Wall St. Bosses Clash Over When Universities Should ‘Take a Stance’

A debate over how universities should address the Israel-Hamas war has compounded one of the most emotionally charged board fights in years.

It involves two of the most prominent modern figures in finance: Marc Rowan, the chief executive of Apollo and chair of the board of advisers at the University of Pennsylvania’s Wharton School, and Scott Bok, the chief executive of Greenhill and chair of Penn’s trustees.

After Hamas’s terrorist attack last Saturday, Rowan called for Bok and Penn’s president, Elizabeth Magill, to resign. Rowan denounced, among other things, the school’s decision to allow on campus, two weeks earlier, a Palestinian literature festival that he said had hosted speakers who presented antisemitic ideas. He believes the school, his alma mater, has an inconsistent approach to the values of free speech.

“Words of hate and violence must be met with clear, reasoned condemnation, rooted in morality from those in positions of authority,” Rowan wrote in an opinion piece submitted to, but not published by, Penn’s student newspaper this week.

“The academic, moral and objective truth of our elite institution was traded for a poorly organized pursuit of social justice and politically correct speech.”

Rowan told CNBC the day after his opinion piece became public that the school had asked three trustees to step down for “publicly disagreeing” with university leaders. He said he had been subtly encouraged to do the same.

Bok has said the school did not seek to force anyone to resign. It did, however, suggest that two trustees “consider voluntarily resigning” after they pursued the “extraordinarily unusual” step of soliciting support for public opposition of a decision made by leadership with “appropriate consultation,” he said. Bok and Rowan did not comment further.

The fight is the latest chapter in a continuing disagreement over what some on Wall Street say is an overly “woke” culture on college campuses that protects some groups but not others.

Alumni on Wall Street have accused Penn of protecting dangerous ideas. The literature festival sparked a letter signed by thousands of alumni, including Jeff Blau, the chief executive of the real estate firm Related, and Jay Clayton, a former chair of the Securities and Exchange Commission, who asked for the school to “display the same forcefulness here as the University of Pennsylvania would in response to any event seeped in anti-Black racism, anti-Asian hate or anti-L.G.B.T.Q.+ bias.”

The school said at the time that it condemned antisemitism and “fiercely supports” the exchange of free ideas.

Donors are piling pressure on Bok. Rowan called for donors to send just $1 to Penn until Bok and Magill resigned. As emails, texts and chat messages have flown across Wall Street, donors have called for other means of financial pressure.

“Change your wills!!!!! Today!!!!” wrote Sharyn Frankel, a well-known nonprofit executive, in an email chain Friday that included Vornado’s Steve Roth and the hedge fund manager Doug Kass.

One financier told DealBook that he would not use Bok’s firm, Greenhill, for advisory work until Bok changed his approach. Greenhill, a publicly traded company, announced a $550 million sale to the larger Japanese bank Mizuho Group in May.

Penn was already facing pushback from donors on some of its policies. In April, Ross Stevens, the chief executive of Stone Ridge Asset Management, announced a $100 million gift to the University Chicago that he had decided not to give to Wharton because of concerns about the increasing adaptation of E.S.G. — which stands for environmental, social and governance priorities — into even Wharton’s most quantitative courses, a person familiar with the decision-making process told DealBook.

Some universities avoid taking political positions. The University of Chicago, for example, has long abided by the principles laid out by one of its professors in the 1960s, which state that taking such positions can complicate the dissemination of knowledge. But many schools have departed from this idea. And once a school takes a position on one issue, it sets a precedent about taking a position on others, said Edward Rock, a professor of law at New York University who specializes in corporate governance.

It is now very difficult for Penn to say, “‘Oh, we just uphold freedom of speech,’” he said. “Because they’ve already compromised that position.”

Rowan and Bok’s public tiff may not be the last board battle involving wider public debates. “Like any board, school trustees have the duty of overseeing the long-term health and viability of institutions,” said Charles Elson, founding director of the John Weinberg Center for Corporate Governance at the University of Delaware. As schools increasingly wade into matters of public discourse, that includes their stance on those issues, Elson added.

