Breaking with Precedent

ARKANSAS COMMUNITY Organizations for Reform Now didn't seem to have much of a chance when they asked Harvard for help in opposing Arkansas Power and Light's plan to put a huge coal-burning sulfur-emitting power plant on the banks of the Arkansas River. It wasn't so much that Harvard was enamored of power, though that charge has of course been made in the past. The problem was more that Harvard had never been faced with such a request before, and Harvard's relevant committees--the student-faculty-alumni Advisory Committee on Shareholder Responsibility, chaired by Stanley S. Surrey, Smith Professor of Law; and the Corporation's Sub-committee on Shareholder Responsibility, which makes the final policy decisions and consists of four substantial businessmen--last year proved their tenacity to precedents in University policy. President Bok set up the ACSR and the sub-committee less than two years ago, so they didn't have too many precedents to choose from.

Of their few precedents, most involved proxy resolutions brought up by activist shareholders. Harvard doesn't like the idea of initiating or taking a leading role in such matters at all. The Austin Report, the January 1971 statement of a committee appointed by President Pusey after Campaign GM sparked the first wave of interest in shareholder responsibility, specifically ruled out University soliciting of proxies for socially desirable causes, leaving such action to the activists.

Harvard has followed the same line ever since. Last year the ACSR put off a query by Richard Wilson, professor of Physics, on the safety of nuclear reactions built by General Electric and Westinghouse, in which Harvard held a total of $26 million worth of stock. Wilson said Harvard should publicize the problem of the plants' safety even though no shareholder group was doing so, as part of the University's function, "to educate and inform people." The ACSR didn't dispute him, but in its first year it considered only matters where shareholders were sponsoring resolutions.

SO WHEN these Arkansas people appeared out of nowhere and asked Harvard, the largest single shareholder in the holding company that owns AP&L, to help get AP&L to modify its plans for the power plant even though no other shareholder was sponsoring a resolution about it, the outlook wasn't bright. Harvard committees don't usually break with corporate management if there's a remotely conscionable way to avoid it--lack of an enabling precedent, for example. At the same time, if Harvard agreed to ACORN's request, it might set a precedent for the future. Any activist group could pick out a company Harvard owned stock in and ask Harvard to play a leading role in opposing its policies citing the ACORN case. This bureaucratic nightmare must have taken on new, terrifying credibility in the months after ACORN's request, as a whole batch of utilities in which Harvard owned stock--Louisiana Power and Light, Kansas Power and Light, even Mississippi Power and Light, which was charged with racially discriminatory hiring practices a few years back but had pretty much dropped from sight--threatened to become new problems for the committees to consider.

The most obvious way to handle the problem, and the usual Harvard procedure for disposing of intransigent problems, might have been to set up a study committee. A study committee might find the issue complex, with much to be said for both sides, so that both sides should make some concessions. Better still it might decide the matter was complex enough so Harvard should stay out altogether.

But obvious solutions sometimes have obvious things wrong with them. For one thing, the ACSR showed its skepticism of study committees last year, opposing activist demands that several companies set them up because they'd dilute management's responsibility. Besides, a study committee was not only part of what ACORN was asking for--not necessarily the ideal way to maintain the Harvard self-image of impartiality--but might itself constitute a precedent besides. If ACORN could ask Harvard to set up a study committee, then so could Concerned Citizens United down in Kansas and Robert Head in Louisiana and anybody else who wanted to try it--not to mention the expense involved even the first time.

Some of the student members of the ACSR, and some professors interested in environmental issues, would probably have been willing to establish a study committee anyway. But Surrey, probably with the support of a majority of the ACSR, worked out a compromise, which he introduced towards the end of a relatively stormy meeting, reportedly sparking some discontent among ACORN sympathizers who felt they'd been outmaneuvered. Harvard wouldn't send a study group to Arkansas, the ACSR decided--instead, interested Harvard professors would read AP&L's 1000-page environmental impact statement and other reports on the plant and comment on their conclusions.

THE ONLY TROUBLE with this approach was that it meant Harvard had to rely on its experts. If they questioned the AP&L report's conclusions, when Harvard had already turned down ACORN's request for a study committee out in the field, Harvard would be hard put to ignore their recommendation.

It looks as though the experts may raise questions about the AP&L report--say it's a reputable job with lots of solid facts but some dubious conclusions. And that may mean that Harvard will have to break with precedent. For example, the ACSR may come out for telling AP&L and the Arkansas Public Service Commission that something should be done about the proposed plant's sulfur dioxide emissions.

Some committee members may find the prospect of such a break a bit unpalatable, at least until they've thoroughly mulled it over. Surrey recently tried to tighten up the confidentiality of the ACSR's meetings, addressing stern admonitions to the members and publicly denying that the ACSR is thinking in specific terms at all. But Harvard will probably manage some solution. In fact, its outlines may already be emerging. If the ACSR couples its AP&L recommendation with a reminder that AP&L's plans call for the largest coal-burning plant in the country, it can say that the case isn't comparable to whatever others come its way. With enough determination, Harvard committees can do almost anything--even set a precedent without setting a precedent.