Members of the Board of Now Bankrupt Lehman Brothers as Leaders of Health Care?

In our own Providence Journal, Michael Hiltzik commented about the Valukas report on the fall of the once proud Lehman Brothers.  He asserted that one of the lessons learned from the case is the "folly of relying on self-discipline and self-regulation in the financial markets," particularly given the irresponsibility of the top leaders of financial corporations. In particular,

I’d love to hear an argument for allowing any of Lehman’s independent directors, who seem seldom to have asked a penetrating question, ever to serve on a corporate board again.

As I write, those 10 directors, who pulled down better than $100,000 cash a year to sit jointly in the driver’s seat for Lehman’s race to disaster, still boast at least 15 company directorships among them. Does this make you confident that corporate America is in good hands? Me neither.

It also should not make us confident that health care, and academic medicine, in the US and elsewhere, are in good hands. Hiltzik declined to name the members of the Lehman board, or identify the other organizations that they lead.  One can find a list of the directors who presided over the demise of Lehman in the company's 2008 proxy statement. It turns out that while they were presiding over Lehman's collapse, they also were presiding over the direction of some major health care organizations, to wit:

MICHAEL L. AINSLIE Director since 1996

Trustee of Vanderbilt University [including the School of Medicine]

JOHN F. AKERS Director since 1996

ROGER S. BERLIND Director since 1985

MARSHA JOHNSON EVANS Director since 2004

Ms. Evans served as President and Chief Executive Officer of the American Red Cross from August 2002 to December 2005.

RICHARD S. FULD, JR. Director since 1990

serves on the Board of Trustees of ... New York-Presbyterian Hospital

SIR CHRISTOPHER GENT Director since 2003

Non-Executive Chairman of GlaxoSmithKline plc.

JERRY A. GRUNDHOFER

Mr. Grundhofer is a director of Ecolab, Inc ["As a leader in infection prevention, Ecolab provides products, tools, training and service to healthcare facilities to help prevent the spread of healthcare acquired infections.]

ROLAND A. HERNANDEZ Director since 2005

HENRY KAUFMAN Director since 1995

a Member of the Board of Trustees of New York University [including the School of Medicine]

a Member of the Board of Governors of Tel-Aviv University [including the Sackler Faculty of Medicine]

JOHN D. MACOMBER Director since 1994

[Also, a member of the board of directors of Warren Pharmaceuticals, "a privately held biotech company, incorporated in 2001 for the purpose of developing proprietary tissue-protective technologies."

So, collectively, the confidence uninspiring members of the board of the now defunct Lehman Brothers also were on the boards of two major US and one major Israeli university that include well-known medical schools, one major health care related charity, one major British multi-national pharmaceutical company, a prestigious academic medical center, a large public for-profit US company with major health care interests, and a small, privately held biotechnology company. 

We have another vivid illustration in the aftermath of the global economic collapse, and in an ongoing health care crisis, how some of the problems of health care, and academic medicine in particular, may have been at least enabled by leadership more used to working in an increasingly amoral marketplace than to upholding the academic mission. All health care organizations, for-profit and not-for-profit, those in the US and those in other countries, need leaders who value their health care and academic missions more than simply the money they may bring in.

Post Title → Members of the Board of Now Bankrupt Lehman Brothers as Leaders of Health Care?

Boston University Back-Tracked on Conflict of Interest Guidelines

The Boston Globe reported how Boston University has back-tracked on its conflict of interest policy for its board of trustees. In April, 2004, the board approved new and more stringent guidelines, which barred financial relationships between trustees' companies and the university unless such a relationship "has been found to be of exceptional necessity to the university."
However, apparently the new guidelines were never implemented, and in December, the board enacted new relaxed guidelines that would allow such a relationship if it "has been found to be of clear benefit to the university." The new code of ethics resulting was only distributed to university staff last week.
In 2004, the chair of the board, Alan Leventhal, heralded the "very high standard" set by the "exceptional necessity" requirement. But the Globe reported that this week, Stephen Burgay, Vice President for Marketing and Communications, said that the board's audit committee found that the "exceptional necessity" requirement would be "unworkable."
The example given was that Boston University did $6 million in business with Lehman Brothers, while its Vice Chairman, Howard L. Clark Jr, was on the board.
Some trustees whose firms did business with the University have left, e.g., Gerald S. J. Cassidy, whose lobbying firm, Cassidy & Associates, got $1 million from Boston University last year.
However, Frederick H. Chicos, President and CEO of Chickering Group, which has been bought out by Aetna, is still on the board. Chickering is the only company allowed to provide health insurance to students. It received only $36,000 from the University last year. How much it got from University students for premiums is unknown. Also remaining on the board are executives for Barnes & Noble, and John Hancock Financial services, both of which did more than $1 million worth of business with the University.
One Boston University Professor commented that University officials' claimes that "they were trying to improve the public image and make people think they were cleaning up the place" were a "misrepresentation."
My comments are that allowing board members with such conflicts of interests makes it unclear whether they will put their companies' or the universities' interests first, and whether the university will put their companies' interests or its mission first.

Post Title → Boston University Back-Tracked on Conflict of Interest Guidelines