Radcliffe and Divestiture

While Harvard's management of its $2 billion endowment has attracted at times fierce attention throughout the past decade, Radcliffe College's running of its own $40 million endowment has attracted virtually no attention at all. But quietly, without headlines or fanfare, Radcliffe has established procedures for handling the issue of divestiture, and it appears likely that Radcliffe will soon begin discussions of whether to divest from companies conducting business in South Africa.

Radcliffe first confronted the question of how to resolve the ethical issues surrounding its investment policy in 1978, when Harvard began discussing what to do with its stock holdings in Citibank, which was making direct loans to the South African government. After Harvard decided to divest from Citibank, Radcliffe officials began to look more closely at their own portfolio, according to Elizabeth Heffernan '54, chairman of Radcliffe's Advisory Committee on Investor Responsibility (ACIR).

The ACIR was formed in the fall of 1981 to examine just these issues of investment policy. Modeled along the lines of Harvard's Advisory Committee on Shareholder Responsibility (ACSR), the ACIR is technically a more powerful body than the ACSR. While the ACSR only advises the Corporation, Heffernan points out that the ACSR's decisions are binding, and immediately become the official Radcliffe position on investment issues.

Membership is the ACIR in, however, much more narrowly prescribed than the membership of Harvard's ACSR. The ACIR consists of five voting, members, four members of the Radcliffe Board of Trustees, and one Radcliffe student, Heffernan says. In addition, the President of Radcliffe, the vice president for financial affairs, and the chairman of the Board of Trustees are all non-voting members. By contrast, the ACSR includes an even mixture of four Faculty members, four alumni and four students. And while the ACIR student member is chosen by the Radcliffe Trustees without consulting the Radcliffe Union of Students, the Radcliffe student government, the ACSR's students representatives are chosen by the undergraduate and graduate student bodies that send a representative.

The ACIR thus is firmly linked to the Radcliffe Board of Trustees, to which it makes its recommendations. The ACIR's quarterly meetings are coordinated with the Board of Trustee's own meetings, Heffernan says. And Amey Defriez '49, chairman of the Board of Trustees, notes that "As Trustees, we are responsible for the management of the assets of Radcliffe College." While stating that their task is to manage Radcliffe's affairs "in a very thoughtful and responsible way," Defriez declined to elaborate on how committee members are selected, or what issues have been discussed at recent meetings of the ACIR. Meetings of the ACIR, like those of the ACSR, are closed to the public.

Like the ACSR, the Radcliffe committee votes on proxy resolutions for each of the companies it invests in, Heffernan says. But unlike the ACSR, the ACIR has never yet drafted a general policy statement toward companies manufacturing nuclear weapons, or conducting business in South Africa. So far, Heffernan says the ACIR has closely followed Harvard's lead on investment policy. An observer regularly sits in on all ACSR meetings and reports back to the ACIR, she adds. Radcliffe has "endorsed the spirit" of Bok's 1978 statement opposing divestiture, and its updated version released the spring. But Heffernan says that the ACIR will look at the South African issue from "our own perspective." She said that committee members will discuss the matter at its final meeting this spring, and again in the fall, to determine if the current policy still reflects Radcliffe's views on the issue.