Proposed response to Bursar's questions

Posted on 13/02/05 by tom

Dear Mr. Palfreyman,

Thank you very much for forwarding the questions from three years ago. They are very interesting and we look forward to exploring them further with you.

After having received them, however, it seems to us that it would be difficult to answer them without more information about the college’s endowment.

For instance, you ask us to say “exactly which equities/corporate bonds not to hold”. How are we to have an informed discussion about what not to invest in, if we don’t know what we are invested in? At our brief meeting last week, you agreed that this is not a feasible option to jointly create a list that is comprehensive for every corporation and government in the world.

Moreover, you ask us to discuss in detail how such policies will be carried out and re-considered, both by the students and the endowment committee. But we cannot make such an informed judgement without some information about how the endowment committee functions now. If we know how it functions now, we could make a better judgement about how it might reasonably be expected to do under an ‘ethical’ policy. Obviously, we would be able to follow a very different investment strategy with a very active and well-funded Endowment Committee than we could with one that met only quarterly, with little time commitment.

In point (f) you ask us to discuss whether there might be a situation in which “the duty to maximise charity assets would…override ethical concerns”. However, it would be difficult for us to assess what sort of portfolio diversity or returns to our investments would be acceptable, without more information on the diversity of our current portfolio and the returns it has historically generated. It will rarely to never be the case that there is no “alternative financially advantageous investment” under an ethical policy, just somewhat restricted alternatives. The question must inevitably turn towards what are acceptable returns and levels of portfolio diversity. And this requires information about the college’s current investment goals and strategy.

In addition, a number of your questions regard very specific aspects of the college’s portfolio, such as agricultural land, office space, government bonds, fellowship funding, etc. While the questions you raised about them are ethically very interesting, the number of possible objectionable (and unobjectionable) ways of using these resources are unlimited and therefore our response could be infinitely long. It seems more prudent to discuss how the holdings are actually being used, and deal only with the ethical questions that are relevant to the college’s holdings as they are, and leave the other very interesting ethical questions for other institutions who are faced with them. In order to discuss the ethical issues that arise from the college assets, we need information on, specifically, the college’s assets and portfolio.

We hope that you will take this request for more information seriously. For we are interested in really exploring the ethical and financial questions raised by our college’s investments—regardless of what the outcome of such an exploration might be—and we believe genuinely exploring these questions requires a good-faith effort to provide us with some basic information that, presumably, should be made available to interested alumni and future alumni.

Sincerely,

Oliver Morrison