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Ruth Simmons Comment Watch

The president of Brown University, who for ten years has been a director at Goldman Sachs, issues a no-comment in response to the university’s newspaper.

Simmons wrote in an e-mail to The Herald that it would not be appropriate for her to comment on the situation at this time.

Why is it inappropriate for a director of a company to say something in response to government charges of fraud against it? Did the students ask Simmons whether she supports the company’s press release expressing outrage at the charges and vowing to defend its honor? Does she disagree with that statement? As a director, didn’t she have to review and vet it?

What’s inappropriate is for a leader of a university and a corporation to say nothing to both sets of her constituents (students, stockholders) when the attention of the world is focused on a claim of illegal behavior for which, as a director of the company, she may have to take some responsibility.

At the very least, Simmons needed to confirm her support for Goldman’s official statement in response to the charges. She is a Goldman official. She represents the company.

A University of Maryland law professor comments in the New York Times:

[What’s particularly] galling is the constant refrain from both Wall Street C.E.O.s and former regulators that no one could have predicted the [housing] crisis. However, the S.E.C. allegations are premised on the fact that hedge funds and Goldman Sachs itself were so convinced of cataclysmic failure that they were looking for investment vehicles that would profit each time a homeowner defaulted on his or her mortgage.

In other words, there were competent and smart people making billions because they could foresee the obvious: people with poor credit would not be able to repay their home loans.

In short, it was not that no one knew…

What did Ruth Simmons know?

Did she – as she will eventually say – know nothing?

Then why was she a director of Goldman Sachs? Why did GS pay her many millions of dollars for being a Goldman Sachs director? For ten years?

Another commentator at the NYT asks:

Why have there been no criminal charges? Why did the S.E.C. only name a relatively low-level Goldman officer in its complaint?

Ruth Simmons is a very high-ranking Goldman officer. Eventual criminal, not merely civil, charges will surprise no one. I’d say Brown University needs to start asking itself whether it has a president able to give the campus her full attention.

Or whatever partial attention she’s been giving it. As Pablo Eisenberg asks:

Did it not concern the Brown board that its president was [until recently] spending an inordinate amount of time and attention helping to direct and oversee three major corporations at a time when universities and colleges are themselves under increased financial stress, experiencing a crisis in financial aid and facing serious questions about systemic faculty and staff inequities?

One of the corporations she continues to oversee is now in very serious legal trouble. Through omission or commission, Simmons helped get it there. What is she going to do about that? What is going to happen to her because of that?


Simmons isn’t the only Goldman Sachs director suddenly struck silent.

William W. George, a Harvard Business School professor who has served on Goldman Sachs’s board since 2002, referred a request for an interview to the company’s press office. His Twitter account, which lauded JPMorgan Chase & Co. CEO Jamie Dimon for his firm’s better-than-expected earnings on April 14, remained silent on the controversy surrounding Goldman Sachs.

George is the author of 7 Lessons for Leading in Crisis.


Margaret Soltan, April 19, 2010 3:23AM
Posted in: the university

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One Response to “Ruth Simmons Comment Watch”

  1. theprofessor Says:

    The reason that only small fry are being indicted is that the big fry were big donors to Pres. Hopenchange. The big fry have been richly rewarded for their investment.

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