body’s expansion.

By Harvard University Archives and Cara J. Chang

“The culture that had been developed over the centuries from having a small, collegial body of individuals who have mutual respect for each other — weren’t competitive in any sense — has by and large been preserved,” he said.

As the Corporation evolved, so did the role of senior fellow: The 2010 governance reforms redefined the senior fellow as “a lead player within the board” with “a more active part in framing Corporation agendas and setting priorities for its work.” The senior fellow also chairs the governance committee and conducts an annual review of the president.

Scott A. Abell ’72, one of Lee’s classmates and a former member of the Board of Overseers, said Lee’s tenure was “uniquely positive at a time change needed to be implemented.”

“His incredible capacity to listen to people and to value everyone’s opinion, to respect points of view, made that transition work far better than I think anyone would have guessed — and far more quickly,” Abell said.

But the transformation of Harvard’s governance did not stop with the 2010 reforms.

As a fiduciary body, the Corporation is charged with overseeing the University’s finances at a high level — including the Harvard Management Company, which manages Harvard’s $53 billion endowment.

Lee’s tenure has also been marked by change at HMC and in the University’s financial strategy. In 2016, Harvard’s endowment saw its poorest set of returns since the 2008 financial crisis, losing $2 billion and underperforming relative to peer institutions. A week after HMC reported the drop, newly-hired HMC CEO N. P. “Narv” Narvekar announced a five-year plan to restructure the firm.

Former University President Drew G. Faust — who led the University through the height of the 2008 financial recession — said the transition from a large in-house investing team to an external model and its more risk-averse investment approach help explain Harvard’s lower returns.

“It’s hard to avoid this horse race about the number at the end of the year, and which university has what number. But the universities have very different circumstances that they’re taking into consideration,” she said. “There are a lot of elements going into this.”

Under Lee, the Corporation also carried out a historic intervention into undergraduate social life, endorsing the College’s sanctions against single-gender final clubs and Greek organizations in 2017. The Corporation rescinded its support for the penalties three years later.

Lee further redefined his role at Harvard during his time as senior fellow by taking on an usual task: defending Harvard in federal court. When SFFA sued Harvard over the College’s race-conscious admissions process during Lee’s first year on the job, he led the legal team that successfully defended the school during a 2018 trial and a subsequent appeal.

With the SFFA lawsuit still pending and record-high inflation expected to diminish endowment contributions, the Corporation’s next chapter under Pritzker’s leadership will open where Lee’s era of change and transition ends.

Pritzker wrote in an emailed statement that serving as senior fellow will be “an incredible honor.”

“I will put my heart and soul into this role to do my part to continue Harvard’s ongoing and important commitment to educating citizen leaders, to pathbreaking research and to creating opportunity and knowledge that help countless people across America and around the world,” she wrote.

Penny and the Pritzker Dynasty

Pritzker comes from one of America’s wealthiest and most influential families, with roots in Chicago. From Northwestern University’s Pritzker School of Law to the Jay Pritzker Pavilion in Millennium Park, signs of their influence are strewn across the midwestern hub. Since 2019, Penny Pritzker’s venture capitalist brother, J.B. Pritzker, has served as the governor of Illinois.

Penny S. Pritzker ’81 addresses the media in Tokyo while serving as U.S. Secretary of Commerce.
Penny S. Pritzker ’81 addresses the media in Tokyo while serving as U.S. Secretary of Commerce. By William Ng/U.S. State Department via Wikimedia Commons

Since graduating from Harvard College in 1981, Penny Pritzker has co-founded the global private investment firm PSP Partners, started the Pritzker Traubert Family Foundation, and served as secretary of Commerce in the Obama administration.

“She was an integral part of the success of the Pritzker family,” said Louis B. Susman, the former United States Ambassador to the United Kingdom and a former business partner of Penny Pritzker’s uncle, Jay Pritzker.

Jay Pritzker is credited with building the Hyatt hospitality empire and the Marmon Group, two of the primary sources of the Pritzkers’ wealth.

But while Penny Pritzker is now one of the most prominent members of the dynasty, she was never guaranteed a stake in the family business: She was the first woman to rise through the ranks of the empire.

“She was not one of the first — she was the first,” said Melvyn N. Klein, a philanthropist and former business partner and friend of Jay Pritzker. “She educated herself and prepared herself for that, and went to then-senior members of the family — and she qualified, and was able to join the family office.”

Following Jay Pritzker’s death, Penny Pritzker helped run the family business alongside two relatives: her uncle Nicholas J. Pritzker and Thomas J. Pritzker, who is Jay Pritzker’s eldest son and primary successor.

While friends and associates point to her as a barrier-breaker for her work in the family business, her stake in Hyatt has not been free from criticism — namely, from some major labor unions.

When Pritzker was nominated by Obama as Commerce secretary, UNITE HERE, a national hospitality workers union, opposed her appointment because of Hyatt’s treatment of workers. The Chicago Teachers Union has also raised concerns about Pritzker in the past, at one point charging that she funneled state money into Hyatt ventures.

