Transparency crucial to conflict-free Duke

The time has come for the University to elucidate its investment process and establish its commitment to ethically responsible investing. Since last October’s debacle, when the Coalition for a Conflict-Free Duke was barred from bringing awareness to the issue of investment responsibility during Countdown to Craziness, the CCFD has implemented a more savvy approach in prompting the University toward this goal.

Their petition, which is currently under deliberation in the advisory committee of investment responsibility of the Academic Council, calls for the University to demand proxy voting rights for shareholder resolutions encouraging movement away from the use of conflict minerals within companies in which the University invests. Conflict minerals are mined from countries such as the Democratic Republic of Congo, a region that still has not recovered from civil war, and are used to directly finance warring factions that commit egregious crimes. Because many technology companies do not exercise oversight regarding the sourcing of their materials, these minerals turn up in consumer products.

In order for the Board of Trustees to approve any proposal regarding control of investment practices, it must pass through two committees: the president’s special committee on investment responsibility and ACIR. After passing the PSC unanimously approved CCFD’s petition Jan.13, the request has yet to pass through ACIR, as the committee has recently entered its three-week deliberation process.

The CCFD’s endeavor highlights problems with the University’s handling of investment responsibility. It is unclear why there must be two bodies in place to consider proposals thoughtfully before presentation to the Board of Trustees—the only body in the long list with real decision-making power. A single committee that answers to students, faculty and the Board of Trustees may be more effective. Moreover, it is regrettable that ACIR convenes on an ad hoc basis, which just adds to the elbow grease necessary to pass a proposal.

Perhaps what is most concerning about our institution’s investments is that even administrators may be in the dark about where some of the endowment money is being thrown. Currently, the Duke Management Company (DUMAC) manages Duke’s endowment and, although it does not disclose its asset allocation, it likely invests in funds that themselves do not disclose their assets and equities. This means enforcement of the CCFD proposal is doubly handicapped: Students cannot enforce against DUMAC because it is opaque, and DUMAC cannot enforce against its own opaque investments.

The impetus is on the University to hold our managing partners accountable as much as possible. While it is unrealistic to call for divestment from the technological companies that use conflict minerals, Duke has a lot of power in demanding that the procurement policies of these corporations are in line with socially responsible principles. After all, there are no foreseeable financial ramifications of simply supporting resolutions among shareholders for companies to oversee their source chain.

The University’s compliance with the CCFD’s proposal would be largely symbolic. This is a vital first step in changing Duke’s investment practices. Duke now needs a commitment to greater transparency regarding our financial holdings. We hope that ACIR will pass the Coalition for a Conflict-Free Duke’s resolution and bring it to the Board of Trustees. And we hope that Duke students will take a stand and produce a coherent response in support for this proposal at ACIR’s public hearing Wednesday