Stanford GSB Dean Abruptly Resigns

Stanford Graduate School of Business dean Garth Saloner

Little more than a year into his second term as dean of the Stanford Graduate School of Business, Dean Garth Saloner today (Sept. 14) announced that he would step down from his position at the end of the 2015-2016 academic year.

In an email to faculty, staff and students, Saloner said he made the decision as a result of a lawsuit brought against him and the school by a former faculty member who alleges that he was unfairly dismissed from his job as well as a divorce case in which the dean has become a central character.

“I am writing to let you know that I have decided that it is in the best interests of Stanford and the GSB, two institutions that I love, that I step down from the position of dean at the end of this 2015-16 academic year,” wrote Saloner. “I have informed the President and the Provost of my decision to return to the faculty and want to share it with all of you now, at the outset of the academic year, so that we have time to plan for a smooth transition.”

‘INCREASING CONCERNED THAT THE ONGOING LITIGATION WILL DISTRACT ALL OF YOU’

“As many of you know, the university and I have been vigorously defending a baseless and protracted lawsuit related to a contentious divorce between a current and former member of our faculty. I have become increasingly concerned that the ongoing litigation and growing media interest will distract all of you from the important work that you are doing and unfairly impact this stellar school’s deserved reputation.”

He was referring to a wrongful termination suit filed by a fired B-school professor who is in the process of getting divorced from another B-school professor, Jim Phills, with whom Saloner has been having an affair.

In addition, what the lawsuit has revealed is that beneath the gilded image of America’s top-ranked business school lies a troubled culture, accusations of discrimination against women and older employees, and a staff revolt over Saloner’s “increasingly brazen” behavior – all happening as the university has turned a blind eye, court records and police investigations reveal. (To read a letter from current and former GSB staff calling for Saloner’s ouster last year, click here.)

AT ISSUE: AN AFFAIR WITH A GSB FACULTY MEMBER WHO IS MARRIED TO ANOTHER ANOTHER GSB PROFESSOR

The professor with whom Saloner embarked on an affair, Deborah Gruenfeld, is a board member of LeanIn.org, the group started by Facebook COO Sheryl Sandberg to support the advancement of women. In an email exchange revealed in the lawsuit, Saloner advises the professor not to approach her divorce “too much” as a woman. The professor’s husband, also a professor at the B-school when the affair began, has been fired and now teaches full-time at Apple University, the tech giant’s internal training facility.

Poets&Quants had asked Saloner for an interview about the charges on Wednesday of last week and followed up with a detailed list of questions to the university about the case on Thursday, Sept. 10. Saloner apparently made his decision to resign after declining a request for an interview and viewing the questions related to allegations in the lawsuit brought by Phills. The article, which has been in preparation for weeks, is here.

“It has been my privilege to serve as your dean for these past six years during which we have accomplished a great deal together,” wrote Saloner. “I thank you for your support, commitment, and dedication and I will do everything I can over the next year to leave this great school in as excellent shape as it is now.”

UNIVERSITY SAYS SCHOOL HAS RAISED MORE THAN $500 MILLION IN PRIVATE SUPPORT UNDER SALONER

Saloner joined the Stanford faculty in 1990 and became dean on Sept. 1 of 2009, succeeding Robert Joss, who had stepped down after ten years. An economist from South Africa, he had been director of the Center for Entrepreneurial Studies at Stanford and was selected as dean after leading a review of the MBA curriculum.

“It is with great regret that I accept Garth’s resignation, which I know was a difficult decision,” said Stanford President John L. Hennessy in a statement. “It has been a very successful tenure. Under his leadership, the business school has been a leader in transforming management education to address the world’s economic challenges. He has expanded its international impact and he implemented an academic vision to train insightful, principled leaders who can drive global change. We are grateful to Garth for his service and his many contributions as dean, and look forward to his continued contributions to teaching and research at the GSB for many years to come.”

The university noted that under Saloner women will comprise a record 42% of the new MBA class entering this fall. Women also make up 54% of the new faculty members hired in the past two years. Four of the five GSB volunteer boards are led by women and 30% or more of their members are women, according to a university statement.

Saloner is generally liked by most faculty who have seen their ranks increase by 17% since 2009 to 124 tenure-line faculty members. Lecturers and other teaching staff have almost doubled to 90 under Saloner.