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Union to form endowment executive committee

Published: October 24, 2008
Section: Front Page


The Student Union is expected to announce the formation of a new executive committee next week that would serve as an advisory board to the university’s Office of Investment Management on issues of endowment and shareholder engagement.

The formation of the Committee for Endowment Ethics and Responsibility will come just two weeks after Brandeis received a failing grade for endowment transparency on its green report card, issued by the Sustainable Endowment Institute.

Class of 2011 senator Alex Melman said that CEER would provide Brandeis community members a jumping off point to start divestment campaigns or allow them to “ensure that we’re invested in a socially responsible way.”

Melman said that once students bring forth an issue to CEER, the committee will research the issue and then report their findings to Brandeis Chief Investment Officer Debby Kuenstner, who would then decide whether to bring the issue before the Board of Trustees, who would have to approve of any changes in the endowment’s investment.

The exact specifics of the committee’s operations are still under negotiations between Union President Jason Gray ’10 and Kuenstner, Gray said, due to the difficulty in balancing a compromise to involve students in endowment decisions without coming “at the expense of the university portfolio.”

“This is a give and take process,” he said, “but it will definitely increase community involvement in university decisions and give students a say.”

The formation of the committee was inspired, in part, by INVEST, a club dedicated to making Brandeis’ endowment transparent founded by Melman last year after he saw Brandeis’ F on endowment transparency on its 2007 green report card.

“My college education is paid for by the returns on the endowment, and I don’t want that money to be dirty money,” he explained, “and as a recipient of good from the endowment, I have a responsibility to make sure that the good isn’t coming from laxing moral values.”

Melman had hoped that the committee would increase student access to information about the university’s endowment with monthly meetings with Kuenstner. However, at present, Kuenstner has not agreed to monthly meetings.

One reason Kuenstner will not meet regularly with the committee is a lack of resources.

“The market is crazy right now, and we have a lot going on and not enough hours in the day to deal with it,” she said. “The endowment is getting smaller every day.”

She did say, however, that she would be willing to answer any questions the committee has “but if it’s just a question of are we invested in Chevron, that only requires a phone call.”

Kuenstner added that the university is not invested in Chevron or “anything that people might find offensive.”

“We don’t own the bad guys,” she said.

Additionally, Kuenstner said that her willingness to answer the committee’s questions about the endowment is nothing new, and that even before the formation of the committee, both she and the office of Investment Management had been willing to answer students’ questions.

“We divested from Sudan in 2006 and in 2008 because a student came forward and raised the issue with me,” she said, adding that “we’ve always been responsive to students, we just didn’t have the infrastructure and process.”

Even so, the annual endowment reports, along with the University’s Investment Policy Summaries and Investor Responsibility Policies are the only documents pertaining to the endowment available on the university’s website.

Melman said that he wished that Kuenstner would agree to publish a list of the university’s investments along with a record of how Brandeis proxies vote on shareholder issues, something that Harvard and Yale do.

The lack of a published list is something that Melman anticipates will pose a challenge to the committee despite the fact that Kuenstner has committed to answering any of CEER’s questions.

Melman said he hoped that once the committee is created and “proves to the administration it can be trusted, it will be given more access.”

Kuenstner said that she has no plans to put more detailed information about the endowment on the internet.

She also said she believed that the F Brandeis received for endowment transparency on the green report card was unwarranted given her department’s openness.

Kuenstner added that she believed that Brandeis’ overall grade of a B is unfair because three of the nine categories on which Brandeis was graded related to issues of endowment transparency, something that does not surprise her considering that the Sustainable Endowment Institute, which issued the report cards, is dedicated to green investment.

Mark Orlowski, founder and executive director of the Sustainable Endowments Institute, said that the Office of Investment Management’s willingness to answer questions when directly asked had not been “adequately communicated” on the survey Kuenstner filled out that was the basis of the grade.

Had she done so, Orlowski admitted, the grade probably would have risen from an F to a D.

Despite this misunderstanding, Orlowski is no stranger to Brandeis’ endowment policy. When Melman decided to start INVEST last year, he called Orlowski and asked him to speak at one of the club’s first meetings.

It was Orlowski who suggested that INVEST ask that a list of Brandeis’ investments and proxy votes on shareholder issues be published online.

While Melman said he was in contact with Orlowski throughout last year, he said he has not had contact with him this semester and therefore has yet to inform Orlowski of the committee’s formation.

Once the committee’s creation is formally announced, Melman said he would consider asking Orlowski to return to Brandeis to speak about the importance of endowment transparency and shareholder engagement to committee members.

The committee’s members will include three to five undergraduates and one graduate and one faculty member, Melman said. Applications for membership will be released with the announcement of the committee.

Melman said he is excited about the committee’s creation. “Where financial values are concerned, money talks,” he said. “Brandeis has been talking the social justice talk for a while; but we also have to make sure we walk the walk.”