After a decade of service, President Ruth Simmons has chosen not to seek re-election to Pfizer’s board of directors, citing increased duties at the University, the pharmaceutical giant announced last month.
Simmons also serves on the boards of Goldman Sachs and Texas Instruments, and she previously held a seat on the board of MetLife, Inc. She was first elected to Pfizer’s board of directors in 1997, while she was president of Smith College.
Simmons told Pfizer’s board of directors Feb. 21 that she will not seek another term “due to her increased responsibilities” at Brown, according to the company’s recent filings with the Securities and Exchange Commission. She will continue to serve on the Pfizer board until April 26, when the company holds its annual election of directors.
University and Pfizer officials could not be reached for comment.
University officials hinted to the Wall Street Journal on Feb. 24 – three days after Simmons told Pfizer she would not seek re-election to its board – that the president was considering reducing her corporate activities, adding that her work on corporate boards had not affected her job performance at Brown.
In a September interview about her corporate board responsibilities, Simmons told The Herald that her priority is her duties at the University.
“In talking to each of the boards, I made clear that obviously my responsibility to Brown came first. If it got to the point where I could not go to the meetings because of my obligations at Brown, I would drop the boards – this is a no-brainer,” Simmons said. “I give every day, long days, every weekend to Brown … but I do get my own time like anyone who works.”
“It would be easier for me without a question – not better – if I didn’t have the board responsibilities,” Simmons said in September. But board directorships bring her and the University benefits that outweigh the costs of such commitments, she said.
According to the company’s recent proxy statement, Pfizer’s full board met nine times and its corporate governance committee, of which Simmons is a member, met 10 times. Directors attended 90 percent of the company’s board meetings, the report said.
People often underestimate the commitment required of corporate board members, who are not only legally liable for the company’s conduct but also for maintaining strong knowledge of its finances and strategies, said Nell Minow, editor of the Corporate Library, an interest group that collects data on corporate governance. Service on a corporate board typically demands upward of 300 hours per year, Minow told The Herald.
New regulations such as the 2002 Sarbanes-Oxley Act have also imposed new requirements in corporate governance, such as stricter auditing methods and greater accountability for boards of directors, Minow added.
Simmons certainly isn’t the only university president on a corporate board. According to a November 2005 survey of 688 college presidents in the Chronicle of Higher Education, 31.8 percent of college presidents sit on a corporate board, while 12 percent sit on more than one and 1.2 percent sit on four or more boards.
Minow said leaders in academia joining corporate boards is a long-running trend but that in recent years, presidents have been joining more boards than ever to garner support for their schools. Serving on a corporate board lends academic stature to companies, and in return, university presidents are afforded networking opportunities and access to potential donors.
“College presidents joining corporate boards has become more prevalent. But they are stuck on the audit committee or the compensation committee, where they really don’t know very much,” Minow said. “Oftentimes the deal is college presidents … won’t rock the boat on corporate boards, and they are able to get a lot of support from that company for their school.”
According to the Chronicle’s analysis of its survey, the typical college president serves on the boards of local or regional companies – not necessarily the world’s largest corporations – and brings in modest funds from retainer fees and stock options. Simmons, who earned $199,801 in retainer fees and stock from Pfizer, and other presidents of other top-tier universities are among a select few who serve large international firms.