ACSR Battles a Credibility Gap

energized its "commitment" to investigating its ties to South Africa by initiating the case-by-case review system. Under this method, the ACSR systematically researches and reports on the practices of companies--but does so only on the recommendation of another shareholder.

Protest subsided. In theory, this was a step toward divestiture, but last year the Corporation voted against the ACSR's suggestions to sell stock in certain companies. In one key vote, the Corporation ignored the ACSR's advice because the ACSR had radically changed its position. The ACSR argued that its change of heart stemmed from new, condemning information. But for the Corporation, that was not enough.

The issue became the ACSR's credibility. Stevens says that the ACSR's decisions are inconsistent--and perhaps invalid--because almost half the committee turns over every year. But the Corporation craves consistency--so Stevens spent the summer planning how the ACSR can investigate each company more thoroughly so its decisions become more consistent.

Should the ACSR approve Stevens's proposal this fall, the Corporation will scale down its annual review of company practices in South Africa from 50--the number in which it holds investments--to about eight. Hugh Calkins '45, chairman of the Corporation's Committee on Shareholder Responsibility, said in the spring, "By reviewing the practices of only eight or ten companies each year on a rotating basis, Harvard could look more closely at these companies and be able to encourage reform from a well-informed perspective."

If the opinion of Gordon D. Kaufman, Mallinckrodt Professor of Law and an ACSR member, is any indication, the other committee members will encores Stevens's plan. Because the ACSR had investigated a company only at the request of another shareholder, "last year's system left us in the position where we ended up voting yes or no on proposals that we felt should have different wording or different emphasis. We were simply in the position of reacting to other people's work," Kaufman says.

But with a small, set agenda, the ACSR may be able to make proposals of its own. "There is the chance," says Detlev F. Vagts '49, professor of Law and former ACSR chairman, "that if they stick to their agenda, the ACSR might hit upon a company with beastly practices that no one has ever looked into before. And that would put the Corporation in the position of initiating shareholder resolutions."

But not only would such a bold step be contrary to University policy, it would force the Corporation out of its chosen passive role. Vagts suggests, "Members of the Corporation would be very sensitive to this."

The Corporation is trying only to make the ACSR credible, but those efforts may force the Corporation to commit itself to looking into shareholder resolution, and Jorge I. Dominguez, professor of Government and a former committee member, anticipates trouble if the Corporation stumbles into such a role. "I'm sure that's a bridge no one will cross until they come to it," he says. Although the eight-companies-a-year plan is still a proposal, it seems likely to pass. And committee members say it is likely that the early investigations will include familiar trouble spots--companies under scrutiny because of non-Harvard shareholder resolutions. Companies preciously reluctant to give the ACSR information and companies recommended by Black South African students might be among the first eight, Vagts says. Dominguez adds to that list companies in which the University has invested a lot of money and time--and companies in controversial industries, such as nuclear power.

Citing the University's continuing commitment to checking South African investments, Stevens is optimistic about the new plan. Under the old policy, he says, "you ended up knowing a little bit about a lot of companies." But Vagts is more cautious. He hints at differences that linger between the ACSR and the Corporation, and says that although the information about certain companies may be more comprehensive a sense of investment trends will be lost.

Perhaps for the alumni of the torchlit march, little has changed. But for other undergraduates--those who no longer protest--enough has. Divestiture is still a dream--President Bok frequently says that the University can help South Africa more by remaining a shareholder and voicing its concern through resolutions. But the ACSR now acts as a moderate influence--and it may eventually temper the Corporation.

So the debate goes on. More quietly, but it does remain, surrounding even the most basic issues. Kaufman admits the impact of a Corporation vote is extremely small. No matter how much work the ACSR does, only 1 per cent of any stock can be shifted by Harvard's vote. "I'm not sure this accomplishes anything and that's bad," he says, adding, "But for Harvard not to vote or abstain on any of these issues would be bad, too." Fall 1980. There are shades of gray between the black and white of spring 1978.

The torchlit march may seem like ancient history to underclassmen, and its chant, "the struggle continues," has faded. But even now, some seniors says they can still hear it echoing through the Yard.