Last year, I served as the undergraduate representative to the Advisors Committee on Shareholder Responsibility (ACSR), a 12-member body composed equally of students, faculty, and alumni I had conducted some preliminary research of my own and supported the position that Harvard should divest from companies operating in the Republic of South Africa.

Membership on the ACSR not only afforded the opportunity to learn about the South Africa question and other ethical matters of relevance to the University as a stockholder, but also a chance to gain insight into the ways in which an influential institution reacts to an emotionally charged issue that poses a challenge to the very world view of the institution's chief officers. I am speaking of the dilemma that the seven Harvard Corporation members face in deciding how to handle the University's investments in companies doing business in South Africa.

Over the course of the year, the Committee spent roughly half of its time discussing the resolutions that Harvard receives as a shareholder in some 200 companies and making recommendations as to how Harvard should cast its vote.

For the remainder of our meeting time, we tried to inform ourselves about various aspects of the South Africa issue. We looked into the social, economic, and political conditions in South Africa, the history of the ACSR's recommendations regarding South Africa-related stock and the Harvard Corporation's actions in response: the philosophical questions concerning both the proper role of the University as an ethical actor in society and the part foreign companies play in sustaining or changing apartheid: and the financial implications for the University of whatever policy it should choose to adopt in the future.

PUPPET:

The Committee met in private about 15 times from December to May in the comfortable surroundings of the Faculty Club. Fairly early in our consideration of the South African question, we decided to hold an open hearing in order to receive input from those members of the Harvard community who wished to express their views on the University's South Africa investment policy. Several Committee members came away from this hearing convinced that a sizable portion of the student population is deeply concerned about this issue.

Part of the reason for this conviction is that the ACSR was roundly lambasted by several of the speakers for being a puppet of the Harvard Corporation. These student and alumni spokesmen asserted that the ACSR serves as a lighting rod to deflect criticism and protest from the real policy makers, the seven members of the Harvard Corporation, whom the ACSR is supposed to advise. These speakers contended further that the Corporation then proceeds to ignore practical: all of the ACSR's counsel regarding South Africa policy. One student went so far as to say that when examined in historical perspective, the ACSR is "more than a sham. It is a mockery of a sham.

While I did not at the time and do not non-subscribe to the view that the ACSR is a puppet group. I believe that because of certain faults in the guidelines governing Committee members' selection and because of the nonuniform way in which these guidelines have been implemented, the Committee representativeness and integrity must be called into question.

PURPOSE

The Advisory Committee on Shareholder Responsibility was established in 1972 by President Bok to advise the Harvard Corporation "concerning the social and ethical implications of the choices it must make as a major shareholder in many companies," according to the University. The creation of the Committee constituted a formal recognition of the fact that in certain circumstances, considerations of good citizenship on the University's part supersede economic calculation.

With the rise in the 1970s of shareholder resolutions as a way to try to influence corporate policy, the ACSR spent its early years giving advice on how Harvard should cast its proxy votes.

Last year the 41 proposals we dealt with covered a wide range of corporate activity, from a call on Emerson Electric to adopt ethical criteria for accepting military contracts: to a demand that Merck & Co. cease making contributrions to charitable organizations and non-profit institutions: to an appeal to Standard Oil of California. Baxter Travenol, Texaco, and Xerox to abide by minimal standard of ethical conduct in their South African operations or withdraw from that country.

CONSENSUS

The 12 members of the ACSR had little difficulty agreeing what to advise the Harvard Corporation on most of the resolutions we examined. Twenty-five of the proxy recommendations we made went to the Corporation without a single dissenting vote. Of the remaining proxy votes we took, the number of dissenting opinions was small, usually less than three.

The Corporation had no objection to casting its shareholder ballots in the same way as the ACSR had advised for 12 of the 41 resolutions we considered Last year, the ACSR changed the Corporation's preconceived view on a proxy issue only once. This occurred when we persuaded the Corporation to extend criteria it had adopted for voting on resolutions dealing with nuclear weapons-production in order to embrace resolutions addressing more general military contracts under the same criteria.