Simmons: No pressure to leave G. Sachs

BROWN PRESIDENT Ruth Simmons earned $450,876 from Goldman Sachs and $165,757 from Texas Instruments last year for serving on their boards. /
BROWN PRESIDENT Ruth Simmons earned $450,876 from Goldman Sachs and $165,757 from Texas Instruments last year for serving on their boards. /

PROVIDENCE – Brown University President Ruth Simmons said local media coverage of her ties to Goldman Sachs Group Inc. had no impact on her decision to step down from the bank’s board of directors last month.

Simmons declined to stand for re-election to the board in May, citing time demands, amid student criticism of her connection with the company, which was involved in the Wall Street meltdown.

Brown students expressed concern that Simmons’ involvement as a Goldman Sachs board member tainted the university, said Simon Liebling, 20, a columnist with the Brown Daily Herald, the student newspaper. “When Goldman became a pariah of Wall Street and poster boy for greed and excess, Brown was tied up in that,” he said.

Simmons, 64, joined the Goldman Sachs board in January 2000, while she was president of Smith College in Northampton, Mass.

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Simmons was a member of Goldman Sachs’ compensation committee, according to company filings. In 2007, the group approved a $67.9 million bonus, still a Wall Street record, for Chairman and CEO Lloyd Blankfein.

The U.S. Securities and Exchange Commission said in a lawsuit in April that Goldman Sachs had misled investors in mortgage-linked securities designed to benefit a favored client at others’ loss. The company denied wrongdoing.

Goldman Sachs said in February that Simmons wouldn’t stand for re-election because of her need to spend more time at Brown. Simmons said in an interview that criticism in the student newspaper about her tie to the bank had “zero” to do with her decision. She remains a director of Dallas-based Texas Instruments Inc., the second-largest U.S. maker of computer chips.

“Right now, the idea is I might be able to handle one” directorship, Simmons said in an interview. “It’s not complicated, if you know the semiconductor industry.”

Goldman Sachs granted Simmons stock and stock options worth $450,876 last year, according to a Securities & Exchange Commission filing. Her compensation at Texas Instruments was $165,757 last year, including $90,000 in cash, according to a filing.

Simmons is one of five presidents in the Ivy League who serve on for-profit boards – one for each president – according to the universities. The Ivy League consists of eight institutions in the northeast United States.

Across the country, college presidents are struggling to reconcile the demands and values of academia with shareholder skepticism about their boardroom commitments.

“For university presidents, sitting on a corporate board used to be a résumé enhancer and a networking opportunity,” Nell Minow, chairman of the Corporate Library, a Portland, Maine, company that evaluates board performance, said in an interview. “Now it is a genuine and very demanding task with some daunting liability – reputational and financial.”

Companies recruit college presidents to add independent voices on boards dominated by corporate officers. Shareholders question the college leaders’ availability for board tasks. Campus critics say chancellors, provosts and presidents should be focusing on budget cuts and shrunken endowments, and are tainted by the behavior of companies they serve.

Simmons is not the only local college president who serves on a corporate board. Johnson & Wales University President John J. Bowen serves on the board of The Providence Journal Co., and previously served on the board of Citizens Bank’s Rhode Island and Massachusetts division, according to his official biography.

Bryant University President Ronald K. Machtley serves on the board of Amica Mutual Insurance Co. Sister M. Therese Antone, former president of Salve Regina University, serves on the boards of Lifespan Corp., BankNewport and Beacon Mutual Insurance Co.

PBN Web Editor Ted Nesi contributed to this report.

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1 COMMENT

  1. Has anyone asked Simmons what she thinks about the Goldman Sachs food commodities index that pushed food prices so high that millions of poor people starved, including in Africa? Oh, I get it, GS recruits at Brown and donates big bucks so starving the poor is OK.