I am sure that the two finance professors whom President Bok appointed this year, being academically principled men, are aware of the school of thought which holds that an investment portfolio can be structured in such a way as to exclude certain companies on ethical grounds without harming investment return. However, I am not sure that either of-the professors subscribes to this school of thought. I know that the two alumni who work in the financial world do not subscribe to this belief.

DIFFICULTY

In fact, one of these alumni works for an investment consulting firm, Scudder, which in at least one instance in the past had difficulty complying with clients' demands that it construct a South Africa-free portfolio for them. The case of Michigan State University is instructive. In 1978, the Board of Trustees of Michigan State, who are elected by the state's voters, decided to clear the University's portfolio of South Africa-related stocks. The Trustees instructed the University's portfolio manager, Scudder, to divest. However, Scudder reportedly had difficulty abiding by the South Africa-free guidelines, either because of ingrained resistance or unfamiliarity with the approach to investing.

In 1982, the Michigan State trustee, partially because of Scudder's inability to cope successfully with the university. South Africa policy, decided to change portfolio manager. Michigan State's three new portfolio, management firms completed the divestiture action. By taking advantage of marks conditions, Michigan State made 51 million by divesting.

Dr. Marcy Muringhan, president of the Social Investment Services Division of the Mitchell, Investment Management Co. in Cambridge, reports that many large investment management firms have trouble advertising to socially responsible investment criteria because they are philosophically atuned only to the conservative approach of investing in companies regardless of the ethical character of these companies activities.

BALANCED ADVICE

Given the dilemma in which Scudder may have found itself following the Michigan State directive, we can see how President Bok may not receive the full range of advice regarding the financial attractiveness of the various options on divestiture from this year's ACSR, at least as far as the alumni financial experts are concerned. However, President Bok should know that there are Harvard alumni ae with strong backgrounds in finance who believe firmly that divestiture would not have to harm the University portfolio's standing.

It is extremely important that if President Bok asks his advisory panel for estimates of the financial cost of divestiture, the panel give him the comprehensive and balanced advice he deserves. The financial side of any South Africa investment policy lies at the heart of many people's views regarding the appropriate approach for the University to take towards its investments.

Last year's ACSR conducted some preliminary research into this question of financial cost. Many members of the Committee concluded that previous estimates that Harvard would lose millions of dollars by divesting were very excessive and have been refuted by the recent divestiture experiences of other institutions.

SUMMING UP

Taken individually, any of the oversights, irregularities, and appointment selection I have touched upon would not be cause for much alarm. But taken together, these inconsistencies belie a certain lack of commitment to maintain the integrity and good reputation of the ACSR, and make it imperative that we reexamine the ACSR's purpose and role.

Where, then, does the ACSR fit in: as a fully representative body whose judgement fairly reflects the views of the entire Harvard community, or as a shield to prevent the seven members of the Corporation from facing up to the hard questions on divestiture being posed today by so many diverse elements of Harvard society?

If the Committee fits in somewhere between these two extremes, is this acceptable? Do students wish to continue being associated with a University committee if their voice on the Committee is possibly being misconstrued and misrepresented because the guidelines insuring the Committee's fairness and usefulness are being overlooked?

In light of the concerns raised in this analysis, I believe that undergraduates have the right to ask President Bok for certain clarifications and reforms in the ACSR charter in order to reinvigorate the Advisory Committee's good reputation. First, we must be assured that the central University Administration will follow the letter of the guidelines governing ACSR membership as closely as possible and that the Administration will monitor the deans to make sure that they are following the correct procedures in selecting student and faculty nominees.

Second, we must ask for revisions in the way all ACSR nominees are selected. ACSR openings, along with a description of the Committee, must be publicized through posters and advertisements in student, faculty and alumni newsletters, and through student government, faculty and alumni meetings. We should see that this requirement to publicize Committee openings is included in the criteria regulating alumni selection, if these criteria do in fact exist.