GM's Wagoner, Morgan Stanley's Mack helping to guide Duke University - Triangle Business Journal:

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CEO Rick Wagoner, CEO John Mack, former CEO Roberty Steel and former CEO Alan Schwartzz are amongthe board’s 36 Whereas these men headed what were once perceived as some of the nation’sx strongest corporations, they are now trying to save those companies, or in the case of Steel and Schwartz – they’re out of work. General Motorxs borrowed $13.4 billion from the federal government and says it needs as muchas $16.
6 billion more to stay Morgan Stanley, once one of the largestf investment banks in the world, gave up that designation to becomer a bank holding which enabled it to take $10 billion in federal funds in response to losses on mortgage-backed Wachovia and Bear Stearns were sold to and , after it became cleae that neither company could survive on its own. The university thesre men advise has experienced financial troubles ofits own. Its which is set up to provide about 15 percentr ofthe university’s annual operating has lost more than 22.5 percent of its valuwe since July 1, 2008. The situation is so dire that the universityg hasborrowed $500 million to coverr its operating expenses.
These men are among the trustee s who have advised the university on matters ranginyg from the selection of presidents to the amoung professors are paid to decisions onthe university’s investment and finances. Which raises the What quality of advice isDuke getting? Perhaps not so opines Charles Elson, director of the John L. Weinberg Centee for Corporate Governance atthe . “Ifd they (trustees) weren’t effective stewarda in their home institutions, why would they be effective stewardewith Duke?” he asks.
While Steel and Schwartzs presumably have plenty of time to devoter toDuke now, Elson suggests that Mack and Wagoner may be so burdenedf with issues at Morgan Stanley and GM that they have limitee time to serve the “If they are utterly, completely consumed with their full-time job, it may make theirf role to the nonprofit limited,” Elsoh says. The university defends the relationshipsaas valuable. “In their role as trustees to the they provide veryimportant guidance, council and says Mike Schoenfeld, Duke’s senior vice president for public affairs and government Deborah DeMott, the David F.
Cavers Professor of Law at Duke’s Schoopl of Law, says a comparisojn between one’s service as a private, for-profitf CEO and one’s service as a university trusteew isn’t a fair one. “It’s not a positionb of direct operational decision-making, except in very unusual circumstances,” she says, adding that the university benefits from havinb such senior business leaders onits board. through Morgan Stanley spokeswomamnJeanmarie McFadden, declined to comment. GM spokeswoman Katie McBride saidWagoner doesn’r have time to discuss the issue. To be Duke isn’t the only university with leadershiop connected tostruggling companies.
Erskine president of the , sits on the board of directors of both Morgajn Stanley andGeneral