Why do companies like Goldman Sachs put academics like the president of Brown University on their boards?

Consider a set of comments about GS in the Washington Post.

Alan Webber, Fast Company magazine, writes:

… The reaction to Goldman today in the press is one of the things that happens when Americans see too clearly their reflection in a mirror.

Are we really that aggressive? Do we really play the game with that degree of cutthroat, win-at-all-costs raw power? Is that really the face of capitalism?

… What kind of capitalism do Americans want?

Casino capitalism? Wild West capitalism? Winner-take-all capitalism? Or are we looking for something that moderates raw, unfettered, ruthless cowboy capitalism with values that include social equity, the public good, the common cause?

It’s not simply a matter of more or less government regulation. It’s a matter of national values, national purpose and social philosophy.

When we look in the mirror after the dust settles over financial regulation, which face of capitalism do we want to see?

Because what we are is what we get.

We are all Goldman Sachs.

No, no, no. We are not all Goldman Sachs.

UD‘s colleague in GW’s business school whose main activity is making money by hastening the disappearance of the professoriate and with it the university — yes, sure, he’s Goldman Sachs. But not all of us are Goldman Sachs. UD, for instance, is not Goldman Sachs.

Nor is it the whole story to say, as Webber does, that we have casino capitalism, etc.

We have casinos masking themselves as social service agencies. We have cowboys masking themselves as Renaissance humanists.

Because it goes both ways. Cowboys want to get themselves on university boards. Cowboy corporations want university people on their boards.


Why did a cowboy like Bernard Madoff give a shit about getting himself on the board of trustees of Yeshiva University?

University, baby! University! What does the word say to you? What does it make you think of? The wild west? Winner take all? Raw unfettered ruthless? Nah… Placid, peace-loving. Gently blanketed ivy walls. Springtime gatherings of robed figures thinking higher thoughts. The tamed west! Loser take all! Cooked, fettered, ruth!

The university is cover. It’s what you join, or what you invite, to give yourself or your corporation the look of respectability.

Archana Ramesh, a graduate student at Columbia University, contributes this to the Post discussion:

In his book “Leading Change,” James O’Toole argues for values-based leadership and a consistent display of respect for followers. This paradigm of leadership is not one stressed in business schools, which train our future investment bankers and traders. So while we can look at how leaders at a particular institution have behaved as symptoms of a marketplace without values, we have to wonder about the root causes of these behaviors.

What are the gaps in our educational and social curriculum that make it acceptable for some of our most influential business leaders to forget their duty to followers? Where is the business case made for leading based on respect and trust? Have we as a society become so short-term and bottom-line-focused that making values-based decisions becomes a liability?

Of course you can find many interviews and speeches and articles by another Goldman Sachs director, Harvard professor Bill George, in which he gasses on about values.

George is notorious for defending GS executive compensation.

So it’s not that you’ve got on one side evil ruthless capitalists and on the other side good values-based people. You’ve got cowboys, dressed up, for public consumption, in academic gowns. Every business ethics course at universities pumping out Goldman Sachs traders is dress-up.

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4 Responses to “Dress-up”

  1. MattF Says:

    To some degree, it’s just facing reality– like it or not, Brown and Goldman Sachs have a lot in common. That GS veered off at some point into (um, alleged) fraud and criminality is an argument for watching what you’re stepping into– it’s not an argument for staying home and drawing the curtains.

  2. Bill Gleason Says:

    For the same reason that Pepsi put the dean of the University of Minnesota Medical School [sic] on its board?

  3. Jonathan Says:

    I admire “Cooked, fettered, ruth!” In the spirit of your blog, I think I shall plagiarize it.

  4. Margaret Soltan Says:

    Go ahead, Jonathan. Glad you liked it.

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