A Scandal at Stanford University
Stanford University has long been a bedrock part of Silicon Valley, feeding talent and ideas to the tech industry. But its business school has recently been engulfed in a well-chronicled scandal that led to the resignation of the school’s dean last month, and now David Streitfeld finds that the hubbub has revealed issues at another part of Stanford, the Hoover Institution.
The business school and Hoover incidents both involve management issues with women. They come against a backdrop where Silicon Valley has been debating — and flagellating itself — for the lack of gender diversity in tech.
Over the past few years, Silicon Valley technology companies have reported data on the diversity of their workforce. The numbers have shown the lack of women in technology roles and little progress has been achieved in closing the gap.
Add to that a number of other episodes at Silicon Valley firms where the role of women has been spotlighted, including Ellen Pao’s high-profile suit for gender discrimination against her former employer, venture capital firm Kleiner Perkins Caufield & Byers. While Ms. Pao’s claims were rejected by a jury, the trial over the suit gave a peek into the old boys’ behavior that can permeate Silicon Valley.
The issues at Hoover and Stanford’s business school may now play into the same debate.
At Stanford, Relationship Reveals Accusations of Discrimination
PALO ALTO, Calif. — He was the recently widowed dean of the nation’s top business school. She was a star professor who was estranged from her husband. They went for a walk. She invited him to a yoga class. A middle-age romance bloomed.
The relationship prompted a lawsuit from the estranged husband, also a professor at the school. The dean, he charged, had punished the husband to benefit his new girlfriend. The man at the center of this drama, Garth Saloner, called the case “baseless,” but resigned last month as dean of the Stanford Graduate School of Business because, he said, he did not want the litigation to dim the school’s stellar reputation.
The suit is doing more than prompting questions about Mr. Saloner’s wisdom in dating a woman whose husband he oversaw, at least nominally. It has brought to light other management issues, including some involving women at the business school and at another prominent part of Stanford, the Hoover Institution.
At the business school, the unhappy husband’s lawsuit revealed the existence of a 2014 petition signed by 46 current and former employees — about 10 percent of the staff members — who claimed there was “a hostile work environment” that differentiated “on the basis of gender and age.”
Credit: Tony Avelar/Bloomberg
The uproar over the business school’s situation, in turn, led several sources, including a research fellow at Hoover, to approach The New York Times about complaints at the Hoover Institution. In early 2013, some women at Hoover, a conservative-leaning policy center, began to express dissatisfaction more widely about the work environment, saying it was a place where men hired their male friends and women were marginalized.
The university began an investigation that took several months. Women in one department at Hoover “felt the work environment has been threatening at times,” while the majority of female interviewees said it was “not always a ‘respectful’ workplace,” according to Stanford’s “summary of findings” of the investigation, copies of which were reviewed by The New York Times.
John Etchemendy, Stanford’s provost, would not discuss the claims about the business school and Hoover in detail. He said that Stanford had hired separate outside investigators and that neither had found systemic discrimination. But he acknowledged “weaknesses in management” and said they were being addressed.
“We have very high standards of behavior and for the most part achieve them better than any other institution I know,” Mr. Etchemendy said in an interview. “But we sometimes fall short.”
Lenny Mendonca, a retired senior partner at McKinsey & Company and a former vice chairman of the business school’s advisory council, said he saw an opportunity for Stanford to address underlying gender issues.
“There is substantial unconscious bias in Silicon Valley against women,” he said. “That isn’t going to change by assuming it will get better on its own. Stanford should be leading the way here.”
The divorce case is still proceeding after nearly three years. Ms. Gruenfeld had spent $165,000 in legal fees as of May 1, while the cost of Mr. Phills’s lawyers had risen to $260,000, plus $69,000 in therapy sessions and co-parenting counseling, according to court filings.
By this point, the couple cannot even agree on when they married — he says 2000 in one set of papers, she says 1999 in another.
Credit: Nancy Rothstein
Whatever the wedding date, soon afterward they were a joint hire for the business school. Stanford was so pleased that it gave them $1 million in housing loans that offered much better terms than any bank.
The couple’s area of expertise was how organizations work. Ms. Gruenfeld, 53, focused on how power leads people to do stupid things. Mr. Phills, 55, concentrated on the ways nonprofit organizations could use leadership to improve. Her academic star shone brighter; he was not on a tenure track. In May 2012, Mr. Phills went on leave from Stanford and began teaching at Apple University, Apple’s training division.
After two children and a dozen years, the marriage disintegrated. In June 2012, Ms. Gruenfeld moved out. The next March, she was granted a domestic violence restraining order against Mr. Phills, a former star wrestler at Harvard, after she said he was “threatening, stalking and harassing” her. In court papers, Mr. Phills called the accusation “meritless.”
Enter Mr. Saloner, 60, a South Africa native enmeshed in Silicon Valley. He did pioneering early work on network effects, which let tech companies dominate their markets, and in 2001 took a two-year leave from Stanford to work with start-ups.
