Ruth Simmons stole my column idea.
I was all excited this week to pile another column on to her Goldman Sachs nightmare, writing about why serving simultaneously as a director on the board of the world’s most infamous investment bank and as president of a university that keeps its investments secret from everyone might be something of an ethical problem. Just imagine: you’re an investment officer deciding where to put Brown’s money, your boss sits on the board of one of your most obvious options, and no one in the rabble can hold you accountable. It’s not too hard to figure out where you’re going to put that money.
Presuming that Simmons wasn’t about to give up her cushy and well-connected $323,000-a-year gig as a Goldman director just because I asked her, I was going to cite her severe conflict of interest as the perfect example of why Brown needs real investment transparency reform — the kind that would let us see whether our hypothetical investment officer was investing our money intelligently or handing it over to a particular company that has been in the news lately for doing one thing with its clients’ money and betting against them with its own.
But then she quit.
Of course, she claims she quit to respect her “increasing time requirements associated with her position as President,” which I suppose is what she has to say. But what I know is that her decision comes suspiciously soon after she faced campus scrutiny over her directorship for the first time since Goldman Sachs became the pariah of Wall Street. Two months ago, no one knew about her Goldman connection, much less discussed it. Now it fills the Herald for a few weeks, and all of a sudden she gives up a post that has been hers for over 10 years.
Besides, as some pointed out in the media hoopla over the last few weeks, her role at Goldman was in effect one of her “time requirements associated with her position as President.” Depending on who you ask, she served as a director to bring her enlightened “background in education” to Wall Street or because “Brown benefits from Simmons’ role in the financial sphere.” Either way, her directorial role was intimately tied to her presidential day job, and one could well argue that she was discharging her duties as President every time she hobnobbed with the wealthy patrons at Goldman or helped bring their recruiters to campus.
So it’s most likely that the combination of relentless campus attention and near-weekly revelations about the unconscionable garbage Goldman Sachs managed to pull off over the last few years was enough for Simmons to realize that her directorial position was untenable. And I know at least a few alumni made sure to register their displeasure with the disrepute her relationship with Goldman had brought upon their university.
But whatever your reasons, Ruth, you did the right thing. No longer will Goldman be able to point to your “unique sensitivity to the views of women, minorities and young people” as “one of two women on the board (and) the only African American” to help excuse its billions in bonuses and corrupted government manipulation. Brown won’t have to suffer for its president’s high profile dalliances with the worst robber barons of our age. And maybe that $323,000 lopped off your annual income will help make you a little more sympathetic to the families whose tuition payments you’re almost certainly going to hike again later this month.
Unfortunately, though, Simmons’ resignation does not end her relationship with Goldman. According to a U.S. Securities and Exchange Commission filing from the firm in February, she owns 27,386 shares of Goldman stock, worth $4.2 million. Upon the end of her term as a director, she has an option for an additional 10,000 shares that would up her investment stake to $5.7 million. That leaves her with enough of a vested interest in Goldman’s continued profitability that the integrity of the University’s secret investments must remain in question. Until those investments are transparent and open, we have no way of knowing whether she is wielding undue influence over Brown’s investment decisions.
But Simmons’ sudden departure from Goldman improves our chances of winning those necessary reforms. Her resignation is evidence to the fact that positive change at this university happens not through unprompted voluntary action by benevolent administrators but through sustained community pressure. We get angry, and they listen. And if that anger is enough to shake up Goldman Sachs, repairing our university should be no problem.
Simon Liebling ’12 is from New Jersey. He can be reached at simon.liebling(at)gmail.com.