November/December 2021Vol. XXXIV No. 2

Avoiding Corporate Conflict of Interest Among MIT Leadership

Robert Berwick, Jonathan A. King, Ceasar McDowell, Ruth Perry, Robert P. Redwine

After initially resisting such calls, Boston’s Dana Farber Cancer Institute recently enacted strict new rules to avoid conflicts of interest in which Board of Trustees members might profit from investments related to the hospital’s research and technology programs (Boston Globe, November 13, 2021, page 1). Boston Children’s Hospital, New York’s Memorial Sloan Kettering Cancer Center, and Cedars-Sinai Medical Center in Los Angeles are other medical institutions that are trying to limit Trustees or Board members profiting from biotech startups tied to hospital programs. Earlier Boston Globe articles (Boston Globe, October 10, 2021, page 1) describe some of the potential problems from arrangements in which there are such conflicts of interest. For example, potential conflicts of interest might include whether a Trustee’s financial interests in hospital spinoffs could influence the governance of a hospital, including its research priorities and the way it conducts clinical trials.

Though the situation is not strictly equivalent, – is it appropriate for MIT’s leaders – President, Provost, VPs, Deans – to be serving on Boards of Corporations whose business success depends on the direction of science and technology policy?

Was it appropriate for President Reif to draw substantial income (reportedly $294,192 in 2020: from his seat on the Board of Schlumberger, a global energy giant? Clearly, given the President’s influence on campus decisions – such as whether or not to divest fossil fuels from the MIT investment portfolio – there should not have been the possibility of a conflict of interest, nor the appearance of such a conflict. President Reif no longer sits on that Board, perhaps reflecting his awareness of the potential conflict.

In light of the previous controversies surrounding gifts from Jeffrey Epstein, Mohammed Bin Salman, Stephen Schwarzman and others, MIT formed two major committees, the Ad Hoc Committee to Review MIT Gift Processes, and the Ad Hoc Faculty Committee on Guidelines for Outside Engagements. Though the focus was more on gifts and grants, certainly the receipt of hundreds of thousands of dollars from sitting on a Corporate Board would fall under concerns named by these Committees. We suspect that such conflicts would raise the “yellow light” warning, for example, with respect to a number of the listed criteria: “12. Could this gift or engagement impede our ability to best serve the nation and the world?” and “13. Could this gift or engagement have the effect of committing MIT to promote a specific dogma or political agenda, in a way that is inconsistent with maintaining our academic integrity?”  We hope both Ad Hoc Committees will address the concerns raised in this editorial.