Pritzker also faced questions over her executive position in the holding company that owned Superior Bank — which collapsed in 2001, costing U.S. taxpayers millions of dollars — and her family’s use of offshore tax havens. During the Senate confirmation process, Pritzker also admitted to under-reporting her income on disclosure forms by tens of millions.

Following her graduation, Pritzker remained significantly involved at Harvard, where she has donated tens of millions and served on both of the school’s governing boards. Carl F. Muller ’73, a former president of the Harvard Alumni Association, said Pritzker’s familiarity with the University makes her a strong pick for the senior fellow position.

“The fact that Penny is completely familiar with how Harvard works formally and informally is critical to her new role,” he said.

Lee spearheaded the process to pick his successor, which took a year and entailed conversations with past and present Corporation members, as well as Harvard administrators and deans, he said in an interview this month.

“During the course of that process, Penny emerged as someone who — because of her public service, because of her affiliation, association with academic institutions, because of her association with Harvard — was the ideal person to step into the role,” Lee said.

The Changing Face of Harvard

Even within Harvard’s governance, Pritzker is no stranger to historic firsts. Prior to her selection as the first female senior fellow, Pritzker’s 2018 appointment to the Corporation alongside Carolyn A. “Biddy” Martin finally established gender parity within the body.

Still, despite increases in the Corporation’s racial and gender diversity over the last decade, the group is largely made up of influential business, legal, and academic leaders, leaving it without significant socioeconomic diversity.

Pritzker is not the only Harvard mega-donor on the current Corporation: David M. Rubenstein joined the board in 2017 after co-chairing Harvard’s $9.6 billion capital campaign and has donated tens of millions.

Lee defended the makeup of the Corporation, saying that many members came from “humble” beginnings and that their wealth is a testament to their professional accomplishments.

Lee also said he expects Pritzker to continue advancing his effort to make the board more transparent — a longtime critique of the way it operates.

“I think we’re doing a better job of that from 2010 to 2020,” Lee said. “The pandemic has interfered with those communications, but I’m sure Penny will pick it up again, now that we’re all seeing each other in person.”

While Corporation members now regularly meet with other Harvard officials, including members of the Board of Overseers and Harvard deans, the Corporation’s meetings remain closed to Harvard affiliates, and there is no formal disclosure of the results of any votes or discussions.

Nathán Goldberg ’18, co-founder of Harvard Forward, a progressive student and alumni organization that has put up petition candidates to serve on the Board of Overseers, said the top governing board remains opaque.

But many members of the body contend that full transparency would be unhelpful.

“The Corporation can’t do its work if it’s perfectly transparent,” Bacow said in an interview earlier this month. “I think that the Corporation has responsibilities to communicate to the community and I think we’ve done that.”

The challenges facing the Corporation also extend beyond its makeup and internal operations to its responsibilities over Harvard finances. Pritzker will step into the recently-adapted senior fellow role as Harvard is recovering from a decade of volatile investments, leaving many eyes on what’s next for HMC.

Harvard’s investments have also become an increasing source of political controversy on campus, with activists calling on the school to divest its holdings from an array of areas, including fossil fuels, Israel, and private prisons.

Goldberg said Harvard’s budget and investments can reflect its stance on climate change and racial justice.

“Our values in the endowment and our process of program funding, research funding, are also going to be issues that Harvard is going to continue to grapple with for the foreseeable future,” Goldberg said.

Harvard’s expansion into Allston also looms large for Pritzker, who is a board member of the Harvard Allston Land Company, which manages the development of the University’s proposed Enterprise Research Campus. The project is awaiting city approval, but has received immense pushback from local residents and key elected officials in the area.

Shirley M. Tilghman, a former president of Princeton University who serves on the Corporation, said Allston presents a “once-in-a-century opportunity for Harvard to expand its campus.”

“Luckily, this is something that Penny has enormous insight into because of her day job in Chicago and her serving on the board of the company that was set up to oversee the development of the commercial part of Allston,” Tilghman said.

But the approval process and Harvard’s community engagement in the neighborhood has been bumpy. Harvard has run into roadblocks as elected officials from the area have asked for more specifics about the school’s plans and commitments to create more affordable housing.

“Harvard’s been a little slow with implementing Allston,” said Mitchell L. Dong ’75, a prominent donor, who added: “Just look at MIT’s expansion, or look at Stanford — they have no limitations on land.”

Still, Dong said, “Allston presents great opportunities.”

As Lee passes the baton to Pritzker, the SFFA case also continues to hang overhead: It is now set to be heard by the Supreme Court this fall, giving justices the chance to end affirmative action in American higher education. Asked about the most important changes during his tenure, Lee pointed to the school’s diversification — which he says would be at stake if the court rules against Harvard in the months ahead.

“The face of the University has changed substantially,” Lee said.

“But I hope, with all of my heart, that the commitment that you see of the people who work here, who come here, who teach here, to the mission of the place never changes — because that’s been the key,” he added.

—Staff writer Cara J. Chang can be reached at cara.chang@thecrimson.com. Follow her on Twitter @CaraChang20.

—Staff writer Isabella B. Cho can be reached at isabella.cho@thecrimson.com. Follow her on Twitter @izbcho.