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The Academic-Industrial Complex

The University of Minnesota recently had a sitting dean of the medical school on the board of Pepsi (I know that is hard to believe), so today's article in the New York Times is very relevant:

While academics can often bring fresh perspectives, managerial experience and the imprimatur of a respected institution to a board, they are also serving in an era when corporations wrestling with fallout from the financial crisis (think Bank of America, Citigroup and Goldman Sachs) or very public mishaps (think BP, Johnson & Johnson and Toyota) have raised the stakes for board members expected to guide corporations.

Some analysts worry that academics are possibly imperiling or compromising the independence of their universities when they venture onto boards. Others question whether scholars have the time -- and financial sophistication -- needed to police the country's biggest corporations while simultaneously juggling the demands of running a large university.

According to James H. Finkelstein, a professor in the George Mason School of Public Policy, probably the biggest reason companies have sought out academics is the prestige they bring. Universities are among the few institutions trusted by the public, he says, and companies believe they can associate themselves with this quality by installing an academic on the board.

John Gillespie, who has written a book on corporate boards, "Money for Nothing," says academics are often selected for another reason -- because they are less likely to rock the boat than directors from the business world.

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