1 00:00:00,600 --> 00:00:03,560 Speaker 1: This is Bloomberg Markets Im Vonne Quinn along with the Shinalibasak. 2 00:00:04,040 --> 00:00:06,600 Speaker 1: It's time now for our Will Street Week daily segment. 3 00:00:06,800 --> 00:00:09,440 Speaker 1: Scott Blck, chairman at Green Hill and former chair at 4 00:00:09,440 --> 00:00:12,719 Speaker 1: the University of Pennsylvania, spoke with Bloomberg's David Weston about 5 00:00:12,720 --> 00:00:17,040 Speaker 1: how universities are responding to the backlash they've received regarding 6 00:00:17,040 --> 00:00:18,239 Speaker 1: anti Semitism. 7 00:00:19,000 --> 00:00:21,200 Speaker 2: We've had a bit of a crisis on some of 8 00:00:21,200 --> 00:00:24,640 Speaker 2: the leading elite universities in America in the last few months, 9 00:00:24,720 --> 00:00:26,680 Speaker 2: and we haven't had one in a long time. It's 10 00:00:26,720 --> 00:00:29,520 Speaker 2: really been a long period of quiet and progress at 11 00:00:29,520 --> 00:00:32,880 Speaker 2: those schools, and so there are a number of questions 12 00:00:32,880 --> 00:00:34,440 Speaker 2: that have been raised and haven't been raised in quite 13 00:00:34,440 --> 00:00:34,800 Speaker 2: a while. 14 00:00:35,800 --> 00:00:38,720 Speaker 3: And what about the response to people a little rusty? 15 00:00:38,760 --> 00:00:40,720 Speaker 3: I mean, I went to school back in the seventies 16 00:00:40,760 --> 00:00:43,320 Speaker 3: when there was a lot of this going on. In fact, 17 00:00:43,440 --> 00:00:46,440 Speaker 3: the administrations were used to dealing with demonstrations. Is part 18 00:00:46,440 --> 00:00:48,800 Speaker 3: of the issues that in fact the administrations haven't been 19 00:00:48,880 --> 00:00:50,159 Speaker 3: used to this day is to have to get the 20 00:00:50,240 --> 00:00:51,080 Speaker 3: rule book back out. 21 00:00:52,320 --> 00:00:55,160 Speaker 2: I think that's exactly right. And frankly, trustees haven't given 22 00:00:55,200 --> 00:00:57,720 Speaker 2: governance a thought in a very long period of time, 23 00:00:57,720 --> 00:01:00,000 Speaker 2: you don't tend to think about governance where everything's going groat. 24 00:01:00,200 --> 00:01:03,400 Speaker 2: But when you have something that creates a controversy, suddenly 25 00:01:03,480 --> 00:01:05,119 Speaker 2: people look back at that, and I think a lot 26 00:01:05,160 --> 00:01:07,960 Speaker 2: of trustees, you know, maybe have forgotten that the way 27 00:01:08,080 --> 00:01:12,080 Speaker 2: universities are governed, that it's a combination of trustees, a president, 28 00:01:12,160 --> 00:01:15,240 Speaker 2: and the administration, and also the faculty play an important role. 29 00:01:15,760 --> 00:01:18,679 Speaker 3: Well, we'll talk about that from about governance specifically, because 30 00:01:18,680 --> 00:01:21,480 Speaker 3: we've had, for example at pen but also Harvard other places, 31 00:01:21,840 --> 00:01:25,000 Speaker 3: donors really speak out very forcefully, even make demands, as 32 00:01:25,000 --> 00:01:27,720 Speaker 3: they would put it, about changes we've made. Back when 33 00:01:27,720 --> 00:01:29,440 Speaker 3: I was practicing law, I know you did as well. 34 00:01:29,480 --> 00:01:31,480 Speaker 3: We talk about a bad volleyball team. Wherever he goes 35 00:01:31,520 --> 00:01:34,400 Speaker 3: to the same position. What are the respective positions, if 36 00:01:34,440 --> 00:01:38,800 Speaker 3: it's done properly, of the trustees, the president, administration, the faculty, 37 00:01:38,840 --> 00:01:41,839 Speaker 3: and for that matter, donors, what should those positions be? 38 00:01:43,319 --> 00:01:45,880 Speaker 2: Look, I think to start with donors. I think donors 39 00:01:45,920 --> 00:01:49,200 Speaker 2: are absolutely free to give to whatever organizations they want 40 00:01:49,320 --> 00:01:51,320 Speaker 2: or not to, and to withhold for any