The Board of Trustees moved to institute a permanent advisory committee on investor responsibility during its Fall-term meeting.
Paving the way for a new committee that will handle many of Dartmouth's investment decisions, the Trustees' decision marks Dartmouth's first step toward disclosing how it invests its endowment.
The formation of the committee caps years of behinds-the-scenes debate, in addition to some more visible protest, over Dartmouth's lack of transparency about where it invests its endowment.
The committee's formation can be seen as a compromise between one side of the investor responsibility debate that wants Dartmouth to divest from such industries as tobacco, and the side that believes Dartmouth should invest in whatever provides the best return. By focusing on transparency and investor responsibility, those involved in the decision-making said, the committee will meet both camps halfway.
College President James Wright's decision to recommend the institutionalized investment watchdog drew on the findings of a previous committee.
That committee was formed last spring to address investor responsibility.
The issue had grown in importance after a small student group began seeking ways to make the administration divest from tobacco companies.
In August, the College committee recommended that Wright create the permanent advisory committee and to disclose to the Dartmouth community how the endowment is invested -- which Wright in turn announced to the Trustees earlier this month.
In a statement, Vice President of Public Affairs Bill Walker said Wright followed through with the recommendation because he was "well aware of the fact that students are concerned about socially responsible investing and believed that the formation of this committee would be an effective process to address that concern."
Previously, a subcommittee of the Trustees dealt with this issue, but the full schedule of the members limited them to meeting only when there was a pressing concern.
Board of Trustees Chair Susan Dentzer '77 said the Board agrees with the President that "investment policy considerations are important considerations. There should be a forum for allowing that debate to happen about investments, and that forum is going to be the committee."
Dentzer said there was no vote by the Trustees, but that the Trustees simply "thought it was a good idea" and gave their approval.
Despite the recent progress on the issue, many details remain to be worked out. What has been decided is that the committee will consist of faculty, alumni, students and administration, the president's office said.
The new committee will focus on a more "constructive role" as a responsible institutional investor, Acting Vice-President of the College Adam Keller said. The committee will use its shareholder votes to influence companies to be globally responsible.
But some say the very structure of the committee could prevent that goal from materializing.
One administrative source questioned how much actual power the committee's recommendations will have.
Some activists remain hopeful. "What makes what we've been doing different is we're focusing on issues of process. In the past, it's always been about a single issue. [Activists] fight tooth and nail, then the College goes to sleep," said Charlie White '02, who along with a group of students two years ago began to question administrators about how to influence Dartmouth's investments.
Some activists in the investment debate see the new committee as a first step. "Eventually what we want is a policy based on socially responsive investment," Sasha Earnheart-Gold '04 said.
Dentzer, though, was careful to stress the importance of getting returns on Dartmouth's investments.
"The reality is we need high investment returns. That may at times be at odds with other things we think are valuable," she said.
While details remain scarce, officials said the committee will have at least some space to disclose Dartmouth's investments to the community. But, they said, the disclosure will probably not go so far as to be on the Internet.
While a divestment campaign helped spark the formation of the advisory committee, the committee will likely not focus on divestment issues, Keller said. Divestment is "not a black and white issue," he said.
"Divestment does draw a lot of attention," White said. "But when you go beyond that, you see that the bulk of influencing business through investment is through shareholder resolutions. ... You loose your voice when you sell the shares."
White added that the committee formalizes opportunities for students to pressure the College.
"My hope and vision for this committee is that it will give students interested in activism another forum. In some ways it is the burden of this committee to act responsibly without the pressure of students," he said. "But it's my hope that the students on the committee will make the most of it."
