Ratner Replies

Although I was the reporter who covered the Advisory Committee on Shareholder Responsibility's activities this spring, the ACSR did not receive a single mention in the article to which Smith refers. The ACSR's actions enter into Harvard's shareholder decisionmaking in only a peripheral way. Smith's statement that "the Harvard Corporation takes the ACSR very seriously and leans heavily on it for advice" is utterly ridiculous. To support this statement, Smith is forced to ignore some funamental facts about the composition and bias of the ACSR, as well as to mislead the reader in discussing the record of Harvard Corporation/ACSR agreement on shareholder resolutions.

It is particularly telling that Smith, the member of a group which is suppose to advise Harvard, feels obligated to defend Harvard's shareholding practices. His defense is simply indicative of the true nature of the relationship between the ACSR and Harvard. Smith writes that "unlike at Hampshire College, where students have not had any input into the investment or proxy decisions of the college, Harvard since 1972 has had a committee set up solely for this purpose, the ACSR." Both Smith and the Harvard Corporation may believe the ACSR mechanism legitimates Harvard's socially irresponsible shareholding activities, but they are wrong. When the Harvard Corporation concurs with the recommendation of the ACSR, it does not mean that they have accepted the ACSR's advice; it means only that there is an identity of views between two bodies composed of like-minded people. Smith sits on a committee, the large majority of whose members are faculty and alumni with business, economic management, or coporate law backgrounds, hardly a group representative of "the Harvard community."

Further, Smith is misleading when he writes "In only one instance out of 47 did Harvard totally break with the ACSR." In many instances, when ACSR did take a socially active position in support of a resolution, Harvard then abstained at the stockholders meeting, a move Smith considers a "half-way" disagreement with the advisory committee's recommendation. Financial experts from Federal Street to Wall Street generally agree that the difference between abstaining and voting against a shareholder resolution at a stockholders' meeting is largely a cosmetic one. In the counting of shareholder votes, all that matters is the percentage of "favor" votes out of the total stock issued; abstentions might just as well be votes against the resolution.

In addition to addressing our activism to socially-minded issues such as apartheid, we Harvard students might do well to consider another action next year: a boycott of the Advisory Committee on Shareholder Responsibility, until such time as a reform of the group enables it to be more than simply a mechanism for legitimating the shareholding actions of Harvard, which still essentially does whatever it damn well pleases, ACSR or no ACSR.