The MIT Corporation, explained
Understanding the Corporation’s membership and function
Any visitor who enters the MIT Corporation website is met with a relatively simplistic layout: a description of the organization superimposed upon a photo of Lobby 7. Similar to the understated nature of the site, many students have little knowledge of the influence the Corporation has over the functionings of MIT.
As former Chairman of the MIT Corporation Dana Mead stated, the Corporation “has a single mission — to support the President, faculty, and staff in their work to assure MIT’s continued excellence in research and education.”
Membership of the Corporation
The MIT Corporation has been a vital component to the administration of MIT since the establishment of the institution in 1861. The Corporation is comprised of 78 members: 45 term members (elected every five years), 25 life members (serve until 75 years), and eight ex officio members. All members serve without compensation and are oftentimes notable figures in science, engineering, industry, education, and public service.
Many of the elected board members are well-known business executives, such as Roger Altman, the founder and senior chairman of investment banking advisory firm Evercore, Ash Carter, the 25th United States Secretary of Defense, and David Koch, well-known American businessman and philanthropist.
Nominations may be proposed to the Corporation’s Membership Committee by members of the board, the alumni association, and by other notable figures in the areas of academia, government, and business. New members are then elected by the Corporation every spring.
Most recently, 10 new members were elected onto the Corporation in June 2018. They included Carter and Kiran Mazumdar-Shaw, chairperson and managing director of Biocon Limited, India’s largest pharmaceutical company. Students of the most recent graduating class may also nominate their peers to ensure that “at all times there are five recent graduates serving as members of the MIT Corporation,” stated Chairman Robert Millard, in an interview with The Tech.
Millard stated that one of the many considerations for nomination was “some understanding of finance and business because at some level [MIT] is a business.” Corporation Treasurer Israel Ruiz also noted in an email to The Tech that the Corporation’s members are among “the Institute’s most generous donors, and their philanthropy often supports campus activities and initiatives that enhance student education and student life.”
However, Millard clarified,“You cannot buy your way in[to MIT]. Money doesn’t influence anything around [MIT].” According to Millard, board members are not informed of the monetary contributions of their colleagues. He also pointed to how admissions are need and donation blind and there have been instances where “[MIT] has turned down the children of major donors, which could cost us hundreds of millions of dollars.”
Furthermore, Millard claimed it is unfeasible for donations to be used for personal financial gain, as MIT will not decide to complete a project from a single donation; projects “cost [MIT] way more than the earned research dollars and donations.”
Ruiz further emphasized the significance of establishing a boundary between the professional and personal lives of the Corporation members. He stated in an email, “The role of the MIT Corporation is to provide oversight and stewardship with respect to the activities of MIT. That is its sole charge…[Individual’s] role in connection with the MIT Corporation is solely related to advancing the well-being of MIT, and the structure and operation of the Corporation and its committees make it inconceivable for any one member to be able to steer MIT in any sort of direction that may advance a personal financial interest.”
However, some have still questioned the Corporation’s independence from its members. One such member is David Koch, who provided a $100 million grant for the Koch Institute for Integrative Cancer Research facility, which replaced the MIT Center for Cancer Research.
Recently, David and his brother Charles have been accused of leveraging their financial influence in George Mason University to hire and fire professors, spurring the creation of the activist group UnKoch My Campus.
But contrary to the tumultuous relationship the notorious pair has had with other university campuses, Millard states that he has “seen only that they are beautiful donors...They have never influenced faculty...They have never made an issue.”
Responsibilities and Function of the Corporation
The Corporation is responsible for approving budgets, new degree programs and courses, and providing strategic guidance on MIT operations.
Its 78 members, including another 29 life members emeriti — members who are able to attend meetings but hold no voting rights — meet four times a year during which the individual committees report on their progress for the last months, the current financial status is presented, and new degree programs may be approved.
The Corporation is divided into Committees; each member is required to serve on two committees. Four standing committees bear the majority of the work: Executive, Membership, Risk and Audit, and Development. Millard stressed, “The committees are here for advising, not doing,” and, “Nothing that the Corporation does involves day to day running of MIT.”
The Executive Committee is responsible for “general administration and superintendence of all matters relating to the Corporation.” These matters include approving the Institute’s annual budget, approving construction or renovation projects, such as the recently opened MIT.nano building, and allocating funds for students.
The Executive Committee also appoints members to the MIT Investment Management Corporation, (MITIMco), which manages MIT’s financial assets. Millard explained that “the Executive Committee takes responsibility for a lot of the more mundane, more frequent, more in-depth decisions that the administration needs approval and consent for.”
The members of this committee “need some kind of body of strategic expertise. Members need to have some understanding of finance and business because, at some level, [MIT] is a business. Above all else, we need people who really connect to the academic mission of MIT,” Millard furthered.
The Risk and Audit Committee acts essentially as a regulatory body in the Corporation, looking ahead to ensure proper and legal management of funds and that all Corporation activities adhere to the law. Specifically, Millard elaborated, “The risk and audit committee really needs to probe and make sure that MIT’s accounting is proper, its risks are reasonable, and its financial and operating health are assured.”
The Development Committee secures the financial means for the allocation of resources to initiatives approved by the Executive Committee.
