Yet it was but an empty show of freedom; these assemblies had no real power. Indeed, we have here a small-scale illustration of the way in which governments of a wholly despotic order can assimilate some of the features of the most thorough-paced democracy... --Tocqueville

(The Ancien Regime and the French Revolution)

Ask anyone who has served on the Advisory Committee on Shareholder Responsibility (ACSR) what his emotional response to the experience was and you're likely to get one answer: frustration.

Of course the frustration that plagues many of the ACSR's members is partly an unavoidable result of the Committee's normal business--moral debate. Put four students, four professors and four alumni together, ask them to discuss any controversial topic and you're bound to get a considerable number of inconclusive and wearying exchanges. But the major cause of the frustration felt by many members of the ACSR lies elsewhere.

It rests at 17 Quincy Street, headquarters of the Harvard Corporation. What makes serving on the ACSR not merely frustrating but nearly futile is the Corporation's shriveled moral sensibility. The Corporation treats issues of social responsibility not as pressing concerns to be vigorously pursued but as inconveniences to be disposed of with minimal effort. Thus whatever issue the ACSR considers, it knows beforehand that only a very narrow range of possible conclusions has any hope of gaining the Corporation's attention. The rest are almost certain to be rejected out of hand.

This spring the ACSR spent the bulk of its time debating the issue of Harvard's investments in companies with ties to South Africa. The Committee's deliberations and the Corporation's response to the outcome of those deliberations vividly illustrated the doubly frustrating character of the ACSR's activities.

In March, the Committee stumbled upon information that would spark the reinvigorated debate over South African investments this spring. One company in the Harvard portfolio, Carnation, received a failing rating for the third year in a row on the Sullivan Principles, a set of fair employment guidelines for American companies operating in South Africa. In looking into the Carnation matter, the ACSR decided to check up on the Sullivan ratings of all the companies in the portfolio. This review revealed that Harvard held shares in two companies which had not even signed the Sullivan Principles, let alone received unsatisfactory ratings.

The four student members, including myself, were outraged. We believed that the reasoning of the Corporation's 1978 policy statement precluded investments in such companies. The more moderate alumni and faculty members were dismayed as well at the apparent toothlessness of the Corporation's policy. And even the ACSR's conservative chairman, Business School professor Walter J. Salmon, thought something was amiss. In one of its rare moments of near unanimity, the ACSR decided to raise the issue with the Corporation.

The ACSR meets twice a year with a subcommittee of the Corporation called the Corporation Committee on Shareholder Responsibility (CCSR). On April 4, the entire ACSR joined the four-man CCSR for breakfast at the Faculty Club, expecting an hour and a half of ethical dialogue. What took place was closer to a briefing on Corporation policy. The discussion, as always, was extremely civil. The ACSR, through Professor Salmon, expressed its dissatisfaction with the Corporation's current policy. Hugh Calkins '45, the chairman of the CCSR, reiterated the Corporation's stance, and indicated that the Corporation's stance, and indicated that the Corporation wanted to avoid using ethical criteria in making investment decisions. Only after the Corporation had purchased shares in a company would it begin to take ethical issues into account.

As Mr. Calkins laid down the law I felt, and I suspect that many of my colleagues felt, that we had just been shown how limited our role really was. We were not advisers speaking to the Corporation members on an equal plane. Instead we were a collective bother that had to be tolerated so that we would fill the role of deflecting student criticism.

After the meeting with the CCSR, the ACSR's examination of the South African issue only became more urgent and far-reaching. The ACSR met every week between late February and the first week of May. At nearly every meeting the Committee would first dispose of the five to 10 shareholder resolutions to be voted on by the Corporation and then resume its ongoing discussion of investments in companies operating in South Africa.

In debates over the South African issue, the Committee often divided along the lines that split the group over many of the shareholder resolutions. The four student members and one professor formed something of a progressive block, tending to recommend votes against management on shareholder resolutions and to urge divestiture from all companies operating in South Africa. This group, joined by one or two liberal alumni, and aided by the absence of two or three conservative Committee members, often carried a majority of the Committee in favor of socially responsible shareholder resolutions. On the other side of many shareholder resolutions and supporting a more moderate South African policy stood the remaining three faculty members and one of the alumni. The last alumnus, who was the most recently appointed member of the Committee, provided a swing vote.

The divisions among the ACSR's members often displayed more complex and deep-rooted foundations than this simple liberal/conservative split suggests. The liberals on the ACSR seemed to share a healthy mistrust of the motives of large corporations and a belief in the primacy of moral considerations. The conservatives, in contrast, almost reflexively supported corporate objectives and seemed to view ethical concerns as just one among a number of equally weighty factors. But beyond these general points of agreement the individuals in each groups approached the issues with many different commitments and distinctive moral vocabularies.

The Divinity School student and the alumnus who was an Episcopal minister often spoke in emotional terms, referring frequently to human dignity and suffering. The other student members, including myself, tried to assume the voice of dispassionate reason--the attitude engrained in students who have taken moral reasoning courses--but our arguments no doubt were perceived as left-liberal moralism--the sloppy idealism of youth. Some of the conservative members of the Committee know only the language of cost-benefit analysis. In their strictly utilitarian calculations secure profits often weighed equally with considerations of simple justice. Other conservative members favored casting the issue in terms of revolution versus gradual change. Debates on the ACSR, then, often became fruitless clashes between incompatible moral jargons.

Some persuasion, however, did take place. After the meeting with the CCSR, the ACSR broadened the scope of its inquiry from the question of screening investments to the University's South Africa policy as a whole. As the Committee spent more time on the issue and examined more evidence, several members who had balked at the rigid use of the Sullivan Principles as the standard of corporate behavior and at the establishment of fixed limits on correspondence with the managements of delinquent companies accepted these positions. General divestiture became a viable topic for debate.