Investor Ackman backs bid by dissidents for Harvard board seats

[January 10, 2024]  By Svea Herbst-Bayliss

(Reuters) - Billionaire hedge fund manager William Ackman, who joined other Harvard graduates in successfully calling for the university's president Claudine Gay to resign, is pressing forward with his efforts to reshape the Ivy League school's governance by backing a bid by four dissident alumni to join its board of overseers.

The development represents a new challenge to the board, whose 30 members are typically nominated by the university's alumni association. Ackman's endorsement of the four write-in board candidates echoes his playbook as an activist shareholder, pursuing board seats at companies to push for changes.

The board is the school's second-highest governing body, with the power to approve or reject the hiring of Harvard's president. Each year, five seats on the board are up for election.

Ackman, who has donated about $50 million to Harvard, told Reuters in an interview he is endorsing Zoe Bedell, Logan Leslie, Julia Pollak, and Alec Williams - who variously earned undergraduate, law and business degrees from Harvard - in their campaign to join the board.

"Harvard needs to change. Bringing fresh young blood onto the board of overseers can help with that," Ackman said.

Ackman has criticized Harvard for not doing enough to protect its students from antisemitism incidents in the wake of the October attack by the militant Islamist Palestinian group Hamas on Israel and subsequent Israeli military operations in Gaza, as well as for the university's adoption of diversity and inclusion programs he argues stifle meritocracy.

The board candidates he is backing, Ackman said, are "talented, accomplished and motivated people, and their candidacy will serve as a wakeup call for Harvard." They range in age from 36 to 38, and all have served in the U.S. military.

A Harvard spokesperson did not immediately respond to a request for comment.

In a position paper reviewed by Reuters, the four candidates said they want the university to protect free speech, protect students from bullying and harassment, and address financial mismanagement, including at the school's $50.7 billion endowment. The endowment's investments delivered returns of 2.9% in fiscal 2023, deeply underperforming the broader market's nearly 20% gain.

Ackman has accused Harvard, located in Cambridge, Massachusetts, of mismanaging and wasting some of his gifts. His hedge fund Pershing Square Capital Management oversees $18 billion in assets, and returned about 27% last year.

Because Bedell, Leslie, Pollak and Williams are not being nominated by the Harvard Alumni Association, they must gather at least 3,300 signatures from Harvard graduates - equivalent to 1% of those entitled to vote - by the end of January to qualify to run for election to the board in the spring.

Turnout among Harvard graduates in such votes has been low, with the participation rate last year coming in at less than 8.1%, according to the Harvard Crimson, the student newspaper.

The last successful board challenges came in 2020 and 2021, when Harvard Forward, a coalition of graduates that urged the university's endowment to divest from fossil fuels, got four candidates elected on the board.

In 1989, dissident alumni backed a petition to elect Archbishop Desmond Tutu to the board in a push to get Harvard to divest its investment holdings in companies that did business in South Africa during the time of racial apartheid.

A view of Harvard campus on John F. Kennedy Street at Harvard University is pictured in Cambridge, Massachusetts, U.S., December 7, 2023. REUTERS/Faith Ninivaggi/File Photo

'OUTSIDERS WITH A MISSION'

Gay, the university's first Black president, stepped down on Jan. 2, just six months into her role, after facing allegations of plagiarism and a backlash over her congressional testimony about antisemitism on campus. Alan Garber, Harvard's provost and chief academic officer, was named interim president.

"While we are outsiders, we are outsiders with a mission for renewing the very heart of the university," Williams, a real estate entrepreneur and former Navy officer, told Reuters.

Williams said he got to know Ackman when he worked briefly at the investor's family foundation six years ago, before returning to his home state of Idaho.

Williams also knew Leslie, an entrepreneur in Atlanta, from business school and Bedell, an assistant U.S. attorney in the Eastern District of Virginia, from college. They said in interviews they discussed launching a campaign to join the board of overseers at the end of December, motivated by concerns about the university's direction. Williams began drafting their position paper on Christmas Eve.

Pollak, chief economist at online employment marketplace ZipRecruiter, was already running as a write-in candidate and then joined the group.

All four said they are driven by their love for Harvard, which has educated eight U.S. presidents, from John Adams to Barack Obama.

"The institution is not doomed, but it needs some outside voices on the board to demand better leadership in the administration," Leslie said.

The four candidates have said the endowment's most recent returns do not cover Harvard's operating costs, pushing undergraduate tuition to almost $80,000 annually, financially out of reach for most students. They want the endowment to perform at "market standards" and the school to cut administrative costs.

SIX-YEAR TERMS

The board of overseers is not as powerful as the Harvard Corporation, a smaller governing body with direct oversight over the university's operations, but still exercises influence. The primary tool of the overseers is the so-called visitation process, which lets them ask questions of Harvard's faculty and departments and carry out assessments.

Overseers serve terms lasting six years. In 2020, following the victory of the Harvard Forward candidates, the overseers and the Corporation jointly agreed to change the rules to make it harder for candidates to be elected without alumni association backing.

The overseers and Corporation argued that keeping nominations wide open let special interests hijack the process, akin to political campaigns. Only six overseers who got on the ballot through a petition are now allowed to serve on the board at any one time.

Others are also trying to mount write-in campaigns this year, including technology entrepreneur Sam Lessin and attorney Harvey Silverglate.

(Reporting by Svea Herbst-Bayliss in Providence; Editing by Greg Roumeliotis and Will Dunham)

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