MITIMco
According to the MITIMCo site, its “mission is to deliver outstanding long-term investment returns from MIT.” The investment returns are “geared toward enabling the Institute’s activities and mission, now and in the future," stated Ruiz. The funds enable MIT to invest in student academic and wellness programs and advance its education, research and innovation goals.
MITIMCo manages approximately $25.3 billion in assets and achieved returns of 13.4 percent in the fiscal year ending on June 30, 2018.
As stated prior, members of the Company are appointed by the members of the Executive Committee who primarily seek individuals with a high level of experience in asset management. However, this oftentimes results in the recruitment of individuals affiliated with other financial institutions. To combat this issue, MITIMCo stated on their website that “MIT will not invest with an investment manager if a member of the MITIMCo Board works there and would benefit from fees paid to that firm.”
In addition, MIT Corporation members, Institute senior leadership, and some outside experts in investing serve on the Investment Management Company Board (“MITIMCo Board”), MITIMCo’s oversight board. Ruiz emphasized that Board members are not involved in picking funds.
The company is divided into three main teams which streamline the process of managing investments: Real Estate, Global Investment and Operations.
The Real Estate division specializes in managing the properties MIT owns and ensuring that infrastructure on campus is conducive towards “maintaining and improving the quality of the innovation environment,” as stated on the MITIMCo website.
The Global Investments team seeks to generate funds through a bottom-up approach which focuses on analyzing individual stocks and investments in order to mitigate the amount of volatility in MIT’s financial investments.
Acting as the backbone of the company, the Operations team “supports the investment process and ensures the integrity of financial reporting.” They manage internal relations and ensure data and reports are created reliably and on a timely basis.
Although the specific investments made by the company may not be disclosed, the Report of the Treasurer is released publicly every year by MIT’s Vice President for Finance which details in the 2018 report that MIT’s “investment policy is based on the primary goal of generating high real rates of return without exceptional volatility.” Consequently, MITIMCo seeks to develop a “broadly diversified” portfolio favoring more stable investments such as in real estate, private equity, and real assets to reduce volatility.
Undergraduate Involvement
There are two ways for undergraduates to get involved with the MIT Corporation: 1) through serving on the Corporation Joint Advisory Committee on Institute-Wide Affairs (CJAC) and 2) through providing feedback to Visiting Committees.
CJAC consists of six Corporation members, six faculty members, and six graduate or undergraduate students. According to the Corporation website, the committee “makes available to the Corporation information, views, and advice resulting from discussion and interaction among students, faculty, and Corporation members.”
Unlike the insular nature of many corporate boards, Visiting Committees allow the MIT Corporation to receive external feedback.
Every two years, groups of individuals selected from the Corporation, alumni, faculty, and other figures from reputable institutions or groups gather to discuss a unique aspect of MIT’s educational status covering every field of interest in the institution.
Visiting Committees offer an opportunity for junior faculty and undergraduates to influence the decisions made by the Corporation.
Millard described the careful process of choosing members on these committees: “We make a combination of alumni — often but not always from that exact department — people who’ve had experience with that department, and Corporation members. Some of them are non-graduates from MIT, so roughly one-third of the committee is from outside the university.”
Although undergraduates are not able to become members of a Visiting Committee, they are able to attend sessions where they may discuss their concerns with the committee members.
Issues concerning undergraduates are consistently brought up in Corporation meetings. Chancellor Cynthia Barnhart is a frequent presence at the meetings and brings up “different aspects of the student experience, including the undergraduate curriculum, the background and talents of each newly admitted class, and student life issues such as efforts to enhance student wellness and foster an inclusive campus culture,” stated Millard in an email.
Millard and other board members have concerns when it comes to undergraduate participation, as “the only undergraduates that show up have a point of view, which is not necessarily representative of the wider student body.”
Each committee meets once every two years. “The Dean of the committee comes in to talk without any of the department faculty there. And then they’ll open it up, and there’ll be a couple of hours of discussing what the issues are. Junior faculty can talk in confidence about the things they’re not happy with,” Millard stated. The committee then “sits down and formulates a preliminary set of conclusions. The administration and I listen to what they say. There is a report about the department to the administration, which will tell us what’s good and what’s bad.”
To ensure change is actually implemented, the next Visiting Committee meeting starts off by discussing the recommendations from the last committee meeting.
Visiting committees may also act as advisory groups to the Corporation. These include the committees specializing in Undergraduate and Graduate Education, Student Life, and the Department of Athletics, Physical Education, and Recreation.
The Koch Childcare Center is a concrete testament to the work of the Visiting Committees. According to Millard, as a result of graduate student feedback, the Biology Visiting Committee determined that the MIT graduate community was in need of more robust childcare facilities. In 2013, a 14,000 square feet childcare center located next to Simmons Hall on Vassar St. was opened in 2013; the bulk of its development was supported by a $20 million donation from David Koch.
Recently, through the platform Visiting Committees provide, students were able to present a proposal for redesigning the first-year experience. This served to propel the new initiative among the members of the Class of 2022 in which an additional three P/NR GIR classes are offered.
Ruiz stated that Visiting Committees are “among the strongest and most active at a major research university and provide valuable counsel on current activities and future directions for MIT’s academic programs and major activities of the Institute.” As such, Millard hoped that more undergraduates would become involved in Visiting Committee sessions.