reason they 41 00:01:51,400 --> 00:01:53,600 Speaker 2: choose to. But they're not shareholders, so I don't think 42 00:01:53,640 --> 00:01:56,120 Speaker 2: they should have a particularly loud voice on how a 43 00:01:56,200 --> 00:01:58,680 Speaker 2: university is run. There is a governance system that's set 44 00:01:58,720 --> 00:02:02,160 Speaker 2: in place for decades centuries in many cases, and that 45 00:02:02,200 --> 00:02:06,960 Speaker 2: involves really trustees, the administration, and the faculty. Historically, trustees 46 00:02:07,040 --> 00:02:10,720 Speaker 2: really focused on the financial viability of the organization. They 47 00:02:10,720 --> 00:02:14,079 Speaker 2: did the budget, they did review the audit of the financials, 48 00:02:14,080 --> 00:02:17,519 Speaker 2: they invested the endowment. They made sure that the entity 49 00:02:17,600 --> 00:02:19,400 Speaker 2: was going to be viable for the long term, because 50 00:02:19,400 --> 00:02:22,919 Speaker 2: these are meant to be perpetual institutions. Of course, the 51 00:02:22,960 --> 00:02:26,600 Speaker 2: president in the administration really run the business of the 52 00:02:26,680 --> 00:02:29,720 Speaker 2: university day today, and along with the faculty they run 53 00:02:29,760 --> 00:02:32,519 Speaker 2: all the academic affairs. And it's really been very rare 54 00:02:32,560 --> 00:02:35,799 Speaker 2: in my experience, really almost two decades on a board 55 00:02:35,840 --> 00:02:39,120 Speaker 2: of the university where the trustees get it all involved 56 00:02:39,120 --> 00:02:41,160 Speaker 2: in academics. So I think they need to be careful 57 00:02:41,720 --> 00:02:43,840 Speaker 2: about how much they reach into that area, and I 58 00:02:43,880 --> 00:02:46,560 Speaker 2: know faculty are very concerned that they not reached two 59 00:02:46,639 --> 00:02:47,639 Speaker 2: far into that area. 60 00:02:47,800 --> 00:02:50,480 Speaker 3: You mentioned two areas academics on the one hand, finances 61 00:02:50,520 --> 00:02:52,680 Speaker 3: and any other. Obviously, you're a prime example of somebody 62 00:02:52,720 --> 00:02:55,720 Speaker 3: who's really really knowledgeable in finance, and it makes sense 63 00:02:55,760 --> 00:02:58,240 Speaker 3: to have you on a board and indeed charable board. 64 00:02:58,560 --> 00:03:00,600 Speaker 3: There is a third area, though, which I would call 65 00:03:00,680 --> 00:03:04,000 Speaker 3: reputational risk. I mean existential risk of the institution that 66 00:03:04,120 --> 00:03:07,760 Speaker 3: maybe includes both academics and finances. But who should be 67 00:03:07,800 --> 00:03:10,120 Speaker 3: responsible for that and what sort of people do you 68 00:03:10,280 --> 00:03:12,640 Speaker 3: need at the table making those decisions? 69 00:03:13,919 --> 00:03:16,800 Speaker 2: Well, I think clearly if it's an existential sort of threat, 70 00:03:16,840 --> 00:03:18,560 Speaker 2: I mean everybody needs to be involved in that. I 71 00:03:18,600 --> 00:03:21,240 Speaker 2: don't think trustees can sort of seize control, nor can 72 00:03:21,240 --> 00:03:23,600 Speaker 2: the president do whatever the president wants to do, or 73 00:03:23,600 --> 00:03:25,720 Speaker 2: the faculty take charge either. It probably needs to be 74 00:03:25,760 --> 00:03:28,799 Speaker 2: everybody involved in something like that. But I don't think 75 00:03:28,880 --> 00:03:32,799 Speaker 2: trustees should overreact this in the situation of what could 76 00:03:32,840 --> 00:03:35,800 Speaker 2: be a short term crisis and take too much control. 77 00:03:35,840 --> 00:03:38,760 Speaker 2: And still needs to be a collaborative effort, because that 78 00:03:38,920 --> 00:03:42,320 Speaker 2: is the peculiar nature of governance in these institutions. They're 79 00:03:42,360 --> 00:03:45,080 Speaker 2: not public companies, and they really aren't run by public 80 00:03:45,080 --> 00:03:46,080 Speaker 2: companies historically. 