Corporate bosses are putting university presidents on edge

University leaders fail to calm angry donors

The leaders of Harvard, MIT and the University of Pennsylvania are facing mounting pressure following their disastrous testimony before Congress this week about anti-Semitism on college campuses. It is about their legalistic answers to the question of whether students who call for genocide of the Jews should be disciplined. (Liz Magill of Penn and Claudine Gay of Harvard later apologized for their testimony.)

Magill appeared the most vulnerable of the three as the school’s administrators debated her future — while the influential board of advisors at Wharton, the university’s business school, called for her to resign.

A firestorm is growing over the testimonies in Washington and beyond. Republicans in the House of Representatives announced an investigation into the “learning environments” at the three schools, with the possibility of subpoenas. Doug Emhoff, the husband of Vice President Kamala Harris, said the administrators’ “lack of moral clarity is simply unacceptable.”

Business leaders also expressed their outrage. Ross Stevens, a hedge fund manager who has already criticized Penn’s curriculum, said he would withdraw a $100 million gift To the school. Billionaire investor Bill Ackman, who has publicly condemned Harvard students who he said blamed Israel for the October 7 Hamas attacks, called on the presidents of all three universities are being laid off.

And David Wolpea prominent rabbi, resigned from Harvard’s anti-Semitism advisory committee, saying anti-Jewish ideology was so entrenched that he didn’t think he could make the kind of difference he had hoped.

Penn ‘needs new leadership immediately’ Wharton’s board of advisors wrote to Magill this week. Although the board can only make recommendations, its voice is influential: its chairman, Marc Rowan of Apollo Global Management, has called on alumni to withhold donations to Penn. Moreover, three Wharton board members – David Blitzer of Blackstone, Jamie Dinan of York Capital Management and Alberto Duran of Mundivox Communications – are also Penn administrators.

It’s not clear what the Penn trustees will do with Magill. During an emergency call Thursday, they did not vote on whether to oust her, but urged her and other school leaders to more clearly articulate the university’s values.

But some on Penn’s board suggested further action was needed: Governor Josh Shapiro of Pennsylvania, a non-voting member, urged fellow administrators to decide whether Magill’s testimony reflected the school’s values. “I expect they will meet again in the coming days, and I expect they will consider that question carefully,” he told reporters.

The backlash against the presidents of Harvard and MIT has not gone that far. Wolpe said Harvard’s Gay was a “kind and thoughtful person” and stopped short of calling for her to resign. And MIT’s executive committee said that Sally Kornbluth, the school’s president, “our full and unconditional support.”

• In related news: Sam Altman, the CEO of OpenAI, wrote on He added: ‘I still don’t understand it actually. Or know what you can do about it.”

HERE’S WHAT’S HAPPENING

The UK antitrust watchdog will review Microsoft’s relationship with OpenAI. The Competition and Markets Authority said it would investigate whether actions including Microsoft’s $10 billion investment in ChatGPT maker, which gave it a 49 percent stake in the company, constituted a “acquisition of controlThat amounted to a de facto merger. (Brad SmithMicrosoft’s president said his company’s relationship with OpenAI was “very different” from, say, Google’s acquisition of AI lab DeepMind.) The review is the most prominent effort yet to highlight the partnership between two leading AI developers to examine.

Hunter Biden faces new tax evasion charges. A federal grand jury on Thursday indicted President Biden’s son, accusing him of schemes to avoid paying federal taxes on millions in income from foreign companies. This latest set of charges against Hunter Biden carries a maximum penalty of 17 years in prison.

Binance founder must remain in the US before being sentenced. A federal judge ruled that Changpeng Zhao posed a flight risk, overturning a magistrate judge’s decision that the crypto mogul could return to Dubai, where his family lives. Zhao pleaded guilty last month to money laundering as part of an elaborate settlement involving Binance, the world’s largest cryptocurrency exchange.

