Summers' Fall and the Broken Paradigm [Updated]
Coincidentally with the buzz about the impending resignation of Lawrence Summers as President of Harvard, I was responding to a post by Andrew Taylor over at the Artful Manager about the validity of John Carver's theory of corporate governance. There could hardly be a better refutation of Carver's theories than the events the unfolded in Cambridge.
John Carver has a strong faith in the ability of Chief Executive Officers. When he talks about the relationship between staff and board, he is talking about one staff: the executive. That's the model that Dr. Summers tried to pursue at Harvard. As huge as it is, Harvard has at its corporate center a small body of seven, known as the Corporation, which includes the President, and which on paper serves as a joint executive body. However, under Dr. Summers, it appears to have evolved into something of a Carver-style board, with an Executive pursuing his own course under general policy guidance.
What was ignored in this model was the Faculty of Arts & Sciences as a body with power of its own, not part of the formal system of governance. The history of events is available in many place, but the actual voices of the faculty are only available here, to my knowledge. Ultimately, the rest of the Corporation had to conclude that continuing on with passionate discussion in this vein was not going to be productive. In effect, Summers was jawboned out.
[Update] Time offers the theory that the FAS found new ammunition in an recent investigative report in Institutional Investor questioning the lenient treatment of economics professor Andrei Shleifer after Harvard's $26.5 million settlement in a case involving alleged fraud and misuse of USAID funds by Prof. Shleifer in Russia in the 1990s. That theory hasn't seen traction elsewhere (or here). I would guess that it's just one more talking point in the faculty jawboning.
The Carver model, and any model that focuses exclusively on the relationship between board and executive, is bound to fail. With large organizations like Harvard and the American Red Cross, what is called for is a master politician, able to keep many interest groups happy, not just a board. While some have called for Al Gore in the role, it seems to me that the more likely available candidate for Harvard, despite his flawed background (that is, Yale), would be Bill Clinton.
Thanks for the post and the commentary. However, I'm not quite ready to toss out an entire model because of the general incompetence of its implementation.
I'm also not here to suggest Carver's approach is ideal or even possible...just that it thoughtfully addresses many of the structural flaws of the nonprofit governance model.
In the case of Harvard, for example, you are assuming that the governing board identified clear and observable outcome objectives for its organization -- and that it evaluated and guided the activities of its executive staff against those objectives. Carver also emphasizes guiding executive staff through constraint -- ie, meet these objectives without freaking out the faculty.
In addition, I don't equate the ''one voice'' principal with a lock-step board unwilling to blow the whistle on bad behavior. That's a distortion of the model, and a sign of bad governance by any other other model you care to name.
So, sure, Carver is wrong, as is anyone who suggests an ideal and impervious model for such a complex leadership structure. But from what I've seen of other efforts to frame an effective governing authority, he's less wrong than most.
Of course, by my own standards, I'm wrong too.
Posted by: Andrew Taylor | February 22, 2006 at 12:03 PM