Panel Studies MIT’s Divestment Process
Divestment from Sudan was ‘Untimely’ And Poorly Understood, Says MIT VP
A five-person panel is in the process of reconsidering how the Advisory Committee on Shareholder Responsibility “can be most helpful to the Corporation and the community in general,” Kirk D. Kolenbrander, Vice President of Institute Affairs and Secretary of the Corporation, said on Tuesday.
The ACSR, an ad-hoc committee that makes recommendations to the Corporation’s Executive Committee about MIT’s investments, has been widely criticized for its slow response to the Darfur conflict. However, Kolenbrander said that reconsidering the ACSR’s structure is “bigger than Darfur,” though that was the impetus for rethinking the ACSR’s operational guidelines.
“[The] ACSR has a long history, but was called into action most recently to discuss divestment in Darfur, which was ultimately adopted,” said Kolenbrander. “That adoption wasn’t particularly timely or well understood. [These reconsiderations are] our working through how we wanted to handle that,” he said.
At the heart of the issue is the committee’s perceived inefficiency. By the time the ACSR convened in Sept. 2006 to discuss the Darfur conflict, Harvard had already divested 14 months prior. According to a timeline produced by MIT-STAND, a student anti-genocide coalition, MIT took a total of 51 months to announce its intention to divest; in comparison, Harvard responded in 26 months.
Another issue, cited by both Kolenbrander and Kayvan Zainabadi G, is the ASCR’s apparent lack of transparency. There is no publicly-available listing of the ACSR’s operating principles. Furthermore, after the ACSR’s recommendation that the Corporation divest from Sudan, there was no report made available to the MIT community about the methods or evidence that led to the recommendation.
The other four members of the MIT community helping to draft the revised ACSR guidelines are James A. Champy ’63, a member of the Corporation’s Executive Committee; Seth Alexander, President of the MIT Investment Management Company; and students Zainabadi and Bernard A. Mares G. There is currently no timetable on how long it will take to finish drafting the guidelines.
Need for a standing committee?
MIT-STAND has advocated for the ASCR to be replaced by a permanent Standing Committee on Investment Responsibility, to be patterned after the standing committees that schools such as Harvard, Stanford, and Yale already have.
In contrast to MIT’s ad-hoc ACSR that is comprised of appointed members, Harvard’s ACSR meets on a regular basis and is comprised of elected students, faculty, and alumni. It also has a two-person Corporation Committee on Shareholder Responsibility that meets to further discuss the recommendations that the ACSR has made. On April 4, 2005, the CCSR issued a lengthy official statement discussing Harvard’s divestment from PetroChina “in light of the advice from the University’s Advisory Committee on Shareholder Responsibility.” MIT has not indicated that it will release any internal ASCR reports to the public, though Kolenbrander did say that the finalized ACSR guidelines may be published online.
There is currently no plan to replace the ACSR with a standing committee. When asked whether MIT would follow Harvard, Stanford, and Yale’s leads, Kolenbrander responded, “Our [MIT Corporation] Executive Committee has given the ASCR thought, and it really is quite appropriate for the challenges that MIT would need to consider.”
Zainabadi, however, had a different take. “MIT was the fifty-third university to divest from Sudan. We don’t think that’s a coincidence,” he said, citing an Aug. 2007 copy of the Investigators Against Genocide’s list of universities that divested from companies “helping to fund the genocide in Sudan.” He pointed to the efficiency with which Harvard, Stanford, and Yale divested; on the same list, they were first, second, and seventh, respectively.
MIT-STAND member (also a former Tech opinion columnist) Ali S. Wyne ’08 has a more moderate viewpoint: “The standing committee would be ideal, just because there’s a sense of permanency. Having said that, a heavily revised ACSR would be a very suitable compromise … But we want to be taken seriously, and most people give a permanent committee more weight.”
Goals and limitations
Kolenbrander said that the main goal of the ACSR should still be to provide the Corporation with the information that it needs to make important investment decisions. Additionally, the five-person committee needs to figure out “how to help [the] ACSR make it clearer to the community how [it] becomes involved in shareholder responsibilities.”
One problem that the committee will face is striking a balance between guidelines that are too general and guidelines that are too specific. Given the nature of ad-hoc committees convening only when deemed necessary (for instance, the ACSR did not meet between 1999 and 2006), it may be difficult to draft guidelines that remain relevant several years down the road.
One goal that has already been achieved is the drafting of new guidelines, with students central to the discussions. Wyne said he hopes that the influence student groups had in convincing the Corporation to rethink its views on social and ethical responsibility will inspire other students to collaborate with administrators. “When I was in the [Undergraduate Association], I know that I would literally, every day, run into people who thought that students were helpless,” said Wyne. “But this example shows that if you persist, if you meet with [the administrators] over and over again, you can make changes. I don’t want to sound like a wide-eyed idealist, but great changes are possible.”