A bankrupt truck giant rejects a takeover bid. Yellow, which filed for Chapter 11 protection this summer, said a trucker proposal to revive the company was “not viable.” Yellow added that the bid did not appear to have the support of creditors, including the Treasury Department, which had extended a $700 million loan during the pandemic.

Nikki Haley continues to raise money from business leaders. Executives at Bain Capital and Solamere Capital will do so organize a fundraiser for the former South Carolina governor next week, according to Bloomberg, in the latest sign of Haley’s rise within the Republican presidential primaries. Meanwhile, a super PAC supporting Ron DeSantis a donor event cancelled this week, reportedly due to a lack of interest.

The OpenAI director at the center of Altman’s ouster speaks

One of the central characters in the short-lived coup at OpenAI last month was Helen Toner, an artificial intelligence researcher and then-board member, who had clashed with Sam Altman, the company’s CEO.

A summary: Altman was fired and briefly hired by Microsoft; OpenAI employees – including the chief scientist who initially supported firing the CEO – threatened to quit en masse; Altman was reinstated; and most of the board, including Toner, resigned. This all happened within five days.

In a interview with The Wall Street JournalToner didn’t go into details, but said the board’s loss of confidence in Altman meant firing him would meet the organization’s goal of developing AI responsibly:

At one point during the heated negotiations, a lawyer for OpenAI said the board’s decision to fire Altman could lead to the company’s collapse. “That would actually be consistent with the mission,” Toner responded at the time, startling some executives in the room.

In the interview, Toner said that comment was in response to what she considered an “intimidation tactic” by the attorney. She says she was trying to make the point that OpenAI’s continued existence isn’t necessarily necessary to the nonprofit’s broader mission, which is to create artificial general intelligence that benefits humanity as a whole. A concurrent concern among researchers is that AGI, an AI system that can perform tasks better than most humans, could also cause harm. We want your feedback! Send your ideas and suggestions by email to dealbook@nytimes.com.

“BlackRock was mentioned by some candidates in last night’s debate as more than inflation or the national debt. That’s a sad commentary on the state of American politics.”

— Larry Fink, CEO of BlackRock, on LinkedIn. Both Florida Governor Ron DeSantis and entrepreneur Vivek Ramaswamy used the money management giant and its embrace of environmental, social and corporate governance issues in investing, known as ESG, as political punching bags in Wednesday’s Republican primary debate.

Ralph Nader’s Best CEOs

Consumer advocate Ralph Nader has made a career of criticizing companies and CEOs progressive laws to make food, water, work and travel safer. Now the 89-year-old lawyer has stepped up a gear: he’s singing the praises of exceptional business leaders.

Nader’s latest book, “The rebellious CEO: 12 leaders who did it right,” examines the work of executives he believes have done a good job running their companies, including Anita Roddick of The Body Shop, Yvon Chouinard of Patagonia, and John Bogle of Vanguard.

The book itself is an example of Nader’s rebellious nature: he told DealBook’s Ephrat Livni that publishers had encouraged him to write about corporate crimes, but instead he wanted to spotlight principled business leaders.

“Young people think CEOs are judged solely on whether they meet market demand,” Nader said in an interview. “This book raises the level of expectation.”

According to him, the CEOs he profiled meet five criteria.

They targeted the workers. “Herb Kelleher, the former CEO of Southwest Airlines, always referred to employees as ‘my people’ and even prioritized them over consumers, but the result was warmth and a culture of ‘yes’ among the workforce that consumers could really feel.”

They expressed their opinions in public. “CEOs often sound like they’re speaking from a script and have marbles in their mouths. But those in the book did not hesitate to express their views. Roddick from Body Shop was dying in the beauty industry.”

They admitted their mistakes. “They did that to speed up the correction process. Once they said they were wrong, they were able to solve the problems more quickly.”

They weren’t overly secretive. “They all shared their so-called trade secrets and ways of doing business. They rebelled against the trade secret syndrome that can often mask misconduct.”

They showed restraint. “Everyone paid attention to profits and knew that without them they could not be brave or take risks. But they didn’t put profit above all else and didn’t overpay themselves.”

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