The Michigan Daily - michigandaily.com
N ew s Wednesday, March 18, 2009 - 7A
The Michigan Daily - michigandailycom INC\X7S Wednesday, March 18,2009 - 7A
ENDOWMENT
From Page 1A
country's policies.
The University of Michigan was
one of the schools to divest, pulling
its investments in the late 1970s.
More than 20 years later, in 1999,
many in the University community
voiced concerns over the endow-
ment's investments in tobacco
manufacturing and tobacco-related
companies. In response, a tempo-
rary committee of faculty, staff,
students and alumni, the Ad Hoc
Advisory Committee on Tobacco
Investments, was created to assess
whether the endowment's tobacco-
related investments were irreconcil-
able with the University's teaching,
research and service missions.
The ad hoc committee ultimate-
ly recommended to the Univer-
sity Board of Regents to "sell all of
the University's currently owned
shares of stock (and not to purchase
any new shares) in companies that,
either themselves or through their
subsidiaries, manufacture sig-
nificant quantities of cigarettes or
other tobacco products," the Uni-
versity Record reported.
Soon after, then-Chief Financial
Officer Robert Kasdin instructed
behalf of the University as a share-
holder, can voice their opinion is
through proxy voting - or voting on
resolutionsintroducedbysharehold-
ers on issues of concern - without
having to attend actual shareholder
meetings. That means the Univer-
sity could still vote on issues relating
to a company located in Hong Kong
or Moscow using the proxy votes it
receives as a shareholder.
Because outside investment
managers make the actual invest-
ment transactions for the Univer-
sity, those outside groups are the
ones dealing with proxy votes for
the companies in which the Univer-
sity's endowment is invested. Even
then, the University could still have
a voice in the governance and poli-
cies of these companies by instruct-
ing its outside managers to vote
certain ways on different issues.
Rightnow,theUniversitydelegates
its proxy voting authority to its out-
side managers and gives them writ-
ten directives on how to vote on proxy
resolutions pertaining to broader
issues like anti-takeover measures,
preserving "one-share, one-vote"
standards and dealing with proposed
mergers and acquisitions.
But in proxy votes concerning
social and political issues, the Uni-
versity instructs all of its outside
Business and the School of Natural
Resources and the Environment.
Peterson said he believes that
instituting an advisory committee
makes sense from a business stand-
point, because it urges companies
in which the endowment is invest-
ed to be more transparent about
their practices, like releasing infor-
mation on a company's emissions or
environmental impact.
An advisory committee could also
signal to companies and corporation
specific issues of concern to the Uni-
versity, Peterson said, while also pro-
viding students with the opportunity
to learn about issues of shareholder
responsibility and proxy voting.
A number of other major colleges
and universities have similar share-
holder responsibility advisory com-
mittees, according to data from the
Sustainable Endowments Institute.
Columbia University's Advisory
Committee on Socially Respon-
sible Investing makes proxy voting
recommendations to the school's
Board of Trustees and hosts an
annual meeting at which the uni-
versity community can express its
opinions on issues concerning the
committee. Harvard University has
two such committees: The Corpo-
ration Committee on Shareholder
Responsibility and the Advisory
Committee on Shareholder Respon-
sibility, a committee that includes
students, faculty and alumni.
SUBSTANCE OR SYMBOLISM?
Whether shareholder activism
through proxy voting actually has
any impact is unclear.
As Business School Prof. Gerald
Davis explained, shareholder votes
are advisory, meaning a company's
leadership can legally ignore the
results of those votes.
"To be brutally frank,"Davis said,
"shareholder votes are mostly sym-
bolic and have no real effect on what
companies do. That and the Univer-
sity is too small to be a significant
shareholder in any company."
Davis cited a case from the 1990s
in which restaurant chain Cracker
Barrel Old Country Stores Inc. insti-
tuted a policy saying that it refused
to employ workers "whose sexual
preferences fail to demonstrate nor-
mal heterosexual values." The com-
pany subsequently fired multiple gay
employees, according to a 2002 jour-
nal article co-authoredby Davis.
Despite a proxy proposal sub-
mitted by one of the company's
institutional investors saying
Cracker Barrel Old Country Stores
should prohibit discrimination on
the basis of sexual orientation, the
company downplayed the proposal
and tried to prevent shareholders
from voting on it. After multiple
years of fighting over whether to
hold a shareholder vote on the pro-
posal, Cracker Barrel's sharehold-
ers finally did, with a vast majority
opposing the proposal and uphold-
ing the existing policy.
Davis added, however, that he
believes shareholder voting can have
a symbolic importance on the part of
the University, and that a permanent
shareholder responsibility advisory
committee could be beneficial.
"The final product of how (the
University will) vote won't make
much difference," he said, "but the
process of deciding what is proper
standard for corporate behavior,
that could be illuminating."
