Harvard ouster is a win for activists, not activism

Here today, gone tomorrow. Bill Ackman went for the jugular at Harvard University. A crusade against the school’s President Claudine Gay ended this week with her resigning from her role. At first glance it looks like Ackman, founder of investment firm Pershing Square, has plied his corporate activist trade in a new field with marked success. But those who target institutions like Harvard could find themselves on shaky ground.

Gay isn’t the first individual Ackman has attacked personally. He has gone after the heads of retailer JCPenney and supplement maker Herbalife, among others. But one way the Harvard campaign differed from corporate cage-rattling is that activists irked with company chieftains tend to aim their brickbats at the system – represented by the board of directors – rather than the person nominally at the top. Just this week three different groups of investors took on entertainment giant Walt Disney. All of them have gripes about the company; all of them are trying to work with the board.

There’s good reason for this. Institutions are more than the individual that runs them, and altering an organization wholesale requires more than just a change of leader. Placing a few moles on the inside gives an activist intel on a broader range of issues and, importantly, space to be thoughtful. If anything, Ackman has softened his approach in recent years.

Boards at universities are different from those of listed companies, of course – and have different triggers and pressure points. Directors at such institutions, which are generally non-profit organizations, typically work pro bono. Instead of cash they get prestige. That could make insiders more resistant to change, and harder to dislodge than their corporate counterparts.

Still, Gay’s ouster underlines how university governance could change more broadly. In response to the recent backlash on college campuses, law professor Steven Davidoff Solomon laid out a blueprint, including the suggestion that university boards not be self-selecting. Instead, he argues for a process in which all stakeholders have a say in choosing representation.

Ackman’s victory really just shows that persistence and a platform – in his case his social media presence on X, formerly Twitter – can enact change. There’s no guarantee that the next powerful person who targets Harvard or its fellow institutions will share Ackman’s agenda. Companies involve a much more orderly and multilateral process. Their investors, and activists, should be glad of it.