Wise expects to stay on Nike board

Wise expects to stay on Nike board

Later this week in Beaverton, Ore., University of Illinois Chancellor Phyllis Wise is expected to be elected to another year on the board of directors of a multibillion-dollar international company.

As a director on Nike's board, Wise says she is able to bring a perspective from higher education to the company that can count among its many customers colleges and universities, including the UI.

In return for serving on Nike's board last year, Wise received $83,005 in fees, $139,560 in option awards and $15,324 in other awards for a total of $237,889, according to Nike's proxy statement.

As some in the academy raise questions about a growing coziness between higher education and corporate America, especially when some of its leaders serve on their boards, Wise said she believes industry "can help us and we can help them."

"The more we understand the corporate world and how they make their decisions, the better off we are. The better off they know about the academy, the better off we are," she said.

Wise plans to continue to serve on the board, she said, as long as she is elected.

As states trim higher education budgets around the country, academics have felt a growing, "intense pressure" to strengthen ties between universities and corporations, said Cary Nelson, a UI emeritus professor and previous president of the American Association of University Professors. Earlier this summer, the association published an extensive draft report on academy-industry relations. The report deals in part with the subject of university administrators serving on boards.

"Sometimes a corporation's values and needs and priorities are not the same as the university's," Nelson said. "If (a university leader) serves on the board, they have implicitly a commitment to facilitate the profits of the company. They have a fiduciary responsibility as being on the board," he said.

That's not always in harmony with the commitments of a leader of an academic community, he said.

When a university leader accepts a position on an industry board, "there are potential conflicts of interest, there are regularly the appearance of conflicts," Nelson said.

Some university presidents decline to serve on boards in order to avoid those conflicts or appearances of conflicts, Nelson said. And some will serve but without being compensated. That's what his group recommends.

While at the University of Washington, where Wise was interim president before joining the UI, she told faculty she planned to donate the compensation she received from Nike to scholarships; however she declined to discuss the topic now, saying "philanthropy is a private business."

"I give to the university. I give my time and money, and I would like to keep that private," she said last week.

As vice president and chancellor of Urbana, Wise earns a salary of $500,000 per year, plus $100,000 for each year if she stays for five years.

Wise is one of more than a handful of university leaders around the country who have joined corporate boards. Several other prominent leaders hold similar positions, according to data published earlier this fall in the Chronicle of Higher Education.

The Ohio State University's president, E. Gordon Gee, serves on the board of Bob Evans Farms and received $200,132, and he was on the board of Hasbro, earning $39,644 from that position last year.

Mary Sue Coleman, president of the University of Michigan, serves on the board of Johnson & Johnson (and received $229,000 last year) as well as the board of Meredith Corp. (and received $195,000 last year), according to the Chronicle's data.

David Chicoine, the former vice president of technology and economic development at the UI who left at the end of 2006 to become president of South Dakota State University, drew some criticism when he accepted a seat on Monsanto's board of directors in 2009. In 2011, Monsanto paid South Dakota State hundreds of thousands of dollars for research and other services, donated about $200,000 for a graduate fellowship in 2011 and received $109,000 for royalties and seed services, according to the company's filings with the Securities and Exchange Commission. Chicoine received a total of $200,006 from Monsanto in fiscal year 2011, including fees, stock awards and other compensation, according to company filings.

Among the ranks of university leaders who do not serve on corporate boards: Rodney Erickson, president of Penn State; Eric Kaler, president of the University of Minnesota; and David Ward, interim chancellor of the University of Wisconsin-Madison, according to the Chronicle's study.

Wise joined the Nike board in 2009 when she was at the University of Washington. When she was approached about the position by a search firm, Wise said, she was surprised. She had served on nonprofit boards and government advisory committees, but never on a corporate board. She researched the company and discussed the matter with members of the university's board of regents and said yes.

"My belief was Nike was and still is a corporation that is respected in its field and made major strides in terms of its corporate responsibility," Wise said.

Her decision to be on the board rankled some faculty there, though, especially when they questioned Nike's labor practices in places such as Honduras.

She said the company took criticism seriously and its officials redoubled their efforts checking on factories with which they contract.

"The standards they hold are very high," she said.

As to those in academia who raise concerns about university leaders joining corporate boards, Wise said, "I very respectfully disagree."

"I think we are developing more and more corporate relations here at the university where we can help them and they can help us in their research, their development of next generation of whatever. There are so many wonderful companies in the research park. They want access to our students, they love working with them and also want to partner with our faculty."

The UI, like many other colleges and universities, has a multiyear contract with Nike to provide apparel and shoes to its athletes.

The UI is in its second 10-year licensing agreement with Nike. Valued at around $1.5 million annually, the contract calls for Nike supplying all 19 varsity sports teams with uniforms and practice gear, according to Marty Kaufmann, assistant athletic director with the UI's Division of Intercollegiate Athletics.

The company receives advertising, such as signs in the stadium, tickets and other perks.

The current agreement will expire in June 2016. Historically, agreements are negotiated a year or two before they end, according to Kaufmann. And Wise won't play a part in any possible negotiation for a new one.

When she became vice president and chancellor of the Urbana campus, Wise said, she wrote and filed a letter saying that any business decisions between Nike and the university would not involve her.

"I just want there never to be a conflict of interest here," she said.

The UI's conflict of interest and commitment policy allows for employees to be involved — and compensated — for external activities.

According to Nike's proxy statement, Wise was chosen as a board member for "her extensive experience in medical science, health, higher education and societal issues."

As a Nike board member, Wise attends five meetings a year, with each one taking up about two days of time including travel. She does some preparation for those meetings as well.

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vcponsardin wrote on September 17, 2012 at 4:09 pm

Curious that this story appears on the very same day that the university's Vice Chancellor for Research is requesting that all faculty fill out their annual Report of Non-University Activities statement, in which most of us must reveal that we make far less from our occasional outside work than the $230,000 that Wise makes from Nike, but for which we get far more grief from unit heads for doing nonetheless.

Bulldogmojo wrote on September 17, 2012 at 4:09 pm

Wise says "I just want there never to be a conflict of interest here,"

Like I've mentioned here before. Wise was chosen with the same questionable vetting processes that have delivered corrupt administrators from the not so distant past.

The appearance of impropriety is impropriety and now the facade begins to crack... 

Lostinspace wrote on September 17, 2012 at 5:09 pm

Not sure about that, but given the stories of administrators elsewhere (Brown, for example), it's worth keeping a eye out.  I'm certain that in many case, where the member of a corporation board has a less-than-firm grasp of issues, they can, with all the good will in the world, be blind sided by revelations that make them look bad.  I wish Dr. Wise well and hope she is not caught in such a bind.

Sid Saltfork wrote on September 17, 2012 at 6:09 pm

Is it any worse for her to sit on a corporate board than Chirs Kennedy sitting on corporate boards?  In regards to the philantrophy, and scholarship donations; don't talk about it, just do it.