Morgan Simon, the executive
director the Responsible Endow-
ments Coalition, a nationwide
network of students, faculty and
alumni committed to promot-
ing socially and environmentally
responsible endowment investing,
said she believes shareholder
responsibility advisory committees
can exert influence both on campus
and in the boardroom.
"Overall, we see that these advi-
sorycommittees are win-win situa-
tions for the universities protecting
their investments; it's a way of put-
ting money toward proactive use in
society; and it helps corporations
move in right direction," she said.
Simon added that her organi-
zation has helped to start similar
advisory committees at schools like
Columbia University and Amherst
College, and is advising the Univer-
sity of Michigan students currently
advocating for an advisory commit-
tee here in Ann Arbor.
In addition to shareholder voting,
investors are increasingly bypass-
ing the shareholder voting pro-
cess and exerting direct pressure
on executive managers to address
social, political and environmental
issues and policies.
Toffel, of the Harvard Business
School, and Harvard BusinessSchool
doctoral student Erin Reid have
described in a recent working paper
among other findings that sharehold-
ers are successfully pushing compa-
nies in which they invest to provide
more information on emissions and
other environmental issues without
usingshareholder votes.
"Some activist shareholders,"
they write, "have begun bypassing
the formal process of shareholder
resolutions, which are formally
addressed to fellow shareholders
and members of boards of direc-
tors, by directly requesting execu-
tive managers to provide more
information about corporation
social actions."
On Thursday, University grad-
uate student Peterson will be
presenting the student group's pro-
posal for a shareholders responsi-
bility advisory committee to the
Board of Regents during the "Pub-
lic Comments" section at their
monthly meeting.
Ultimately, he said that even
though numerous other colleges and
universities have similar advisory
committees, the value of having a
similar committee at the University
of Michigan is important.
"I think that our goal is to really
make the case for it on its merits,"
he said. "It's worth doing."
Facing bankruptcy,
GM could liquidate
CEO says prolonged
bankruptcy would
scare away customers
DETROIT (AP) - If General
Motors Corp. were forced into
Chapter 11 bankruptcy protection,
the company would end up being
liquidated because a long bank-
ruptcy would scare customers
away, Chief Executive Rick Wag-
oner said yesterday.
Speaking at a breakfast in
Washington, D.C., Wagoner said
restructuring the company out of
court would accomplish 99 per-
cent of what could be achieved in
bankruptcy, but without the risk
of losing customers or the huge
expense of Chapter 1L
Wagoner's statements came
as members of President Barack
Obama's auto task force told
Michigan lawmakers they would
signal next week what direction
they plan to take to restructure
GM and Chrysler LLC.
Sen. Carl Levin, D-Mich., who
met with members of the panel on
Capitol Hill, said they would make
"a significant statement" by the
end of next week on the restruc-
turing. Levin said it would not be
definitive but would show "the
direction that it needs to go."
Rep. Sander Levin, D-Mich., the
senator's older brother, said the
task force made clear they expect to
present a "framework" that would
take into account the companies,
their debtholders,suppliersand the
United Auto Workers union.
BAYDOUN
From Page 1A
ate a closer relationship with Uni-
versity administrators.
Baydoun said he plans on
"meeting with the administra-
tion, challenging the admin-
istration, working around the
administration, working with the
administration and having solid
plans and backup plans to really
tackle these tough issues."
Largely responsible for plan-
ning this year's "Go Blue, Live
Green" homecoming campaign,
Baydoun said he would like to
involve more students in activi-
ties on campus - including MSA.
"I envision an assembly that is
mobilized and that is in touch with
students, that students can really
believe in and that really is able to
go to bat and knows what's going
on and is really able to fight for stu-
dents in a way that has never been
seen before on campus," he said.
the University's investors to sell
all stock holdings pertaining to the
tobacco-related investments within
the next 10 months.
One of the only major divestment
campaigns since then came in 2006
when a group of University students
called on University officials to
investigate the possibility of divest-
ing from any investments with
companies doing business in Israel.
There was no official action on the
part of the University and its inves-
tors in response to this campaign.
SPEAKING UP AS
A SHAREHOLDER
Divestment is one of the more
severe forms ofshareholder activism.
Indeed, there are other ways the
University, as a shareholder, can
speak out about how the companies
in which it is invested operate and
can weigh in on issues of social,
ethical and even environmental
responsibility as they arise within
each company.
One of the main ways Univer-
sity officials and investors, acting on
managers to not vote at all and not
voice the University's position on
such issues, according to a Univer-
sity policy approved by the Board of
Regents in December 1994.
A MORE CONSCIOUS VOICE
A group of University students,
however, wants to change that.
These students want to create a
permanent University shareholder
responsibility advisory committee
that would evaluate proxy resolu-
tions coming from companies in
which the endowment is invested.
