The Harvard Management Company should reevaluate its relationship with HEI
HEI Hotels and Resorts, owner and operator of dozens of hotels across the country, has faced several protracted labor disputes over the last few years—some are settled, many others remain ongoing. Due to concerns about labor rights, Brown University’s Advisory Committee on Corporate Responsibility in Investment Policies prominently announced its decision to halt investment in HEI last year. University of Pennsylvania later followed suit, claiming that it had “no plans to make future investments in HEI-sponsored funds.” Earlier this week, Yale opted against reinvestment as well, albeit for “purely portfolio reasons.” To many, especially those in the labor movement, these declarations represent the long-overdue public condemnation of a company that engages in anti-union practices and creates sweatshop-like workplaces.
In light of the controversy surrounding HEI’s treatment of its workers, Harvard’s administration should consider halting further investment in HEI. This is especially true if current allegations of labor rights abuses are substantiated. On a broader level, the Harvard Management Company must address the glaring lack of transparency regarding its investment portfolio.
To this end, the administration should publicly disclose the contents of its endowment. Current state laws exempt Harvard by name from disclosure; this unacceptable technicality undermines any sense of corporate social responsibility. A non-transparent endowment denies access to information related to Harvard’s portfolio to not only the public, but also the Harvard community. This almost offensive level of opacity, coupled with Harvard Corporation Chair Robert D. Reischauer’s ’63 admission that students would likely take issue with many of HMC’s portfolio items were they disclosed, runs contrary to Harvard’s values.
Presently, the HMC has not disclosed any mechanism to review the ethics of the companies that comprise its portfolio. Despite the presence of an Advisory Committee on Shareholder Responsibility and a Corporation Committee on Shareholder Responsibility, we still do not know of any internal committee that exists to review the social impact of investing in the undisclosed assets in Harvard’s portfolio. The administration should establish a body with this purpose if it does not exist already.
Harvard has a rare opportunity to affirm its commitment to social responsibility. It goes without saying that an institution like Harvard leads by example. University officials that speak of public service and social good are remiss if they openly refuse to practice what they preach. Therefore, Harvard should show that its regard for social responsibility goes beyond adding courses or hiring administrators by voting with its wallet, and at least pledging to review the ethical practices of firms in which it invests.
On a final note, insofar that Harvard does reevaluate its relationship with HEI, any investment decision should not be made because of the visibility of Occupy Harvard. A decision or declination to reinvest should instead be the product of a review process that fairly and empirically evaluates the facts surrounding a case, not a desire to relieve public tension; to do otherwise undercuts institutional legitimacy and makes public sentiment the only litmus test for administrative action. Ultimately, HMC should have the capability and conviction to find HEI responsible for unethical practices whether there are ten tents in the Yard or ten thousand.