The Illegitimate ACSR

To Harvard-Radcliffe Undergraduates, Members of the Advisory Committee on Shareholder Responsibility and Members of the Harvard Corporation:

I, Julie Fouquet, undergraduate representative on the ACSR, hereby resign. My reasons fall into three categories: 1) The illegitimacy of the ACSR as a group representing the Harvard community; 2) Problems within the ACSR, and 3) Lack of effectiveness of the ACSR.

The ACSR is hardly a representative body. Generally all members are appointed by the various deans. Only the undergraduate is elected. There is only one undergraduate position on the committee of 14 (12 voting members) and there is not a single position for a non-faculty employee. Most of the appointed members are specialists in certain areas of the social sciences. Both this semester and last, two-thirds of all ACSR members are from business, economics, government and law, in spite of a letter of protest to President Bok last spring from the Undergraduate Committee on Shareholder Responsibility. While training in these areas does not make members immoral, it tends to give them a limited perspective and slants their views toward the corporations. The secrecy which the committee has tried to maintain, especially last spring, inhibits contact with constituencies, particularly through the press. This fall I seem to be the only member concerned about the problem, since I am apparently the only one who wants to represent my constituency to any extent.

There is some disagreement within the administration as to whether the ACSR is supposed to be a representative body. In response to criticism of the Southern Africa Solidarity Committee, Mr. Steiner said last week that the ACSR is not supposed to be representative of the Harvard Community. However, in his 1978 commencement speech, which of course reached a much larger audience, President Bok claimed that the ACSR is representative. Regardless of President Bok's public relations, I maintain that the ACSR is not representative, but certainly should be.

The lopsided composition of the committee has led to an improperly large concern within the committee about the financial and legal aspects of decisions being made by the committee to the exclusion of many of the moral aspects. For instance, some committee members fear that if Harvard were to initiate a shareholder resolution, stock prices could be driven down so far that the company would sue Harvard, causing Harvard to pay out all sorts of legal expenses. (This view, incidentally, conflicts with the Corporation's view that Harvard has so little clout that divestiture would be ineffective.) This fiscal and legal responsibility is largely redundant. Harvard has some extremely competent management investors and I am sure the administration has professionals to deal with other facets of these subjects. Not only is the ACSR's concentration on them inappropriate, it is dysfunctional. The ACSR was set up in response to student demands for a group to investigate the social and moral aspects of Harvard's actions and lack thereof. Although social consequences are sometimes discussed, they tend to appear secondary and the discussions are largely superficial. When the question that Harvard might be sued was raised, ACSR members discussed the negative fiscal and legal consequences of action for Harvard, while they ignored negative consequences of inaction for the people of South Africa.

While on the ACSR I have seen uninformed decision-making, excessive stalling, considerable manipulation and always excuses for inaction. I seriously doubt the commitment of some participants to the fulfillment of their jobs. I had viewed the ACSR's investigation into South Africa as an attempt to determine what Harvard could do to help blacks in South Africa achieve majority rule. A significant portion of the committee does not seem to believe in majority rule even here at Harvard.

During the ACSR meeting of Nov. 29, 1978, the following hypothetical situation was discussed: if the whole Harvard community (variously defined as 90 to 99 per cent) were to favor the initiation of a shareholder resolution in a company, should the Harvard Corporation be bound to take the action? The answer of these members was no, because, in the words of one, it was "too much democracy." Since some committee members have shown what I consider paternalistic attitudes towards South African blacks, suggesting that blacks do not know what is best for themselves, I wonder why these members should doubt the rights of the white elite to rule the supposedly uninformed blacks.

In summary, due to the composition and method of selection of members of the ACSR, the committee fails in its purpose of investigating the moral side of Harvard's decisions. Instead it delivers the same views as the administration, only with an invalid stamp of "social responsibility."

