The Ford Foundation is the proverbial "fat boy in the canoe" of the philanthropic shipyard. And it seldom has encountered a liberal cause it hasn't embraced. As if that's not enough to call into question its judgment, it now has chosen to wrap its arms around one of the latest poster boys for the current era of corporate skulduggery.
Paul A. Allaire is chairman of the Ford Foundation, one of the nation's largest. He also happens to be the former chairman and chief executive officer of Xerox Corp. Last month, he agreed to pay a $1 million penalty and forfeit $7.6 million in bonus pay and stock profits to settle Security and Exchange Commission allegations that he and five other executives allowed Xerox, over four years, to overstate its profits by $1.4 billion.
Part of the SEC settlement, in which Mr. Allaire and his associates neither admitted nor denied wrongdoing, also bars Allaire from serving as a director of a public corporation for five years.
One would think that a foundation as large and as publicly interacting as Ford (though it is considered a private concern) would take great pains to distance itself from Allaire. Especially given the current climate of corporate scandal that has caused some legislators to more closely scrutinize the foundation community. Instead, Ford did exactly the opposite.
The Ford Foundation's executive committee, in consultation with 12 other board members, has decided that it's the "right" and "best" thing for the philanthropy to keep Allaire at the foundation's helm. It even called Allaire "an exemplary leader."
But what about the SEC agreement⢠"As the terms of that settlement do not relate to Mr. Allaire's service with private organizations and having considered the matter carefully, the board strongly reaffirms his role as its chairman," a Ford spokesman said.
"How can we parse this Ford statement?" asked Neal B. Freeman, chairman of the Foundation Management Institute (FMI), in a "Friends of FMI" memo Friday last. "Just as Allaire is banned by federal regulators from serving on the board of any U.S. corporation, Ford declares him to be exactly the right person to lead the most influential U.S. foundation."
It's exactly the wrong message at exactly the wrong time.
