A Game of Pressure

TO SOMEONE untrained in the ins and outs of shareholder responsibility, almost every proxy resolution that comes before Harvard's two-tier shareholder establishment looks pretty reasonable. The resolutions are aimed at indisputably good causes: withdrawing corporate support from racist or colonial African governments, keeping corporations from dabbling in politics, and protecting the environment were among the most common this spring.

But the Advisory Committee on Shareholder Responsibility and the Corporation Subcommittee on Shareholder Responsibility have managed to find enough objectionable points in this year's batch of amendments to vote against a solid majority of them. Harvard opposed, for instance, a series of resolutions asking corporations to affirm their political nonpartisanship because, although the sentiments behind the resolution were noble, the corporations had already said publicly that they are nonpartisan.

That objection seems, of course, to be a minor point; certainly it couldn't hurt the company to affirm its nonpartisanship again. The ACSR and Corporation subcommittee, though, don't operate that way; they generally vote according to the wording, not the spirit, of the resolutions. It's as if both groups, particularly the Corporation subcommittee, vote on each resolution as though, with Harvard's approval, it would immediately go into effect.

The flaw in that kind of logic is that it doesn't take into account what shareholder resolutions actually do. It's safe to say that none of the resolutions Harvard voted on this spring has even a slight chance of actually getting the approval of stockholders owning a majority of the shares in any of the corporations involved. The people and foundations who propose shareholder resolutions are aiming instead at getting 3 per cent of a corporation's shares on their side, so that they can propose the resolution again the next year. The idea behind shareholder resolutions, unless the attitudes of most stockholders change drastically in the near future, is to pressure corporations into stands on issues they wouldn't otherwise take stands on. The main point in a resolution like the one this spring that called on Gulf to disclose information on its operations in Angola is to pressure Gulf about its involvement in the Portuguese colonial regime there--but Harvard opposed the resolution, saying Gulf had already disclosed enough noncompetitive information.

At any rate, the ACSR and the Corporation do at least have a consistent line they follow on most resolutions, although the Corporation is more inclined to share management's view than the ACSR, opposing all the resolutions the ACSR opposed and some that the ACSR approved. The more resolutions Harvard deals with--this year's total was 45, as opposed to only 16 last year, the first season for the ACSR and Corporation sub-committee--the more smoothly it seems to be able to handle them.

THE HARVARD corporate responsibility structure is generally for prohibition of corporate contributions to political candidates, but against prohibiting contributions to referenda. It is against disclosure of information when the corporation has already disclosed some information or when the information might be competitive. It is against review committees and quota systems and, in its most consistent positive stand, for corporate withdrawal from the South African colony Namibia. Most resolutions fall into one of several common categories, so once the ACSR and the Corporation have laid out their ground rules, which don't appear likely to change, the pace of voting speeds up.

One effect the faster pace seems to have had this year, ironically, is taking Harvard's shareholder stands out of the public eye. Two years ago, when shareholder responsibility was more explosive and Harvard abstained on a resolution calling on Gulf to issue a report on its Angola operations, black students occupied Mass Hall the next day. This year, when Harvard opposed a near-identical resolution, no one seemed to notice. Part of the reason, of course, is the changing times, but part is also that the 1972 abstention came after a two-month-long buildup and was an unprecedented move, while this year's vote was announced routinely along with 25 other resolutions.

As shareholder issues lost their post-Mass Hall glamor for students, the student ACSR, which last year took stands on every important proxy resolution, went into a dormant state. At the beginning of the spring season, the student group grandly announced that it would widen its scope this year and focus on community affairs as well as shareholder issues--and proceeded to do not much of either.

Shareholder responsibility is a game where pressure is of the utmost importance, generally overshadowing the finer points of specific resolutions. The most important shareholder event of the year--Harvard's letter to Middle South Utilities calling for more pollution controls on an Arkansas power plant, the University's first stand on a non-proxy issue--came about largely as a result of pressure from Arkansas community groups and students here. Without that pressure the University could easily have ignored it. Students can also pressure the Harvard shareholder structure in its proxy votes; with pressure, after all, the University abstained on the Angola report, and without pressure it opposed Angola disclosure. The Corporation, in the same way, should realize that pressure, not the specific wording of resolutions, is what shareholder responsibility is all about.