The Right Coast

February 15, 2006
Wanted: Board Members Who Will Rubberstamp Management's Plans
By Gail Heriot

The San Diego Union-Tribune ran a front-page story today about UC administrators who sit on the boards of numerous corporations and nonprofits. The story suggested that the UC may not be getting its money's worth from its most highly-compensated administrators, because they spend so much of their time jetting around the country to attend corporate board meetings.

The strongest example of this, according the Union-Tribune, is Marye Anne Fox, UCSD Chancellor, who sits on 10 boards, including W.R. Grace & Co., Boston Scientific Corp., Pharmaceutical Product Development and six non-profits. (Yes, I recognize that adds up to nine, not ten, but that's what's the earlier story said.) She spent 21 days last year traveling to and from and attending board meetings and got paid $339,260 in cash and stock for her efforts.

Fox argues that her board service doesn't interfere with her duties at UCSD (and in fact enhances the university's profile). Maybe she's right. One school of thought is that university administrators should go out of their way to sit on the board of non-profits, since it may allow them to tap into fundraising sources that might otherwise be unavailable to the school. Ditto for profit-making corporations. (Personally I have my doubts that the advantage to the school is worth the school's time.) What's interesting to me is how it possibly could be worth it to the corporations and non-profits. What are the odds that she is energetically fulfilling the independent supervisory function of a director if she is sitting on 10 boards, presumably trying to turn her position to UCSD's advantage, and simultaneously trying to discharge her duties as UCSD chancellor (a job that pays her $359,000)? If she spent just 21 days on these matters, can she be anything better than a rubberstamp? Yes, I know what you're thinking: Board members all over the country are just rubberstamps (when they don't have actual conflicts of interest). Sigh.