Current Issue

July†11, 2012

Vol. 112, No. 15

Two hats that don't match

In response to: Outside compensation

Published on July†11, 2012

In his letter to PAW (April 25), John Delaney raises an important subject on the outside compensation of President Tilghman as a member of Google’s corporate board.

The president of Princeton is more than well-compensated for a demanding fulltime position that requires wearing a myriad of hats to serve that mission faithfully, diligently, and objectively. To serve on the board of directors of publicly held corporations can create overt and subtle conflicts of interest that can compromise the broad mission or the educational objectives of a university and Princeton in particular. Circumstances often arise in corporate governance that demand complete independence of judgment and action in the interests of shareholders and public policy; these could place a university president in an awkward position and dilute the most objective decisions that should and could be made behind closed doors.†

With the pressing time demands on university presidents, there is scant plausibility they have the additional resources required to study, absorb, convene, discuss, conclude, decide, and cast a vote on a corporation’s extensive and rapidly changing issues. In addition, many university presidents do not have the business-educational background and deep industry experience required to be an effective director in corporate matters. That is not to say that once retired from the presidency of a university, they might not make superior members of a board and have the time and will to make the best decisions for the shareholders.†

A Princeton University president has the potential to be an effective corporate board member, but not while serving in the primary capacity of leading the University. Wearing two hats that don’t match sends the wrong message. One master at a time is enough.

LAURENCE C. DAY ’55
Ladue, Mo.

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1 Response to Two hats that donít match

John C. Clark III '65 Says:

2012-07-30 10:12:44

Good letter. I wrote a PAW letter on the same subject in the spring of 2011 that I don't think was published. College presidents should not serve on outside boards unless the board of trustees approves, and only then on a finding that such service serves the interests of the university. Any remuneration should be turned over to the university, a rule that most major law firms follow in respect to service of firm lawyers on outside boards. As Day points out, Shirley Tilghman is well compensated and has a full-time job as university president.
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