Director's Alert profiles Shapiro
Reprinted from Corporate America's
Outstanding Directors 1999, published by Director's
Back in the early 1960s, Harold Shapiro earned a PhD in
economics from Princeton University in three years. He spent
24 years as a member of the University of Michigan faculty
and was president of that institution from 1980 to 1988. He
is now president of Princeton, a post he's held since
"Harold has superb intellectual credentials. I don't know
how much more superb you can get," sums up Barbara Hackman
Franklin speaks from first-hand experience. She sits with
Shapiro on the Dow Chemical board. "Because of his
intellectually elegant background, he has an unusual
Dow Chemical chairman Frank Popoff agrees. "Toward the
end of a debate, people start looking to Harold for his
opinion," he notes.
Harold Shapiro brings his keen intelligence -- as well as
kindness -- into the boardroom. "Harold will always give you
plenty of time," says Popoff. "He's very busy, like all
directors, but he manages his time well."
His director peers single Shapiro out for the
single-minded dedication he demonstrates when he is working
on a difficult project. He brought this single-minded
dedication to bear over an extended period to the Dow board.
"Harold was really instrumental in a tough decision we
made," explains Popoff. The decision was to privatize an
East German chemical business.
In 1995, the German government agency for privatization
asked Dow to take on a chemical plant in Saxony, in the
former East Germany. The plant had been owned by I.G.
Farben, a German chemical monopoly prior to World War II,
and the precursor of Bayer, Hoechst and BASF.
"The site was covered with sins," explains Popoff. It had
been run by the Nazis in WWII, who staffed it with slave
laborers. The communists had taken over after the war, and
the plant "had every environmental problem you could think
of," reveals Popoff.
The German government knew that it had to privatize the
site or watch more jobs leave Germany. The three large
German chemical companies wanted no part of the project,
however. As a result, the plant was one of the last things
to be privatized in Germany.
Popoff notes that the work done at the site "was very
close to Dow chemistry." Dow knew it would be a
multi-billion dollar undertaking, but thought the eventual
rewards would be worth the effort. Complicating matters
further, Popoff continues, "We took some barely adequate
subsidies, so we knew it would be contentious."
Into this morass stepped Harold Shapiro. "Harold was the
independent outside director who looked at the pros and cons
of taking over the site," says Popoff. "He examined the
economic, social and political issues" surrounding the
"It was an extremely good transaction for the company,
but it had its own twists," notes Shapiro. "One cannot see
the plant without thinking of how it was staffed by slave
labor in WWII."
"Harold took the time to dig deep and look at the
issues," says Popoff. "His decision made it happen."
The job was not done once the board agreed, however.
There were multiple administrative and business issues to
decide throughout the long process of getting it rebuilt and
operational. Once again, "Harold was instrumental," adds
Today the former Farben plant "is running like a Swiss
watch," smiles Popoff. "It wouldn't have happened without
Currently, Shapiro is chairman of the compensation
committee at Dow Chemical. "Every board should have an
academic on the compensation committee," declares
Shapiro had also been a member of the Kellogg and
[Unisys] boards during his tenure at the University
of Michigan. When he became president of Princeton, he
resigned those seats. But he left a similar legacy. "Harold
played a key role in a major move the company made,"
explains William Lamothe, the former CEO of Kellogg
In 1969 a new tax law decreed that nonprofit foundations
had to reduce their holdings in public companies to no more
than a third. The W.K. Kellogg Foundation, one of the
world's largest private charities, owned more than 50
percent of Kellogg Corp.
Lamothe formed a committee of the board to negotiate a
fair price for the foundation's shares at arm's length.
Shapiro was tapped to chair the committee. "It was a complex
transaction, with many legal and public considerations,"
remembers Lamothe. "It had to withstand the light of
They finally reached an agreement "in one of the
miserable rooms at the O'Hare Airport Hilton," reports
Shapiro. "It was the largest financial transaction I ever
took part in. It amazes me that I ever thought at that age
that I had the capacity to do it."
But while Shapiro is credited with an analytical mind, he
is also noted for his thoughtfulness. Ralph Gomory
[*54], president of the Alfred P. Sloan Foundation,
reports he is a beneficiary of just this. Gomory is a former
Princeton trustee. The University gave him a medal earlier
this year, during Alumni Weekend. "You can imagine how busy
Harold was that weekend. He had to make one speech after
another," reports Gomory.
Nevertheless, on that Sunday morning, Shapiro hosted a
breakfast at his house for a small group of Gomory's friends
on the faculty and their families. "We all enjoyed it," says
Gomory, "and I was moved by his gesture."
Shapiro has a keen interest in bioethics. He chairs the
National Bioethics Advisory Commission, which focuses on the
protection of the rights of human research subjects, and the
implications of cloning.
After Dolly the sheep was cloned in February of 1997, the
Commission presented President Bill Clinton with a 100-page
report titled Cloning Human Beings--on June 9 of that same
"I have a serious neurological deficiency," Shapiro
jokes. "If someone asks me to do something, I assume I am
capable of doing it."
When asked what he likes most about being a director,
Shapiro replies, "It has given me additional insight into
the world economy that I wouldn't have come by just by