University Spokeswoman Cass Cliatt wrote WPRB this morning, pointing us towards a 1997 report (which she had previously mentioned in comments for our first story on Zimbabwe investments) titled Guidelines for Resources Committee Consideration of Investment-Driven “Social Responsibility” Issues.
The report states that:
For the most part the Trustees have delegated the responsibility for selecting specific investments to outside money management professionals. These professionals are provided with a detailed investment policy statement that describes our basic investment goal of maximizing the total long-term return on the endowment consistent with acceptable levels of risk. Quite deliberately they have not been asked to take into account any non-economic social, political, or moral guidelines other than those few South Africa-related limits explicitly approved by the Board of Trustees. The Trustees expect that, in carrying out this assignment, the investment managers will vote on all shareholder resolutions in a manner consistent with the overall investment objective of maximizing the total long-term return on those investments, rather than seeking to achieve some separate social objective.
In order to deviate from the above policy– which is to say, in order to consider the merits of an investment on non-economic grounds– a situation requires involvement from students and/or faculty:
If there is considerable, thoughtful, and sustained campus interest in an issue involving the actions of a company or companies in the University’s investment portfolio, the Resources Committee will study the issue. In the first instance, the Resources Committee will determine what constitutes “considerable, thoughtful, and sustained campus interest” in each case and report its conclusions to the Trustees. It may be appropriate, for example, to require that an issue be raised several times over an extended period of time, say two academic years. The Resources Committee will also consider the magnitude, scope, and representativeness of the expressions of campus opinion in making this determination.
However, how members of the University community would learn of potentially controversial investments and then create “considerable, thoughtful and sustained campus interest”– particularly in the absence of publicly accessible, company-specific investment reports (as it appears may once have been available)– remains unclear.
Also, while the document directly addresses “companies”, it does not appear to indicate whether campus interest in foreign financial accounts (which, among other things, can be bank holdings, brokerage accounts, or mutual funds) would prompt review by the Resources Committee.
WPRB has asked Cliatt for clarification on a number of these issues and will update this post when we hear back.