“If universities have put themselves into the political sphere the way they have, then that’s part of the oversight,” he said. — Lauren Hirsch

IN CASE YOU MISSED IT

Microsoft’s $69 billion deal for Activision Blizzard closes. Britain’s competition regulator approved the tech giant’s acquisition of the publisher of video games such as Call of Duty after months of scrutiny by U.S. and European regulators. The victory for Microsoft is expected to embolden other deal makers after efforts by authorities, including Lina Khan’s Federal Trade Commission, to rewrite the conventional rules on antitrust policy.

The Republican Party chaos leaves the House leaderless. Representative Jim Jordan of Ohio was selected to be the party’s candidate to be speaker, but G.O.P. lawmakers postponed a vote of the full House to elect him after a number of them refused to back him.Party infighting has paralyzed the House since Republicans ousted Representative Kevin McCarthy of California as speaker just over a week ago.

The government’s star witness testifies at Sam Bankman-Fried’s fraud trial. Caroline Ellison, a former executive at FTX who ran Alameda Research, a trading firm affiliated with the cryptocurrency exchange, testified that Bankman-Fried had been behind the misuse of billions of dollars in customer money. Bankman-Fried has pleaded not guilty.

Taylor Swift’s “Eras Tour” movie opens at 13 theaters. The premiere of the film of the singer’s record-breaking concert tour was held in Los Angeles, where Swift greeted fans at all 13 of the packed theaters. The movie, which Swift made and distributed directly to AMC theaters, was screened one day earlier than intended because of huge fan demand.

Israeli start-ups volunteer their tech

Israel has long been known as “Start-Up Nation,” with innovations like USB drives, firewalls and real-time navigation apps coming out of the country of nine million. The tech industry makes up about 20 percent of its economy, and many companies are working with thinned ranks as employees are called up for military reserve duty. But they are also devoting time and resources to help those in need after the Hamas terrorist attacks.

“There is a joke right now that Israel is currently the biggest hackathon in the world,” said Uri Eliabayev, founder of Machine and Deep Learning Israel, a 35,000-member artificial intelligence community.

Normally, Eliabayev consults with companies. But since last weekend, he has also been connecting volunteers and organizations in search of expertise to work on emergency projects, apart from his day job. DealBook’s Ephrat Livni spoke with entrepreneurs in Israel about three of those projects.

• Missing persons: Yuval Keshtcher, the founder and chief executive of UX Writing Hub, a tech education platform, woke up early after Hamas’s strike to sirens and the news that about 150 Israelis had been kidnapped and that hundreds had been killed. He sprang into action with a fellow entrepreneur, Stav Charkham, and built a website to serve as a searchable central repository for information about individuals who were missing. “I decided by 10 a.m. to quickly build a database because I noticed there was a lot of chaos,” Keshtcher said. “By evening it was a big database.” Now there is also an app, and developers are using the data to build other emergency applications.

• Misinformation: Amid the flood of news about the conflict, a wave of doctored images, text and footage is circulating online. Regulators in Europe sent inquiries to X, Meta and TikTok demanding to know their plans to address the misinformation, and on Friday the New York attorney general sent a similar inquiry. Eliabayev said one of the primary tasks that the A.I. community in Israel had focused on was reducing deepfakes and misinformation about the war online, working on tools to more efficiently scrape the web and uncover false claims.

• Testimonies: Some businesses are offering up commercial applications for use in the war effort, in addition to building new tools. The Tel Aviv-based AI21, which develops natural language process systems, created a website, remember710.com, to upload and translate evidence of wartime atrocities into English, exporting text and images in a “story” format. Yoav Shoham, a co-founder and co-chief executive of AI21, is hosting a family that fled the terror in southern Israel, and he heard some of those accounts firsthand, calling them “gut-wrenching and bloodcurdling.” He was intent on creating a record of the tragedy.

Thanks for reading! We’ll see you on Monday.

We’d like your feedback. Please email thoughts and suggestions to [email protected].