Committee members are not wholly responsible for what I consider uninformed decision making. Mr. Laurence Stevens, the ACSR's secretary, plays a large role in this problem. Committee members are supplied with huge amounts of information, both from the Investor Responsibility Research Center and clippings from such publications as The Wall Street Journal and The Crimson. However, many well-informed sources favorable to the exit of U.S. corporations from South Africa are largely ignored. The United Nations Center Against Aparthied publishes about 30 informative pamphlets a year. Mr. Stevens is aware of this source, but the only U.N. Center Against Apartheid pamphlet ACSR members saw last year was one I brought in myself for Mr. Stevens to xerox (an accepted practice on the ACSR). It took about three weeks and a threat to make an issue out of the problem in The Crimson before Stevens distributed the pamphlet, which contained rather shocking statistics comparing infant mortality and deaths from preventable and curable diseases between black and white South Africans.

The effects of this information bias are serious. After discussing the issue of South Africa for two months, my predecessor on the ACSR was not aware that there is massive starvation among South African blacks. Some current committee members are unaware of the key role Bantustans play in the apartheid system. Some altered perceptions of the problem are bound to influence decisions.

Events happen very slowly within the ACSR, due to a number of reasons. It is hard to compare companies' performance in South Africa if the companies haven't been asked to supply the relevant information. The Harvard-IRRC questionnaire was sent only to companies with large investments in South Africa. Hence it is not possible to judge a significant number of corporations.

Last year the ACSR did not initiate any shareholder resolutions, putting off the question until this year. This year it will not be possible to initiate any because we started meeting so late. The reason given was that not all the members had been selected. That explanation seems weak to me. Why wasn't the selection process begun earlier?

The whole case-by-case approach is unrealistic. I said that it was impractical at last year's corporation hearing, and I believe the same thing now. This year's progress has not even met my meager expectations. Half of the committee has studied, though not evaluated according to plan, three corporations. That's as far as we have gotten. A unified treatment is necessary for this reason and others which I listed in Appendix C of the last ACSR report.

On some issues the ACSR has regressed, when compared to the position it took last year. With regard to corporations, last year's ACSR decided that a company had to prove why it should stay in South Africa. Few of the petitioned companies provided the information Harvard requested. Instead of taking action against so many companies, the trend within the ACSR has been to justify their continued presence. For instance, even though IBM distorted its employment data, failed to provide important information, and attempts to sell computers to the South African Department of Defense, the feeling was that we not take any action against it, because it might turn out to be one of the best companies there. The original idea was not to simply make some relative judgement.

The ACSR is a purely advisory body. Any of its recommendations can be ignored or altered. I am afraid that these conditions have rendered the ACSR largely ineffective.

Alterations in the bank divestiture policy have diverted its purpose from urging banks to immediately make statements that as a matter of policy they will neither make nor renew loans to the South Africa government. The corporation should follow its plan issued in the May 1978 report. If the bank does not state that it will make no more loans to the present South African government or its agencies, then Harvard must divest. I must strongly disagree with the policy of changing the requirements if not all banks follow them. This problem bears many similarities to the inadequate responses of companies to the Harvard-IRRC questionnaire. If Harvard lets the banks and companies determine its policies, then nothing will be done by Harvard.

Last year, after considerable discussion, the ACSR recommended that the corporation vote Harvard's shares in favor of some resolutions favoring modified withdrawal of some companies. The Corporation abstained on them, the reason being that there was no time to meet beforehand. This problem should have been anticipated by Mr. Stevens. In any case, it seems quite suspicious to me that the corporation should negate the ACSR on one of the most important set of decisions it made. I imagine there was some relation to the fact that those decisions were some of the largest steps toward supporting withdrawal that the ACSR has taken.

I cannot continue to legitimize the ACSR in the eyes of undergraduates. It may seem strange that the undergraduate, the only elected representative, would be the first one to leave, but I feel it is appropriate. I hope other members of the ACSR will consider their functions and work for the reform of the committee. As of now I cannot see returning to the ACSR unless its composition is altered to include some workers and members from a fairer distribution of specialties. Democratic election of all representatives is necessary. Then the committee should be invested with the power to make decisions, after consultation with the Harvard Management Corporation, which are binding on the Harvard Corporation.

Julie Fouquet '80 resigned last week as the undergraduate representative to Advisory Committee on Shareholder Responsibility [ACSR], and the above article is excerpted from her letter of resignation.