Investor Responsibility

In reaching a decision as to whether to invest or not to invest, to divest or not to divest, the College will adopt a case-by- case approach rather than broad categorical strictures, monitoring as far as possible "all of its investments through the full gamut of societal issues."

Such a procedure was recommended to the Trustees by the faculty-alumni-student- administrator Advisory Committee on Investor Responsibility in a report ap- proved by the Board at its April meeting.

"Thus, no gross or all-encompassing issue or place-oriented definition could serve as a decision criterion," the report states in indirect reference to persistent demands for divestiture of shares in concerns doing business in South Africa. "No simple decision could be made that all strip mining was wrong, that all infant food formula sales in developing countries was wrong, that all investment by United States companies in given countries (e.g., Chile, South Africa, or any other country per se) was wrong." Any other approach, the committee contended, would constitute "unacceptable oversimplification, not in keeping with the essential search for truth that is embodied in the . . . historic purpose of the College."

The eight-page report - a retrospective glance at the committee's activities and its governing principles since its 1971 origin as an ad hoc committee appointed by President Kemeny to examine investment objecbtives, and a list of recommendations and revised guidelines for the future - is an important "white paper" on the subject, says Tuck Professor Wayne Broehl, who has chaired the committee from the start.

The Trustees set down their own guiding principles in a comparatively terse statement on "Policies Regarding Votes on Proxy Issues," dated February 23 but delayed because of agenda laden with such pressing local issues as fraternities, the Medical School, and the prevailing quota on women students.

"The Board will not," the statement declares, "issue institutional position papers on matters arising in proxy disputes." It will "continue to authorize the casting of votes on proxy issues whenever so advised" by the advisory committee and confirmed by its own committee on investor responsibility, but it will "discontinue the practice of writing letters to management" except to call attention to votes against management or, "in extraordinary cases, the Board will consider the desirability of an explanatory communica- tion to management if so requested" by the two committees.

With the advisory committee's help, the Trustees proposed as the essence of their policy, "the Board will monitor the companies in which College funds are invested and decide to divest its holdings if the Board either loses confidence in the management of the company, or if sufficiently serious moral issues have been raised for the Board to feel that the company is no longer worthy of the College's support."

At no point did the Trustee statement directly address the issue of South Africa, resting instead on the enunciated policy of taking no broad institutional stand and of dealing with proxies on case-by-case basis.