University News

Simmons defends Goldman ties

By
News Editor
Monday, October 10, 2011

Four years after signing off on a $68 million executive bonus at the height of the economic boom and two years after parting ways with Goldman Sachs amid a recession, President Ruth Simmons said she does not feel her decade-long tenure on Goldman’s board has negatively impacted the University.

Simmons joined the board in 2000 when she was president of Smith College and stepped down a year and a half ago, saying she wanted to devote more time to Brown. The New York–based investment bank was suffering harsh criticism at the time for doling out high bonuses to its executives after receiving money from the federal bailout program.

As one of Goldman’s 10 directors and a member of its compensation committee, Simmons shared responsibility for determining and approving the compensation for the bank’s CEO and executives, including CEO Lloyd Blankfein’s $68 million bonus in 2007.

Two weeks after Simmons announced she would not stand for re-election to Goldman’s board, a New York Times feature portrayed a campus outraged over Simmons’ association with Goldman and painted a picture of a “bogeyman of Wall Street” lurking “behind the wrought iron gates” of Brown.

When asked whether her service on Goldman’s board has ever cast the University in a negative light, Simmons said she “can’t imagine” how it could have, though she admitted she tends not to read what others write about her.

“I’m not the person to judge, but I have never been unwilling to have responsibility for what I do,” she said. “Everything I do and everything I say is subject to people’s judgment. I’m entirely comfortable with that.”

Prior to leaving Goldman’s board, Simmons said in a February 2010 interview with The Herald that negative publicity she received would not hurt the University’s reputation.

“I can explain the reason I was on the Goldman board — because both Brown and Smith encouraged me to be on the board — and that is all I can say,” Simmons said last week. “And if I thought for a minute that my being president of Brown served Brown poorly or was an embarrassment to Brown, I would have been gone a long time ago. It’s not my intent to embarrass the University. Quite the contrary, I think my being president of Brown has lifted Brown. So I’m comfortable with that entirely, and that’s all I have to say about it.”

Simmons declined to speak on how involved she was in compensation discussions.  She also declined to comment on the theory that giving Wall Street executives exorbitant pay to reward short-term profits could have contributed to the poor decision-making that precipitated the financial meltdown.

She said she thinks her separation from Goldman is not adversely affecting the company’s recruiting on campus, noting that Goldman has a much longer relationship with Brown than she does.

“If you look at the history, there are a lot of people who have left Brown and gone to Goldman,” Simmons said. “That’s been going on for a long time and has nothing to do with me whatsoever.”

A LinkedIn search for profiles listing Brown as their education and Goldman as a current or past employer turned up more than 300 matches.

“I don’t think their recruiting here has anything to do with me at all, actually,” Simmons continued. “They recruit everywhere, and one of the things that (Goldman) says about Brown students is they like Brown students for the same reason other companies like Brown students: They tend not to be cookie-cutter. That means they can walk into an organization and they can think for themselves and add value because they have not had the traditional educational program in which they have been passive learners.”

Simmons still serves on the board of Texas Instruments. She did not say whether she plans to continue after her presidency, citing Securities and Exchange Commission insider trading policy. Simmons joined Texas Instruments’ board in 1999. She also served on Pfizer’s board from 1997 to 2007.

She credited her service on the three boards with instilling more courage in her.

“I’m essentially a pretty shy, pretty retiring person — very much an introvert,” she said. “I would say the one thing that boards have enabled me to do is to be a little bit bolder than probably I would have been.”