The committee would then advise
University officials and outside
investment managers on how to
vote on those resolutions..
So rather than abstaining from
proxy votes involving social and
political issues, the University
could have much more of a voice as
a shareholder.
"We're not advocating for the
University to file proxy resolutions,
but advocating that they vote on
them," said Arthur Peterson, a grad-
uate student in the Ross School of
MAHANTI
From Page 1A
11 candidates out of the 35 they
interviewed, leaving some repre-
sentative positions open.
"These were the 11 that were
most qualified and most passion-
ate for student government," he
said. "And we didn't want to have
anybody else that we thought
might flake out or would not be
effective."
Mahanti said MVP is also try-
ing to involve more perspectives
fromstudents notinvolved in MSA
in its approach to student govern-
ment. MVP has been approaching
students directly to ask them what
their vision for MSA is, he said.
"We've gotten a lot of informa-
tion about where people stand on
the issues, and we've kind of cul-
tivated our platform around those
issues," Mahanti said. "And we
think that we can really deliver on
them later on."
In addition to being an MSA
representative, Mahanti has taken
part in Dance Marathon, MPow-
ered, Michigan Pops and was a site
leader for an Alternative Spring
Break trip.
STENVIG
From Page 1A
education to mean more acces-
sible education for all students, for
minority students, for immigrant
students and for poor and working
class students."
DAAP formed in 1997 in
response to the affirmative action
cases that were brought against
the University around the same
time. The party's website cites
the importance of maintaining a
diverse atmosphere.
"The current policies that
result in the exclusion of talented
minority, immigrant and poor and
working class students are not
only unjust, they are unviable and
harmful to the advancement of
society and human progress,"'the
website reads.
"We cannot allow so many of
America's most talented youth to
be excluded from our campuses
and denied an education because
they are black, Latina/o or poor,"
the website continues. "If we are
to advance as a society and solve
the vast problems facing human-
ity. We cannot simply afford to
throw away talent and potential."
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For Thursday, March 19, 2009
ARIES
(March 21to April 19)
You might be involved in something
secretive or very private today. You're
working behind the scenes or doing
something on your own. Whatever it is,
you'll get alot done!
TAURUS
(April 20 to May 20)
Your efforts in any kind of group
dynamic today will be successful. Enjoy
classes, conferences, conventions, meet-
ings or even casual get-togethers. You
rock!
GEMINI
(May 21 to June 20)
Your ambition is strong today. Don't
be afraid to go after what you want,
because you'll probably get it. You're
keen to make improvements somewhere.
CANCER
(June 21to July 22)
Today you can come up with better
ideas about travel or higher education.
You're keen to explore new avenues and
adventures, and now you can see a better
way to do it. Yay!
LEO
(July 23 to Aug. 22)
You want to do something to improve
yourself, especially with respect to how
you handle shared property, taxes, debt
and a lot of red-tape stuff. In other
words, you want to clean up your act.
VIRGO
(Aug. 23 to Sept. 22)
New approaches to collaborations or
partnerships with others are on your
mind today. You want to improve your
level of cooperation with others. And
vice versa.
LIBRA
(Sept. 23 to Oct. 22)
Your ideas about how to make
improvements at work are probably
excellent. Don't be afraid to suggest
something. Similarly, you might
improve your health today as well.
SCORPIO
(Oct. 23 to Nov. 21)
Sports, playful activities, social diver-
sions, show business and fun times with
children will delight you today. You've
got energy to burn, and you're looking
for a better way to do things.
SAGITTARIUS
(Nov. 22to Dec. 21)
You can accomplish a great deal at
home today. Renovations, home
improvements and family gatherings
will be productive and certainly worth
your efforts.
CAPRICORN
(Dec. 22to Jan. 19)
Your communication skills are hot
today. You can sell, market, teach, act
and persuade anyone to do anything.
Who could resist you?
AQUARIUS
(Jan. 20 to Feb. 18)
Trust your moneymaking ideas. You
also might have great cost-cutting sug-
gestions for your family or where you
work. (Let's hope others listen to you.)
PISCES
(Feb. 19to March 20)
You're prepared to work very eagerly
for your goals today. You've got the
energy, motivation and follow-through
necessary to do a great job. This is also a
good day for physical workouts or any
attempt to improve your body strength.
YOU BORN TODAY You're amaz-
ingly persevering, often to the point of
being a perfectionist. You work hard,
and you set high standards for yourself.
Personally, you have much charm and
grace. You have big visions, and you're
confident about making them a reality.
You're a hard-nosed, realistic dreamer.
Your year ahead is full of fun, social
activities and warm relationships.
Birthdate of: Wyatt Earp, 19th-century
gunfighter; James Redfield, author;
Bruce Willis, actor.
0
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0 2009King Features Syndicate, Inc.