81 00:03:46,400 --> 00:03:48,520 Speaker 3: By the way, there's another player that's got involved here, 82 00:03:48,520 --> 00:03:51,400 Speaker 3: and that's the United States Congress, because the president of 83 00:03:51,400 --> 00:03:55,040 Speaker 3: Pennsylvania as well as Harvard MIT will call before Congress, what, 84 00:03:55,160 --> 00:03:58,280 Speaker 3: if anything, is the proper role of the government and 85 00:03:58,400 --> 00:04:01,280 Speaker 3: try to influence the way this is handled on college campuses. 86 00:04:02,720 --> 00:04:04,680 Speaker 2: Well, I think the government has a very big role, 87 00:04:04,720 --> 00:04:07,240 Speaker 2: of course in public universities, and a smaller role in 88 00:04:07,320 --> 00:04:10,760 Speaker 2: private universities. But you know, governments get involved in a 89 00:04:10,760 --> 00:04:12,920 Speaker 2: lot of ways in any institution in American life, So 90 00:04:12,960 --> 00:04:14,960 Speaker 2: you have to be ready to deal with congressional or 91 00:04:15,000 --> 00:04:18,799 Speaker 2: other government inquiries when they come. And they do provide 92 00:04:18,800 --> 00:04:22,000 Speaker 2: financial support to even the most private of universities in 93 00:04:22,040 --> 00:04:24,120 Speaker 2: the sense of research funding and things like that. So 94 00:04:24,320 --> 00:04:26,839 Speaker 2: they're going to have their legitimate questions from time to 95 00:04:26,880 --> 00:04:31,040 Speaker 2: time and those need to be answered. But fundamentally, the 96 00:04:31,040 --> 00:04:34,640 Speaker 2: institutions we're talking about are private and they're run fundamentally 97 00:04:34,680 --> 00:04:38,280 Speaker 2: by the trustees, the administration of the university, and the faculty, 98 00:04:38,400 --> 00:04:40,480 Speaker 2: and that's worked for a long time. I mean, I 99 00:04:40,480 --> 00:04:43,520 Speaker 2: think it's important to remember, you know, elite universities in 100 00:04:43,560 --> 00:04:45,760 Speaker 2: America are the envy of the world. I mean, people 101 00:04:45,839 --> 00:04:48,640 Speaker 2: all over America go to great links to get into 102 00:04:48,680 --> 00:04:50,640 Speaker 2: these places, people from all over the world. Do you 103 00:04:50,680 --> 00:04:52,760 Speaker 2: don't see a lot of you know, kids from New 104 00:04:52,839 --> 00:04:55,680 Speaker 2: York City trying to go to a foreign university to 105 00:04:55,720 --> 00:04:57,320 Speaker 2: get their degree. You see a lot of them in 106 00:04:57,360 --> 00:05:00,000 Speaker 2: Europe and Asia, Latin America else where, are trying to 107 00:05:00,040 --> 00:05:02,159 Speaker 2: come to America to get a degree because they see 108 00:05:02,200 --> 00:05:03,039 Speaker 2: real value to that. 109 00:05:03,640 --> 00:05:07,160 Speaker 3: When problems develop in any large institution, that's corporations as 110 00:05:07,200 --> 00:05:11,320 Speaker 3: well as colleges, I always ask myself is it a 111 00:05:11,320 --> 00:05:14,239 Speaker 3: substantive problem or is it a communications problem? And often 112 00:05:14,279 --> 00:05:16,480 Speaker 3: it's a combination of the two. As you look back 113 00:05:16,480 --> 00:05:19,280 Speaker 3: at what's happened at pen, at Harvard, at MIT, how 114 00:05:19,320 --> 00:05:22,320 Speaker 3: much of this is really a substantive underlying question of 115 00:05:22,440 --> 00:05:24,919 Speaker 3: values and what the rules are, as opposed to not 116 00:05:25,080 --> 00:05:28,480 Speaker 3: being clear enough and exactly where everybody is and what 117 00:05:28,520 --> 00:05:29,360 Speaker 3: the rules should be. 118 00:05:30,920 --> 00:05:33,720 Speaker 2: I think it's probably a fairly substantive issue. I mean 119 00:05:33,720 --> 00:05:36,800 Speaker 2: communications is always a part of these things as well, 120 00:05:36,839 --> 00:05:38,800 Speaker 2: but I think it's a fairly substant of issue. And 121 00:05:38,839 --> 00:05:41,480 Speaker 2: I think the biggest factor, the biggest challenge, really has 122 00:05:41,520 --> 00:05:44,159 Speaker 2: been that we haven't had any sort of a crisis 123 00:05:44,200 --> 00:05:45,880 Speaker 2: or controversy in quite a long time. I mean, you 124 00:05:45,960 --> 00:05:48,479 Speaker 2: referred earlier to the nineteen sixties. That's a long time ago, 125 00:05:48,560 --> 00:05:50,520 Speaker 2: well before I went to school or you went to school. 