A matter of governance

Corporate boards are suddenly showing the backbone their many critics have been demanding for years. And big-name CEOs are falling like dominoes.

Just this week Hank Greenberg, the iron-willed boss of insurance powerhouse American International Group for the past four decades, was forced out by the board. He's in good company: Hewlett-Packard's Carly Fiorina, Fannie Mae's Franklin Raines, and Boeing's Harry Stonecipher, to name just three, were all dumped recently. Closer to home, Larry Lasser was quickly shown the door at Putnam Investments when the regulators came calling.

The old boardroom club is being replaced by a new culture of openness and skepticism. When the crunch comes, directors are lawyering up to protect themselves against personal liability. Independence, accountability, and transparency are the order of the day.

Compare that new model to the board that rules America's oldest and richest university. As the Larry Summers soap opera plays out in Cambridge -- including the remarkable vote of no confidence by the faculty of Arts and Sciences this week that may have changed everything -- the seven-member board that has governed the university for more than 300 years is looking very unlike the new order they are teaching over at the Harvard Business School. When the going gets tough, airy statements of support from the boardroom won't suffice anymore -- not in business, not in academia, either.

The President and Fellows of Harvard College, as it is formally known, is among the smallest university boards in the country. The board is self-perpetuating, selecting its own members. There are no term limits. It is a board Summers has helped handpick: Since he took office three new members -- Robert Rubin, James Rothenberg, and Robert Reischauer -- have joined the board. Another new member, Nan Keohane, is on the way.

I'm a Summers fan. He aims extraordinarily high and is more than willing to challenge conventional wisdom -- and has the wounds to prove it. But for a leader to lead, others must be willing to follow.

''There are presidents who try to lead with fear," former Harvard president Derek Bok says in Richard Bradley's new book, ''Harvard Rules." ''They are very tough, and they push their powers to the limit. And there are presidents who try to lead in other ways, by winning the respect and even the affection of the faculty."

Bok, who led Harvard for 20 years, says in the book his remarks are not intended to be interpreted as being about any particular president, but they seem very apt at the moment.

''A lot depends on this intangible relationship you have with the faculty," he says. ''If you can't at least persuade yourself that you have some reasonable amount of respectful attention from them, the job for anybody -- any satisfaction they get from the job -- is seriously impaired. Of course, you're the president for all the constituencies of the university, but especially for the faculty. You're one of them. You're killing yourself to make this a better place for them. And then they run around and say, 'You're a trivial person. I don't believe what you say. That windbag.' It takes the guts out of you. If they don't have respect for you, if they don't trust you, that's fatal."

I hope it is not fatal. But Harvard can't simply hunker down and tough it out. There are alternatives, even to Harvard: The people who come to Harvard to teach and the people who come to learn are among the best and the brightest. They are among the most mobile people on the planet.

Summers can try to run the place like a top-down chief executive. But Harvard also needs a board that's up to the job of the 21st century. Harvard's president just lost an astounding vote of confidence by the faculty. Would its board have fared any better?

Steve Bailey is a Globe columnist. He can be reached at bailey@globe.com or at 617-929-2902.