Setting An Example

WHEN MEMBERS of the Corporation's Committee on Shareholder Responsibility voted two weeks ago for a shareholder resolution advocating restrictions on IBM sales to the South African government, a few optimists may have seen hints of change in the action. But the Corporation's statement on its IBM vote and its string of abstentions last week--on resolutions at Mobil, Atlantic Richfield, Exxon and Dow Chemical--quickly and effectively demonstrated that the Corporation continues to refuse to challenge the status quo.

The Advisory Committee on Shareholder Responsibility (ACSR) recommended these proposals unanimously, except in the case of the Mobil resolution on Chile--where a plurality voted for and only one member voted against the proposals.

When they cast their votes for the IBM resolution--which would discontinue the company's sale of computers to the South African government, except for humanitarian and medical purposes--Corporation members worded the endorsements so that they did not find fault with the company's actual policy. But IBM's board of directors did officially oppose the resolution, and they allow sales to several agencies that cannot be defined as either humanitarian or medically justifiable. Thus, the Corporation managed to pay lip service to the ACSR's approval of the measure while giving IBM's management a resounding pat on the back.

At Mobil, Corporation members claim that, although they agree in principle with the ACSR's recommendation in favor of the resolution to stop the company's sales to the South African military and police, it is too far-reaching and its wording did not effectively carry out its professed intent. Even if the Corporation, as it has said it will, sends a disapproving letter to management explaining its vote, the abstention at Mobil officially registers Harvard as having no opinion regarding the practice of a company that publicly justifies its continued bulk, long-term contracts with the South African military and police. The Corporation's objections in this case and in many past, similar situations, make no sense, given the realities of the corporate structures that allow resolutions from individual shareholders to be considered.

Whether he controls ten or 10 million shares, any stockholder in any company is free to express his opinions on the ever-growing number of shareholder resolutions that attempt to influence American industry's impact on the lives of American and other people throughout the world. Most such proposals are symbolic--their proponents know it; companies' boards of directors know it; and Harvard's Corporation members, with their financial and legal experience, know it as well as anyone. Harvard, with its name, prestige and considerable financial clout, has the power to make some of these resolutions more than empty gestures.


We continue to advocate total divestiture of all investments in banks lending money to the South African government or companies operating with or in South Africe. Meanwhile, in abstaining on measure like the one at Mobil, the Corporation chooses to hide behind a smokescreen of excuses, citing items of grammar or careless wording that supposedly render resolutions infeasible or impracticable. The Corporation purports to consider individual stockholder issues seriously, sticking to its policy of considering each one on an ad hoc basis. Since 1972, when it created the ACSR, the Corporation has delegated to that committee the gathering of facts and the interpreting of community opinion on various stockholder issues. But how can the ACSR's faculty, student and alumni members be expected to continue their time-consuming work diligently if the Corporation persists in ignoring their recommendations? If the Corporation expects anyone to believe it formed the ACSR in good faith, it must begin to maintain a consistent and sincere attitude toward the committee's suggestions; the Corporation must begin to acknowledge the spirit behind the ACSR's recommendations.

Harvard may not be able to change all of corporate America's minds. But no shareholder resolution will ever gain even a place as a footnote in some glossy annual report if shareholders with influence speak with moral conviction.