During Mr. Saloner’s tenure as dean, Stanford edged out Harvard and Wharton as the No. 1 business school in the closely watched U.S. News rankings. It opened a shiny new campus and started a state-of-the-art dorm. Mr. Saloner raised $500 million and, with Silicon Valley flush, more seemed on the way.
Mr. Saloner’s wife, Marlene, died in June 2012 after a long struggle with cancer. Some time after that, he began seeing Ms. Gruenfeld socially.
Mr. Phills was simultaneously negotiating his return to Stanford. But the school wanted the money for the housing loans repaid, saying that if Ms. Gruenfeld no longer lived there, Mr. Phills did not qualify by himself.
Stanford says Mr. Saloner was recused from decisions involving Mr. Phills. But the dean sent Ms. Gruenfeld electronic communications that were copied by Mr. Phills and used in his case. In one message captured by Mr. Phills, Mr. Saloner portrayed Mr. Etchemendy, the provost, as being unfazed by the recusal: “He basically ignored what I said about the two of us and, not in these words, that he trusts me to make any decisions regarding Jim.”
Mr. Etchemendy said Mr. Saloner was mischaracterizing him.
Credit: Andrew Pierce
Mr. Phills sued Stanford and Mr. Saloner in April 2014. Mr. Phills, who is black, argues he was “subjected to discriminatory actions with respect to his compensation, work assignments and benefits based on his marital status, race and gender.” He is asking for unspecified damages and legal costs.
Stanford denies the claims and sued Mr. Phills in August 2015. It alleged invasion of Mr. Saloner’s privacy and computer fraud, arguing that the messages had been obtained illegally.
Mr. Saloner, Mr. Phills and Ms. Gruenfeld declined to be interviewed. Ms. Gruenfeld and Mr. Saloner remain together. She received a $1 million advance for a book based on her course, Acting With Power. Mr. Saloner intends to remain dean until the end of the academic year. Mr. Phills remains at Apple.
There is no suggestion that the relationship of Mr. Saloner and Ms. Gruenfeld was anything but consensual. But the public exposure brought to the surface, through court documents with the suit, a petition against Mr. Saloner involving accusations of unfair treatment, especially of older and female employees. Mr. Saloner previously reorganized parts of the school and had forced out some staff members.
The petition, written in April 2014 and directed to Mr. Etchemendy, said the writers were “well aware of the necessity of moving people in and out of roles” but that did not excuse “inequitable treatment in the form of reprimands, censures, curtailing of responsibilities, demotions,” or retribution for expressing concerns. They sought to derail Mr. Saloner’s reappointment to another five-year term.
Mr. Etchemendy now says Mr. Saloner’s reorganizations “were not executed as sensitively as one might like.”
The investigation of the business school, conducted by a local law firm, noted that according to Stanford’s code of conduct, “the rules of fairness, honesty and respect for the rights of others” must govern behavior in the absence of any specific regulations.
The investigators concluded that the leaders of the business school, “including but not limited to the dean,” had not consistently behaved in accordance with this policy.
Credit: Michael Friberg for The New York Times
Debra Zumwalt, Stanford’s chief counsel, said no policies had been broken. “There are specific laws and policies that govern the conduct of the managers, which were met, so this is not one of those instances where the code of conduct specifically applies,” she said.
With Mr. Saloner’s downfall, the petitioners feel vindicated.
“Al Capone eventually got nailed on tax evasion,” said Sharon Hoffman, who said Mr. Saloner had pushed her out as head of the business school’s M.B.A. program. “You take what you can get.”
At t he Hoover Institution, which has been a haven for former Reagan and Bush administration figures including George P. Shultz and Condoleezza Rice, a departing employee wrote a seven-page letter to Mr. Etchemendy detailing a “dysfunctional” atmosphere of “cronyism” in early 2013. That spurred Stanford to begin an investigation.
Hoover has 181 full-time employees, more than half of them women, but the research and senior fellows are overwhelmingly men. A new director at Hoover started last month.
The investigation faulted Hoover’s leadership for not casting a net wide enough to bring in new faces. One cultural problem, it said, was membership by Hoover’s leaders in the Bohemian Club, an all-male private club in San Francisco that dates to 1872.
Ms. Zumwalt cautioned against reading too much into the Hoover report’s conclusions.
Just because the majority of women interviewed felt that it was not always a respectful workplace, she said, “that does not mean that it was not a respectful workplace.”
One person interviewed was Tammy Frisby, a research fellow in charge of data analysis and survey design for the Hoover Institution Golden State Poll. She became one of Hoover’s leading critics. Her motivations included personal concerns, such as her contract length, compensation and advancement opportunities, she said.
Ms. Frisby, who taught political science for nine years to Stanford undergraduates, also had broader concerns in mind.
“If I don’t speak out about this, what am I really teaching them?” she said. “How will things get better for the 20-year-old woman in my classroom?”
A version of this article appears in print on October 21, 2015, on page B1 of the New York edition with the headline: A Scandal in Academia.