Harvard governing body under review

Harvard University is reconfiguring its highest governing body, the Harvard Corporation, to implement a structure similar to those currently in place at Yale and other major universities.

Advisers to the Harvard Corporation reforms said the changes were necessary adjustments to an outdated governing structure and were not inspired by Yale or any other specific institution. But top Yale officials say Harvard’s remodeled governing body incorporates effective structures employed in the Yale Corporation.

“I was very pleased to see that Yale already has in place the best practices being recommended by the Harvard Corporation,” Vice President and Secretary Linda Lorimer said. “I think this shows revolutionary developments in Harvard’s governance.”

The overhaul will nearly double the body’s size from seven to 13 members, including Harvard University President Drew Faust, and form committees to address finance, governance, facilities and capital planning. Harvard plans to bring in the additional six Corporation members over the next two to three years.

The Yale Corporation consists of 19 members, including University President Richard Levin, Connecticut Governor M. Jodi Rell and Lieutenant Governor Michael Fedele. Six of Yale’s trustees are alumni elected by fellow alums for six-year terms, while 10 are termed “Successor Trustees” because they appoint their own successors.

Margaret Marshall LAW ’76, Chief Justice of the Massachusetts Supreme Judicial Court, a former member of the Yale Corporation, and former vice president and general counsel of Harvard, said senior administrators at Harvard consulted her about the restructuring because of her previous involvement with both institutions. Marshall said she told them the Yale Corporation benefits from its size — small enough for all members to sit around one “fairly intimate” table.

“My sense is that the Yale Corporation, whether by an accident of history or anything else, is an extremely well-functioning corporation,” Marshall said. “The changes that Harvard and President Faust and the Corporation has recommended are very well-received.”

The restructured Harvard Corporation limits the service terms of members other than the president. Members could previously serve as long as they chose, but there was an “informal understanding” that they would step down after serving 12 years or reaching age 70 or 72, said Richard Chait, a professor at the Harvard Graduate School of Education that advised the Corporation on its changes.

Yale has set term limits on the Corporation’s trustees for decades, Lorimer said, and already possesses many committees comparable to ones Harvard has formed through its structural overhaul.

The Harvard Corporation also redefined the role of its senior fellow. Formerly the longest-standing member of the Corporation, the senior fellow will now be the “lead trustee” and not necessarily the most senior member, the Harvard Corporation Governance Review Committee report said. At Yale, trustees select the senior fellow, who holds the post for three to six years, Lorimer said.

“These revisions [at Harvard] are completely consistent with Yale, truthfully,” Roland Betts ’68, senior fellow of the Yale Corporation, said in an e-mail Tuesday.

Still, Seth Waxman LAW ’77, president of Harvard’s Board of Overseers and former solicitor general of the United States, cautioned against drawing too many parallels between Harvard’s and Yale’s highest governing bodies.

Harvard has two governing bodies: the Corporation, and a 30-member Board of Overseers, which is elected by alumni and tasked with periodically reviewing departments and schools and approving some Corporation decisions.

“The governing structure is so much different at Harvard than at Yale,” Waxman said in an interview Tuesday. “The Yale Corporation, as I understand it, is a single board of trustees, whereas the Harvard Corporation is one of two [board structures].”

Waxman said the seven-person board was far too small, and called the expansion of the Corporation “way overdue” for a university now far larger and more complex than it was in 1650, when Harvard first created the Corporation.

Ronald Ehrenberg, professor of labor relations and economics at Cornell University and a top higher education expert, said Harvard’s governing body was previously too small to oversee all matters it governed, forcing administrators to take over.

The Harvard Corporation undertook its reform — the first significant structural change to the organization since its inception — in fall 2009, the same year that the national economic crisis hit and Harvard’s endowment tumbled 27 percent.

Both Marshall and Ehrenberg said the national economic crisis affected many major universities and offered a natural chance to reevaluate governance. Marshall said she admired Faust for following through with a structural review.

“Every crisis is an opportunity, but not every crisis is seized as an opportunity,” Marshall said. “This is certainly one where President Faust has seized the opportunity.”

Ehrenberg said trustees at many universities do not feel “on top” of their schools’ financial situations. In the case of Harvard, Ehrenberg said, the University suffered from creating unrealistic capital investment plans based on unfulfilled expectations of annual giving, in addition to seeing a decline in the endowment.

The Yale Corporation has undertaken a full Institutional Review every five years since Levin instituted that practice in 1993.

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