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In late July, Dr. Elizabeth Nabel, president of Harvard-affiliated Brigham and Women’s Hospital, came under intense scrutiny for activities she undertook outside her role at the hospital. The focus was on her sitting on the boards of directors of two publicly traded companies: Medtronic, a medical device company, and Moderna, a Boston-based biotech whose Covid-19 vaccine is now in clinical trials — and the Brigham is one of the testing sites for it.

As the Boston Globe was preparing to publish its first story on this conflict of interest, Nabel resigned from Moderna’s board and reportedly sold Moderna stock worth more than $6 million.

The immediate controversy focused on the appropriateness of the head of a large, nationally known hospital serving on Moderna’s board, a role for which she received substantial cash compensation and substantial company stock. That this became known during the Covid-19 pandemic, when her hospital’s patients — and many of its employees — were suffering financially, medically, and psychologically, created especially bad optics.


But even in “normal” times, the case raises general issues about the propriety of health care and medical school leaders serving on fiduciary boards of for-profit companies.

I write as a former dean of Harvard Medical School who oversaw two revisions of the school’s rigorous policy on faculty conflicts of interest and commitment. As dean, I vigorously supported the value of robust interactions between faculty and industry to advance innovation and human health, and still do. In my current status as a professor of medicine at Harvard, I serve on several for-profit and not-for-profit boards. I learn from this work and I believe I am making useful contributions as a board member.


But I also believe that the considerations governing such relationships should be judged differently for institutional leaders.

Many health-related companies, including large publicly traded for-profit companies, place professors and academic leaders — including health system CEOs and university presidents, provosts, and deans — on their governing boards of directors. In a 2013 study of 446 eligible health care companies, of 3,434 board members, 279 were affiliated with academic institutions, including 52 academic leaders: 17 CEOs; 11 vice presidents; 16 university presidents, provosts, or chancellors; and eight medical school deans. In a recent survey, major board seats were held by the dean of the University of Michigan Medical School (Eli Lilly), the chancellor of Duke University Health System (Johnson & Johnson), and the CEO of the Dana Farber Cancer Institute (GSK), among many others.

Companies want academic leaders on their boards for several reasons. These include reputational benefits accorded the company through associations with well-known leaders; the specific expertise they possess, which is considered valuable to the company; an expectation of acquiring valuable insights about the organizations the board members lead, or similar organizations; their ability to facilitate networking with others useful to the company; and their ability to fulfill increasingly important requirements for diversity of boards. These are all understandable goals, and none is necessarily objectionable.

As the dean of Harvard Medical School, I was often asked to join boards, usually via search firms specializing in board searches. I was far too busy to consider most of these, even though they offered substantial compensation and opportunities to interact with interesting people and extend my management skills. While I considered taking on such a role, university policy required express approval from Harvard’s president, who discouraged me from doing so — and I never did while dean.

Over time, I have developed a more skeptical view of academic leaders taking positions on for-profit boards. There are several reasons for this.

Running a hospital, school, or university is a full-time job and, based on my experience as dean, there are often aren’t enough hours in the day to carry out all the required tasks, even when supported, as I was, by outstanding colleagues. There is an unavoidable tension between effort expended on behalf of your primary job and any outside positions you might hold.

Compensation is another issue. In recent decades, the CEOs and presidents of nonprofit hospitals have been awarded rather extraordinary compensation packages, far in excess of compensation of faculty and staff, often multiple millions of dollars a year. It is akin to the compensation of for-profit leaders, minus the stock options. Whether or not you judge these levels of compensation excessive for leaders of nonprofit organizations, adding additional compensation from their service on for-profit boards — median level of $193,000 per year plus stock, according to the 2013 study — raises questions. If CEOs donated their additional board compensation to support worthy underfunded causes within their institutions, they might be better received by employees and the public.

What about complications arising from business intersections between the hospital or the school the board member runs and the company on whose board she or he sits? While one can imagine situations where such issues don’t arise, that isn’t the case when a hospital CEO sits on the board of a medical device or biopharmaceutical company from which the hospital makes purchases, or is a site where one of its new treatments are being tested and may potentially be prescribed to its patients.

Institutions that permit such CEO activities typically ask a subset of their own boards to monitor and assess the CEO’s activities for problematic conflicts of interest, but this approach to oversight is highly imperfect. First, the reviews and their conclusions are not available for public view, so it’s impossible to judge their adequacy. Second, board members of nonprofit organizations often develop friendships with the CEO, which is fine, but creates its own conflict of interest. As seen in a disturbing episode at Memorial Sloan Kettering Cancer Center in New York, board members of a nonprofit may themselves cross the line in conflicts of interest.

Another issue is inherent to the CEO role, a powerful position to which all other employees ultimately report. Employees, even those substantially protected by reputation and academic tenure, may be reticent to express concerns about the outside board roles of their CEO. Critical comments by Brigham and Women’s employees about the Moderna board issue have been hard to find in the public domain.

Finally, it is obvious that such arrangements can create substantial risks to an institution’s reputation for integrity, which is among its most valuable assets — difficult to build and easy to sully. Some such risks are predictable, while others arise, as in this case, when least expected and desired.

Nonprofit fiduciary boards must take seriously their role as guardians of institutional reputation. This requires carefully weighing the benefits of approving such arrangements against the often less-predictable risks of doing so.

Interactions between hospitals and academic institutions and the biopharmaceutical and medical device industries accelerate innovation, and should be celebrated as key enablers of the bioscience research and development ecosystem of which this country is justifiably proud. Yet it is essential that these relationships receive close institutional oversight to avoid negative outcomes, such as definable harms to patients or institutional values when conflicts of interest promote inappropriate behaviors or public perceptions of impropriety.

This is nowhere more critical than when institutional leaders take seats on for-profit governing boards, especially those of companies whose business interests intersect with those of the institutions they lead. These interactions, which are quite prevalent, may produce value to the involved parties with little harm. But as the Nabel episode suggests, there may be inadequate oversight from hospital or academic boards, whose primary responsibility includes deploying their collective judgment to protect the reputation of the institution they serve.

In assessing that balance, I recommend that hospital CEOs and academic leaders at the level of deans and presidents devote their full attention to their well-compensated day jobs and defer positions on the boards of for-profit companies — and the unavoidable conflicts they raise — to the post-leadership phase of their careers.

Jeffrey Flier is an endocrinologist, professor of medicine, and former dean of Harvard Medical School. He currently serves on the board of directors of two for-profit companies, Scholar Rock Corporation and Medforth Global Healthcare Education, and two nonprofits, the Institute for Protein Innovation and Heterodox Academy.

  • Medical professionals should as a matter of ethics be in- charge or board members of healthcare systems, for-profits or non-profits in any society. Hedge Fund managers with little or no medical background certainly have no place in the healthcare systems. They have commoditized the systems and main Street America are paying the hefty price; while they (hedge fund managers) are smiling to the Banks.

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