Skip to main content

Duke Trustees Approve Review Process to Implement Socially Responsible Investing Policy

The trustees adopted the guidelines and procedures in response to recent requests from Duke students that the university divest from companies doing business in Sudan, Israel or other countries

The Duke University Board of Trustees on Oct. 2 approved a measure creating two committees to review concerns from Duke community members about the social responsibility of university investments.

Their action provides a process for pursuing the guidelines on socially responsible investing that the trustees approved in February 2004, which are available online. The guidelines said the "primary fiduciary responsibility" of the trustees is to produce a favorable financial return on Duke's resources and thereby produce the funds needed to support the university's activities. Before considering a symbolic financial action, therefore, the trustees will expect the university community to engage in "substantive discourse" on an issue, and to express "broad concern that substantial social injury is being caused."

"As we noted when we adopted the guidelines earlier this year, the trustees and senior leadership of the university have wanted to clarify how Duke will handle the complex ethical issues and financial concerns that arise around issues involving socially responsible investing," said Peter M. Nicholas, chair of the University's trustees. "We've now taken the next step and explained how these new guidelines will work in practice."

The trustees adopted the guidelines and procedures in response to recent requests from Duke students that the university divest from companies doing business in Sudan, Israel or other countries. From 1986 to 1994, Duke divested from companies doing business in South Africa, to oppose that country's apartheid system, but campus interest in divestment issues faded in subsequent years.

Duke President Richard H. Brodhead recently reaffirmed a decision made by his predecessor, Nannerl O. Keohane, not to divest from Israel. "Divestment from Israel is an extraordinarily blunt weapon to address an issue of extreme complexity," he said. "It would be used only as a last resort where there was very significant, enduring consensus within this country. There's nothing to suggest that exists."

Under the new procedures approved by the trustees, recommendations for socially responsible investing from the Duke community will first be reviewed by the President's Special Committee on Investment Responsibility (PSC). This group will be composed of the provost and the executive vice president (or their delegates); the dean of one of the professional schools; the chair of ECAC or a faculty member designated by ECAC; and a young trustee designated by the board. The chair will be appointed by the president.

If this first committee deems that a corporation in which Duke invests is causing "substantial social injury" and a "change in the company's activities could have a direct and material effect in alleviating such injury," it will recommend that a second committee review the matter in greater depth.

The second committee, the Advisory Committee on Investment Responsibility (ACIR), can then recommend a course of action to the president, such as voting a certain way on a shareholder resolution, proposing a shareholder resolution, writing to the management of a company or divesting from a company. The president's recommendation then goes to the trustees for action.

ACIR will have nine voting members: one undergraduate and one graduate or professional student elected respectively by the Duke student government and graduate and professional student council; one alumnus elected by the Duke University alumni association; two faculty members elected by the academic council; the university counsel or his or her delegate; the deputy treasurer or his or her delegate; and two administrative appointees chosen by the president. The members will be appointed for at least two years and may be reappointed, serving until their successors take office. The president will appoint the chair from among the voting members.

In other business, the Board of Trustees:

-- on Friday authorized about $4 million in renovations to the Nanaline H. Duke Building on Research Drive.

Constructed in 1968, the building is home to several science departments. The project calls for replacing the building's roof and its heating, ventilation and air conditioning systems, as well as installing a new sprinkler system and upgrading the electrical system.

-- approved the naming of several facilities and spaces. This includes naming one of the buildings in the Center for Interdisciplinary Engineering, Medicine and Applied Science (CIEMAS) complex the Michael J. and Patricia W. Fitzpatrick Building. The Fitzpatricks are Duke graduates who have committed almost $40 million to Duke to pursue basic research in photonics and to create an optical engineering program.

A second CIEMAS building will be named the Jeffrey N. Vinik Building, in honor of the 1981 Duke engineering graduate who has committed almost $7 million toward the advancement of engineering at Duke.

-- changed the frequency by which the graduate and professional student young trustee is elected.

A new graduate and professional student young trustee will be elected every year, instead of every three years. This young trustee will serve one year as a non-voting observer and a second year as a voting member. The change will be phased in over the next two years.