Students May Gain Sway Over Univ. Portfolio
Until this semester, any recent attempts at students influencing the University’s financial decisions were limited to combative Wespeaks and camp outs in front of the Investment Office. Now, after two years of intense protest for divestment from weapons contractors, students will have a voice in shaping the University’s investment policy, assuming that President Roth gives his final consent.
A proposal to create the Committee for Investor Responsibility (CIR), which already has four confirmed student members, has been submitted to President Roth for approval. The committee, which will concentrate on the University’s ethical, moral, and social investment responsibilities, is slated to have 11 members drawn from the ranks of students, faculty, staff and alumni.
Currently, Jen Liebschutz ’11, chair of the Wesleyan Student Assembly’s (WSA) Committee for Finances and Facilities (FiFac), WSA member Aubrey Hamilton ’12, Alexa Atamanchuk ’12 and Kathy Stavis ’10 hold positions on the CIR.
These students, in addition to other committee members, will make recommendations to the Portfolio Subcommittee of the Board of Trustees’ Finance and Facilities Committee for review at each official Board of Trustees meeting, and will cast proxy votes on behalf of the University during corporate shareholder meetings.
The CIR will replace the now defunct Endowment Advisory Committee (EAC)—an all student committee under the WSA that monitored institutional investments in terms of the University’s objectives and integrity. The EAC was unable to effectively reflect the views of the University community as a whole, explained Becky Weiss, former chair of the EAC.
“Our knowledge wasn’t good enough,” she said.
The EAC also lacked the ability to make any final decisions for the University.
In the spring of 2008, the EAC worked with Students for Ending the War in Iraq (SEWI) in a campaign advocating the University to divest from the weapons contractors General Dynamics and Raytheon. A proposal for divestment was presented at the Board of Trustees’ annual meeting last May. Though the board unanimously voted against divestment, they voiced their support of the development of a new committee whose recommendations would have greater weight.
“[The EAC] brought our idea to the Board of Trustees,” Weiss said. “At the May board meeting, they approved the spirit of the creation of such a committee.”
The board wanted to look at the proposal and CIR charter more thoroughly, however. An ad hoc committee, consisting of Weiss, Liebschutz, Chief Investment Officer Tom Kannam, Chair of the Board of Trustees Jim Dresser ’63, and Board member Michael Klingher ’78 was formed to review and edit the charter.
“There wasn’t much contention working with the two trustees and the Investment Office,” Liebschutz explained. “We were all in agreement on what the purpose of the committee would be.”
During this process, the Investment Office advised the ad hoc committee on the mechanics and details of the University’s investment strategy, explained Kannam. Once the committee is fully formed, the Investment Office will continue to provide similar advice.
“The Investment Office will be involved as non-voting participants, informing the discussions of CIR with relevant information,” Kannam wrote in an e-mail to The Argus.
Retaining some of the structure of the EAC, the CIR will still have 5 student members: the chair of FiFac, a WSA representative, the Investment Office’s intern, and 2 appointed non-WSA members. Earlier this month, the WSA internally elected Hamilton as the second WSA representative on the CIR. As the Chair of FiFac, Liebschutz was automatically designated as co-chair for the CIR.
“This will have more representation from the Wesleyan community,” Hamilton said. “It’ll have a lot more power.”
The committee will additionally consist of two faculty members, two staff members, and two alumni appointed by University Relations. Additionally, there will be one representative from the Investment Office who will serve as an ex-officio member of the committee.
“We should have a say in the companies we’re invested in,” Liebschutz said.
To ensure investor responsibility, the CIR will participate in shareholder advocacy, such as corporate letter writing and proxy voting.
Proxy voting, either via mail or online, allows shareholders to vote on the actions of the corporation, even if they are unable to attend the actual meeting. The CIR intends to engage in proxy voting this spring, when many companies hold their annual shareholder meetings. According to Liebschutz, unlike committees at other schools, the CIR will be able to have the final say on all proxy voting.
“What our committee votes for is the final proxy vote,” she said. “This gives us real power and is really exciting. At other colleges, their investment offices have the final say.”
Weiss also stressed the importance of participating in proxy voting.
“A non-vote is a vote in favor of management,” she said. “And that’s not always a good thing. On the other hand, a letter from a university is a big statement.”
Despite the role the EAC played in the divestment campaign, the CIR will focus on finding ways to effectively influence companies the University is already invested in.
“Divestment is not [the CIR’s] primary concern,” Weiss said. “The committee’s goal is to look for the positive ways to influence the companies we’re already invested in. If a divestment case does occur, [the CIR] will make a recommendation to the Board’s subcommittee and it will go from there.”
According to Hamilton, who is a contributing writer for the Argus, the CIR’s recommendations may carry more weight than those previously made by the EAC because of the combination of students, faculty, staff, and alumni.
SEWI member Laura Heath ’11 also expressed hope that the CIR would have greater legitimacy in future campaigns for investor responsibility.
“I think in a lot of ways [SEWI] just came off as a bunch of crazy hippies,” Heath said. “Which isn’t right. But I think [the CIR] will have more of an institutionally recognized voice.”
The CIR plans to hold two forums each year where students can come and contribute their thoughts on investment choices and action taken by the committee. According to Hamilton, informed student viewpoints will have a strong impact on the recommendations made by the CIR for the board.
“If the student body as a whole feels strongly about investing or divesting in a certain company, this will be reflected in our proposals for the Board of Trustees,” Hamilton said.
However, all final decisions on investment and divestment are in the hands of the Board.
In spite of the positive expectations Health holds for the CIR, she also expressed reservations about the extent of the CIR’s impact.
“I don’t think we can make Raytheon a better company by proxy voting and letter writing,” Heath said. “But I think there are a lot of companies where that might work.”
Currently, the proposal awaits President Roth’s approval. Kannam presented the it to the President, and explained that further development was now in Roth’s hands.
“President Roth has received the proposal for the CIR and will be communicating with the Wesleyan community about it in the future,” he wrote.
Liebschutz emphasized the nearness of committee’s approval. She said that the committee will convene with as many of its members as it can before Spring Break.