Robert Keith Jaedicke, dean of the Stanford Graduate School of Business from 1983 until 1990, died on May 24 at the age of 91.
As the GSB’s sixth dean, the soft-spoken and mild-mannered academic often spoke of achieving “balanced excellence” between scholarly research and teaching at the school. Jaedicke was known as an excellent teacher, rated highly on the basis of student evaluations of his courses. He was best known for his ability to teach difficult subject matter in managerial accounting in a clear and understandable manner. As dean, he introduced computers into the classroom and left the school with what was then considered a hefty endowment of $53 million.
It is ironic that Jaedicke was also known for expanding the area of corporate responsibility and management ethics at Stanford GSB. That’s because it was Jaedicke’s misfortune to get caught up in the headline-making demise of Enron Corp., where he had served on the board of directors for more than 15 years. As head of the board’s Audit Committee that oversaw the company’s auditors and financial statements since Enron’s formation in 1985, Jaedicke became something of a target of investors when the company imploded. They wondered how a leading accounting expert did not detect the many problems lurking in the company’s financial statements.
‘WE HAD NO CAUSE FOR SUSPICION UNTIL IT WAS TOO LATE’
Just after the company’s bankruptcy in 2001, at the time the largest corporate bankruptcy in U.S. history, Patrick McGurn, a leading shareholder advocate and vice president of Institutional Shareholder Services, which advised big investors, said of him: ”It would be one thing if the head of the audit committee were Beverly Sills. But Jaedicke is an accounting professor.” A report by a special investigative committee of Enron’s board mainly blamed Enron’s executives for the company’s failure, but it also criticizes the board and “in particular” the audit committee, saying, “abuses could have and should have been prevented or detected at an earlier time had the board been more aggressive and vigilant.”
The board’s greatest blunder, according to the committee’s report, was suspending Enron’s conflict-of-interest policy in mid-1999, so its chief financial officer could participate in outside partnerships, then “failing to demand more information, and failing to probe and understand the information that did come to it” regarding those partnerships. Jaedicke seconded the motion suspending Enron’s ethics code. He was among six board members who resigned from Enron in February of 2002. Ultimately, 18 former directors of Enron, including Jaedicke, would pay $168 million to settle a lawsuit filed by shareholders.
In testimony before a House committee investigating the meltdown, Jaedicke, then 73 years of age, would later say that the company concealed information from the board, and many of his colleagues vouched for his integrity, guessing that he was simply too trusting. “Some now contend that we should have spent more time, and asked more questions,” he testified. “I can assure you that the controls and the transactions were given more than just a superficial review. Considering the amount and seriousness of information that was concealed from us and misrepresented to us, I am not confident as I sit here today that we would have gotten to the truth with any amount of questioning and discussion…Sadly, despite all that we tried to do, in the face of all the assurances we received, we had no cause for suspicion until it was too late.”
FIRST TAUGHT ACCOUNTING AT HARVARD BUSINESS SCHOOL
Jaedicke, who first became an assistant professor of accounting at Harvard Business School from 1958 to 1961, joined the Stanford faculty in 1961. During the more than 30 years at Stanford, Jaedicke served as an associate and full professor, directed the school’s Ph.D. program and became associate dean for academic affairs from 1969-1981. In that latter post, he became the right-hand man for Dean Arjay Miller, a former president Ford Motor who joined Stanford as dean and who Jaedicke publicly called his mentor. When Miller resigned in 1979, Jaedicke served as acting dean for a year while the school searched for a prominent outsider. It found Rene C. McPherson from the Dana Corporation. After a stormy tenure, McPherson quit in 1982. Jaedicke then succeeded him, got the job. officially taking over as the sixth dean of the GSB from 1983 until 1990.
He was a low-key unassuming leader, who drove a Chevy Malibu when many of his friends were driving BMWs. Admired for his intelligence and willingness to work hard, Jaedicke was known as a straight shooter who strongly believed that business schools should be places that did serious research, a belief that led to his “balanced excellence” approach to business education. ”What it really meant was we wanted to do a single faculty we wanted to do outstanding research but we also wanted to do an outstanding job in formulating and teaching professional programs,” he said in 2013 at a GSB conference that brought together five deans of the school. “That is like saying you wanted to do the R&D, and the production and sales all in the same group. That is not an easy model. Research and teaching are very different activities. I am sure the faculty felt they were living in two worlds and needed a 28- or 38-hour day to get all this done. But that was the best way to bring disciplines to bear on managerial education. We also felt that professional programs needed to be rooted in strong academic research.”
Shortly after stepping down as dean, his wife of 38 years, Marilyn, died of brain cancer in October 1990. The plan then, he told a newspaper, was to ”repot” himself in the classroom and take on board assignments, including Wells Fargo and State Farm. He retired in 1992 as a Professor and Dean Emeritus and eventually moved to a small ranch in Bozeman, Mont., where he cleaned his own horse stalls.
A private memorial service will be held at a date to be determined. The family suggests that, in lieu of flowers, memorials be sent to the Cody Missionary Alliance Church, 147 Cooper Lane, Cody, WY 82414.
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