Riding the investment wave of the late 1980s, the two Business School alumni compiled an extremely high return on investment and were the highest paid Harvard employees, according to a 1989 tax return. Their compensation of over $1 million annually was six times what Bok makes.

But questions of ethical oversight have arisen from the HMC expansion into the higher risk areas, known as private placement investments.

Unlike larger public stocks, investments like venture capital and LBOs do not involve direct common share voting--whichenables the University to voice its thoughts onissues of social responsibility.

When Harvard created the Advisory Committee onShareholder Responsibility (ACSR) in 1972, theUniversity became a leader in the area of socialresponsibility among large investmentinstitutions.

But the HMC entry into private placementinvestments has left the ACSR deprived of a formalvoice on the ethical issues concerning more than a$1 billion chunk of the endowment.

The realization of their limited jurisdictionleft many ACSR members shocked, although no formalchanges have yet been proposed to give the body astronger voice.

As Meyer prepares to leave his post as atreasurer with the Rockefeller Foundation and headnorth, he says that his priority will be to ensurethat the endowment is properly distributed amongthe various investment types.

Endowment's Weakness

"If the endowment has one weakness, it iscontext," Meyer says. "The way pieces fit togetherhas to be worked on. We have to make sure that ourpolicy is suited to Harvard's spendingrequirements and risk requirements."

But Meyer says that this is the only area wherehe could find fault in the current workings of theHMC that Cabot has managed for over 15 years.

Harvard Management is not broken," Meyer says,defending Cabot from recent press criticisms."It's not my responsibility to fix it.