The Harvard Corporation, Reformed
A periodic governance update from Robert Reischauer and Drew Faust
Robert D. Reischauer, Senior Fellow of the Harvard Corporation, and President Drew Faust today provided a brief briefing on that governing board’s operations and activities—one of the periodic updates to the community begun when significant reforms of governance were adopted in late 2010. (Read the account of a prior briefing, in April 2011.) The venue, in the Corporation meeting room at Loeb House, itself was significant: the space has been renovated and re-equipped to accommodate the Corporation’s expansion (from seven members previously, to 10 at present, with three additional members still to be appointed), a cornerstone of the governance changes.
Reflecting on the reforms overall—the Corporation’s enlarged ranks; its creation of formal committees (focused on governance, finance, capital planning and budgeting, and alumni affairs and development); and its appointment of alumni experts to the committees and joint Fellow-Overseer membership on the alumni-affairs group—Reischauer said they had proven “extremely productive.”
Faust, still nursing a cough contracted during her recent trip to India, noted that the introduction of three new members to the Corporation—traditionally a small, informal group—had proceeded “seamlessly.” An observer, she said, would not be able to tell which new members (Lawrence Bacow, Susan Graham, and Joseph O’Donnell) had joined the group last summer. The new members have joined fully in Corporation deliberations, contributed significantly, and were part of fully “collegial” ways of proceeding. The new structures and sources of expertise, Reischauer indicated, had met expectations, but would be subjected to a formal one-year review by the governance committee, which he chairs; identified weaknesses or opportunities for improvement, if any, will be made as necessary. Reischauer said he found the camaraderie and smooth operations of the enlarged Corporation “tremendously heartening.”
That same spirit, he said, was evident in the newly constituted committees. The alumni members who are not Corporation members, he noted, were chosen for their expertise in the committees' respective subjects, and it was “very satisfying to see how the Corporation members and these other individuals have worked together seamlessly.” Of substantive importance, he said, the committees have, as intended, combined subject expertise with knowledge of Harvard, resulting in in-depth analysis of issues and discussions that have been helpful to the Corporation as a whole and to the administration; the committees have modified the policy options under consideration, improving the outcomes the Corporation has subsequently been able to put in place. (Reischauer noted that the committees do not exercise independent fiduciary responsibilities; rather, they serve in an advisory capacity to the full Corporation.)
The committees’ work, he continued, has enabled the Corporation as a whole to address issues more quickly, on a better basis of information and prior discussion, and to reach the decisions it must make more efficiently. That was, of course, a chief objective of creating the committee structure— “to develop much more useful, systematized ways of raising questions” that matter to the institution.
A related hope was that the Corporation, in turn, would be freed to focus more broadly and effectively on larger strategic questions that concern Harvard’s future. Although the new structure is only months old, Reischauer said, that shift is “very definitely” in evidence, with discussions this past weekend with the deans on making “One University” more of a reality, and past discussions on international strategy, the undergraduate experience, and so on. He characterized such exchanges as “much broader discussions that are critically important to the long-term future of the University.”
Would the committees’ deliberations themselves result over time in public products from the Corporation—a published long-term capital plan, a multiyear budget, a University strategy statement (apart from the academic aspirations it expresses in the forthcoming capital campaign)? Reischauer indicated that the Corporation was “moving internally” in the direction of having such formal long-term plans, but had not gotten to the point of considering public plans. President Faust noted that executive vice president Katie Lapp and Mark R. Johnson, vice president for capital planning and project management, had prepared a five-year capital plan for the first time (see the Harvard planning and project management website); its public expression, so far, is the usual submission of capital plans to Cambridge city government, and the forthcoming institutional master plan submission to Boston, updated for altered development expectations in Allston (expected at the end of 2012).
The process of searching for additional Corporation members continues, Reischauer indicated—on track with the hope of filling the “three new slots over the course of the next two years.” At least some of those appointments could be expected in late spring, he suggested. The search committee includes members of both the Corporation and the Board of Overseers, he noted, a further sign of closer working relationships among the senior and junior governing bodies; they are looking at “a wide group of extremely capable individuals.” As the Corporation grows to 13 members, he indicated, its committees’ rosters will be expanded as well, with new Fellows and possibly with additional, expert alumni members participating.
Reischauer touched further on the governance committee’s role. (He is chair; members include Corporation Fellows Nannerl O. Keohane, president emerita of Wellesley and Duke; William F. Lee, co-managing partner of the WilmerHale law firm; James F. Rothenberg, Harvard’s treasurer and president of Capital Research and Management Company; and Faust.) Beyond its near-term review of the recent reforms, and its longer-term responsibility for evaluating Harvard governance generally, he said it was conducting “a review of the president.” The Corporation, he said, of course conducts an annual review of the president’s performance, but good governance requires a more thorough review of the president, where the institution is headed, and so on, at five-year intervals, “not dissimilar to the periodic reviews that the president conducts of the deans.” This review, now under way, involves consultations with stakeholders including administration staff members, professors, deans, students, and alumni, he said. This formal, periodic review process represents a clear departure from past practice; the perceived inadequacy of Corporation review of the president prompted criticism from Fellow Conrad K. Harper in 2005, and his decision to resign from the governing board.
Reischauer’s comments indicated that the Corporation is being briefed on the plans for Harvard’s capital campaign, although it does not appear to be a central focus of the board’s current work. He said the board received “periodic updates” from its finance committee, whose members include both Rothenberg (who also chairs the Harvard Management Company board, and thus has a close eye on the endowment) and Paul Finnegan (chair of the Overseers' finance committee and co-CEO of Madison Dearborn Partners, a private-equity firm)—two co-chairs of the capital-campaign planning committee. (The other co-chairs are Corporation member Joseph O'Donnell and Glenn Hutchins '77, M.B.A.-J.D. '83, co-founder and managing director of Silver Lake Partners, a private-equity firm, and a Harvard Management Company director.) Campaign planning is an “iterative process” (of testing Harvard’s ambitions, supporters’ interests and appetites, and the University’s financial resources). President Faust and her administrative team, he said, provide specific information as needed on the roles of Harvard’s leaders (the president, deans, provost, and so on), particular campaign goals, timing, and so on. The alumni affairs and development committee itself pursues such matters in far greater detail, and reports to the Corporation as a whole, as it had earlier this week.
Summarizing the effect of changes like these, Faust said, “The capacity that the changes in governance have brought to our deliberations is really welcome.” With more expertise available to address issues, she said, the Corporation has been able to apply “consistent, sustained, long-term attention” to them, much as the administration itself was doing in managing the institution (through the executive vice presidency, the capital-planning process, and other initiatives). As she had seen demonstrated again during the past weekend, when the Overseers and Corporation met, “Harvard’s alumni and friends are so extraordinarily generous to the institution” in making themselves “readily available with all kinds of contributions” of time, insight, and support, to the University’s benefit—and now even more so than previously, through a revivified form of governance at the highest level.
Updated February 10, 2012, 8:55 a.m., to reflect the additional co-chairs of the capital-campaign planning committee.
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