JPMorgan-Funded Ph.D. Program Troubles Some Faculty

(Corrects that JPMorgan may be offered seat on dissertation committees in second paragraph of story published Oct. 9.)

A proposed Ph.D. program in financial services analytics at the University of Delaware, funded by a $16.5 million pledge from JPMorgan Chase & Co. (JPM), has some faculty uneasy about the bank’s potential influence.

The biggest U.S. bank may be offered a seat on dissertation committees, and it would advise on faculty for the program, according to Bruce Weber, dean of the university’s Alfred Lerner College of Business & Economics.

While companies and business leaders are frequent donors to universities, at issue is whether JPMorgan would have too much say over the curriculum and research. The school is training future financial leaders and the bank would offer relevant expertise to them and a pipeline for employment, Weber said.

“I’d be worried if JPMorgan had no interest in giving us advice,” said Weber, a professor of business administration, in an interview. “In a fast-moving field, sometimes industry can run ahead of the academics and you need that reality check and need the ability to test the relevance of what we’re working on.”

JPMorgan is no stranger to the University of Delaware. It opened an innovation center in 2011 on campus where students, faculty and employees work on research projects, according to the website. The center also provides jobs for students. Weber said he approached JPMorgan, which has also worked with the business school on undergraduate courses, about taking their ties “to the next level.”

‘Too Close’

Some faculty members are concerned about a possible conflict of interest. While hiring graduates would be a good thing, how much sway will the company have over the university, asked Sheldon Pollack, a professor of law and political science and the past president of the faculty senate.

“Are we becoming the JPMorgan business school?” Pollack said in an interview. “The relationship might be a little bit too close. I understand deans need money.”

Lisa Bennett, a spokeswoman for JPMorgan, declined to comment.

The donation covers about half of the cost of the doctorate program over 10 years: $14 million would go toward scholarships and faculty salaries and $2.5 million to expand the building that would house the program, said Andrea Boyle, a university spokeswoman.

“People have to be very careful to take the money and make sure there’s no strings attached,” Pollack said.

The school requires one seat on dissertation committees be taken by someone outside the university, though JPMorgan isn’t entitled to have that seat, Weber said. It’s an option.

‘Ultimate’ Authority

While the bank would have a right to consult about faculty positions for the program, the university retains ultimate hiring authority, according to the draft agreement, part of which was provided by the school. Teachers would come from the existing faculty. JPMorgan also wouldn’t have veto power over dissertation topics, areas of study or hires, Weber said.

The doctorate program isn’t a done deal and needs approval from the University Senate. The curriculum would be designed by faculty members in the colleges of engineering and business.

“We have clear policies and guidelines for academic freedom,” Weber said. “We have an obligation to make sure that content is relevant and valuable to the industry.”

As long as conflict lines are policed, the relationship should be fine, said Harvey Dale, professor of Philanthropy and the Law at New York University.

“If they are properly managed and addressed, then it becomes perfectly normal,” Dale said in an interview. “That doesn’t mean that all members of the faculty will agree.”

The school is named for Lerner, the late MBNA Corp. chairman and chief executive officer, after the company donated $20 million in his memory following Lerner’s death in 2002.

The story was first reported by Inside Higher Ed.

To contact the reporter on this story: Janet Lorin in New York jlorin@bloomberg.net

To contact the editor responsible for this story: Lisa Wolfson at lwolfson@bloomberg.net

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