Tuesday, March 23, 2010

Members of the Board of Now Bankrupt Lehman Brothers as Leaders of Health Care?

In our own Providence Journal, Michael Hiltzik commented about the Valukas report on the fall of the once proud Lehman Brothers.  He asserted that one of the lessons learned from the case is the "folly of relying on self-discipline and self-regulation in the financial markets," particularly given the irresponsibility of the top leaders of financial corporations. In particular,
I’d love to hear an argument for allowing any of Lehman’s independent directors, who seem seldom to have asked a penetrating question, ever to serve on a corporate board again.

As I write, those 10 directors, who pulled down better than $100,000 cash a year to sit jointly in the driver’s seat for Lehman’s race to disaster, still boast at least 15 company directorships among them. Does this make you confident that corporate America is in good hands? Me neither.

It also should not make us confident that health care, and academic medicine, in the US and elsewhere, are in good hands. Hiltzik declined to name the members of the Lehman board, or identify the other organizations that they lead.  One can find a list of the directors who presided over the demise of Lehman in the company's 2008 proxy statement. It turns out that while they were presiding over Lehman's collapse, they also were presiding over the direction of some major health care organizations, to wit:

MICHAEL L. AINSLIE Director since 1996

Trustee of Vanderbilt University [including the School of Medicine]

JOHN F. AKERS Director since 1996

ROGER S. BERLIND Director since 1985

MARSHA JOHNSON EVANS Director since 2004

Ms. Evans served as President and Chief Executive Officer of the American Red Cross from August 2002 to December 2005.

RICHARD S. FULD, JR. Director since 1990

serves on the Board of Trustees of ... New York-Presbyterian Hospital

SIR CHRISTOPHER GENT Director since 2003

Non-Executive Chairman of GlaxoSmithKline plc.


Mr. Grundhofer is a director of Ecolab, Inc ["As a leader in infection prevention, Ecolab provides products, tools, training and service to healthcare facilities to help prevent the spread of healthcare acquired infections.]

ROLAND A. HERNANDEZ Director since 2005

HENRY KAUFMAN Director since 1995

a Member of the Board of Trustees of New York University [including the School of Medicine]

a Member of the Board of Governors of Tel-Aviv University [including the Sackler Faculty of Medicine]

JOHN D. MACOMBER Director since 1994

[Also, a member of the board of directors of Warren Pharmaceuticals, "a privately held biotech company, incorporated in 2001 for the purpose of developing proprietary tissue-protective technologies."

So, collectively, the confidence uninspiring members of the board of the now defunct Lehman Brothers also were on the boards of two major US and one major Israeli university that include well-known medical schools, one major health care related charity, one major British multi-national pharmaceutical company, a prestigious academic medical center, a large public for-profit US company with major health care interests, and a small, privately held biotechnology company. 

We have another vivid illustration in the aftermath of the global economic collapse, and in an ongoing health care crisis, how some of the problems of health care, and academic medicine in particular, may have been at least enabled by leadership more used to working in an increasingly amoral marketplace than to upholding the academic mission. All health care organizations, for-profit and not-for-profit, those in the US and those in other countries, need leaders who value their health care and academic missions more than simply the money they may bring in.

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