126 00:05:51,040 --> 00:05:52,800 Speaker 2: But you know, there is a lot of unrest on 127 00:05:52,880 --> 00:05:56,160 Speaker 2: campuses back then, and frankly, since then, it's been relatively quiet. 128 00:05:56,160 --> 00:05:58,760 Speaker 2: I mean, there have not been that many controversies. There 129 00:05:58,760 --> 00:06:01,400 Speaker 2: have not been that many moments when trustees asked about 130 00:06:01,440 --> 00:06:03,279 Speaker 2: governance or what their role should be. There are not 131 00:06:03,360 --> 00:06:06,920 Speaker 2: many many moments when I think faculty felt threatened by 132 00:06:06,960 --> 00:06:10,640 Speaker 2: trustees and what role or donors and what role they 133 00:06:10,720 --> 00:06:14,160 Speaker 2: might like to play. And so when something suddenly comes along, 134 00:06:14,360 --> 00:06:17,240 Speaker 2: you know, everybody doesn't remember their role anymore because they 135 00:06:17,240 --> 00:06:19,159 Speaker 2: haven't thought about their role in quite a while. Things 136 00:06:19,200 --> 00:06:21,240 Speaker 2: just kind of hummed along quite quite nicely. 137 00:06:21,839 --> 00:06:24,200 Speaker 3: In the nineteen sixties and into the seventies. Part of 138 00:06:24,200 --> 00:06:26,120 Speaker 3: what we saw in college campus was a reflection more 139 00:06:26,120 --> 00:06:28,599 Speaker 3: broadly what was going in society. I wonder if that's 140 00:06:28,640 --> 00:06:31,880 Speaker 3: part of what we're seeing now, because generally across society 141 00:06:32,080 --> 00:06:35,560 Speaker 3: there is more polarization. People are more outspoken, they're more 142 00:06:35,880 --> 00:06:38,400 Speaker 3: actually of course with one another in the nature of 143 00:06:38,400 --> 00:06:42,359 Speaker 3: the discourse. And if that's right, what can campuses do, 144 00:06:42,440 --> 00:06:44,880 Speaker 3: what can colleges do maybe to help us more broad 145 00:06:44,960 --> 00:06:46,800 Speaker 3: in society deal with some of these issues. 146 00:06:48,080 --> 00:06:50,479 Speaker 2: Look, I think that's a major factor here. There we 147 00:06:50,560 --> 00:06:53,280 Speaker 2: are in a more divided society, and the divisions tend 148 00:06:53,360 --> 00:06:55,279 Speaker 2: to be quite deep, and people tend to see things 149 00:06:55,279 --> 00:06:57,359 Speaker 2: in a black or white way. There's a lot of 150 00:06:57,480 --> 00:07:00,200 Speaker 2: the voices you hear are on the extreme right. You're 151 00:07:00,200 --> 00:07:02,960 Speaker 2: at the extreme right, the extreme left. I do think 152 00:07:02,960 --> 00:07:05,000 Speaker 2: it's important, and I've tried to convey in some of 153 00:07:05,000 --> 00:07:07,720 Speaker 2: the comments I've made in recent days and weeks that 154 00:07:08,120 --> 00:07:10,560 Speaker 2: you know, what you see on social media, what you 155 00:07:10,680 --> 00:07:13,080 Speaker 2: see maybe in a newspaper quote, what you see in 156 00:07:13,120 --> 00:07:15,880 Speaker 2: a clip on television is a very small part of 157 00:07:15,920 --> 00:07:18,720 Speaker 2: what actually happens on campus. I mean, as with anything 158 00:07:18,720 --> 00:07:22,080 Speaker 2: else in life, the noisiest people get the most attention, right, 159 00:07:22,160 --> 00:07:25,840 Speaker 2: So it's a small fraction of one percent of the 160 00:07:25,880 --> 00:07:28,960 Speaker 2: people at these elite schools that are really actively involved 161 00:07:28,960 --> 00:07:31,520 Speaker 2: in a way that anybody would find troubling. You know, 162 00:07:31,680 --> 00:07:34,360 Speaker 2: ninety nine percent of those students are going about their business, 163 00:07:34,440 --> 00:07:36,040 Speaker 2: trying to get a degree, trying to get into a 164 00:07:36,080 --> 00:07:38,400 Speaker 2: law school or med school, or get a job at 165 00:07:38,400 --> 00:07:41,000 Speaker 2: Golden Sachs or teach for America, and they're really not 166 00:07:41,200 --> 00:07:43,480 Speaker 2: that involved in this. But you can get a sense 167 00:07:43,520 --> 00:07:46,400 Speaker 2: from the outside, particularly if you're looking at Instagram or 168 00:07:46,440 --> 00:07:49,640 Speaker 2: Facebook or just you know, reading the tabloids or something. 169 00:07:49,640 --> 00:07:51,640 Speaker 2: You're going to get a different view about what's happening 170 00:07:51,640 --> 00:07:52,440 Speaker 2: on these campuses. 171 00:07:52,760 --> 00:07:55,200 Speaker 3: Scott Clue. You've thought through these issues a lot, You've 172 00:07:55,200 --> 00:07:57,440 Speaker 3: been on the inside looking at them. You have a 173 00:07:57,480 --> 00:08:00,320 Speaker 3: lot of very reasonable sounding thoughts about what should be done, 174 00:08:00,320 --> 00:08:02,600 Speaker 3: what should not be done. Why do you step down 175 00:08:02,760 --> 00:08:05,800 Speaker 3: because you could still contribute to the solution? Could you not? 176 00:08:07,720 --> 00:08:09,920 Speaker 2: I could, certainly. I mean, I felt like our board 177 00:08:09,960 --> 00:08:12,560 Speaker 2: got particularly divided at one point, and I felt like, 178 00:08:12,680 --> 00:08:14,920 Speaker 2: clearly there is a debate, and it's not just a pend, 179 00:08:14,920 --> 00:08:17,920 Speaker 2: it's a number of schools across America about the role 180 00:08:18,120 --> 00:08:21,800 Speaker 2: of trustees, faculty administration, and managing universities. I think that's 181 00:08:21,800 --> 00:08:24,280 Speaker 2: a very important debate, and frankly, I felt like I 182 00:08:24,280 --> 00:08:26,760 Speaker 2: could contribute more to that debate from the outside than 183 00:08:26,800 --> 00:08:28,600 Speaker 2: the inside. You know, if you're the chair of an 184 00:08:28,600 --> 00:08:31,600 Speaker 2: institution that has, in our case, almost fifty trustees, you 185 00:08:31,680 --> 00:08:33,720 Speaker 2: have to speak for that whole group. You can't. You 186 00:08:33,720 --> 00:08:35,640 Speaker 2: have to be very very careful what you say because 187 00:08:35,640 --> 00:08:38,080 Speaker 2: you're speaking for the whole entity, a whole large group 188 00:08:38,120 --> 00:08:40,720 Speaker 2: of trustees. If you're on the outside, you can speak 189 00:08:40,720 --> 00:08:43,640 Speaker 2: more freely. And I think I have contributed and hopefully 190 00:08:43,679 --> 00:08:47,240 Speaker 2: even these comments here will help people understand that there's 191 00:08:47,280 --> 00:08:50,959 Speaker 2: not a huge crisis. It's a small percent, very very 192 00:08:50,960 --> 00:08:53,040 Speaker 2: small percent of the students that are doing things that 193 00:08:53,080 --> 00:08:56,040 Speaker 2: would be troubling for most people. Yes, there are things 194 00:08:56,040 --> 00:08:58,960 Speaker 2: you can do about that, but we shouldn't fundamentally tear 195 00:08:59,040 --> 00:09:01,520 Speaker 2: up a governance model that's worked for a very very 196 00:09:01,559 --> 00:09:04,200 Speaker 2: long time and made our universities the envy of the 197 00:09:04,240 --> 00:09:06,880 Speaker 2: world because of a very short term crisis 198 00:09:07,200 --> 00:09:10,520 Speaker 1: That was Scott Bob chairman and at Greenhill and Bloomberg's 199 00:09:10,559 --> 00:09:11,200 Speaker 1: David Weston