Board of Regents

Advisory Committee on Socially Responsible Investing

This advisory committee is established and governed by the Board’s Standing Orders, which describe the process of receiving and evaluating proposals to divest and the committee’s role in the procedure. The webform for submissions reflects the Board’s guidelines. Please read the following full text of the Board’s Standing Orders, Chapter 4, Section 1.G, closely before preparing your submission:

The Board of Regents is vested by statute with responsibility to manage the investment portfolios of the University of Washington. Decisions regarding the investment portfolios are geared towards maximizing the resources of the University in support of its primary teaching and research mission. The Board is ever mindful of the endowment as a fund established through private gifts which support donor-specified programs today and in the future.

Ethical considerations have led the Board, from time to time, to engage the University in shareholder activism or divestment. Such occurrences are rare. Divestment means the sale of specific companies and/or market sectors from the investment portfolio for financial, ethical, or political reasons. The process involves ongoing portfolio screening and monitoring to ensure compliance. The fiduciary duty of the Board ensures a strong presumption against divestment. Divestment is considered only after all options to address the ethical concern have been reviewed and found unsatisfactory.

In making any determination, the Regents recognize the need for a clear process that allows for University community input, evaluation and articulated criteria to inform the Board in its decision making. No process or set of criteria, however, can be expected to address all situations that might arise. The Board reserves the right to interpret these provisions as broadly or narrowly as it sees fit, consistent with the policies of the University and applicable external laws and regulations.

The Board hereby establishes the Advisory Committee on Socially Responsible Investing (ACSRI) with the following principles to receive and to evaluate proposals for divestment.

1)   ACSRI Responsibilities

An ACSRI is convened to advise the Board or its appropriate standing committee on the social and ethical aspects of issues related to socially responsible investing, including:

  • Proposals to divest submitted by members of the University community which meet the criteria specified in the Divestment Guideline.
  • Shareholder engagement (letter writing campaigns, proxy voting, sponsorship of shareholder resolutions, etc.).
  • Other matters, as requested by the Board.

The evaluation will be conducted in a timeframe that is appropriate to the issue being evaluated and is not limited by the academic year.

Upon request by the Board, the ACSRI will review prior approved Board actions related to socially responsible investing for their continuing appropriateness.

2)   Membership and Terms

The ACSRI will consist of no more than eight voting members with consideration given to tri-campus representation. Member selection will be made in the following numbers and from the following groups:

  • Two faculty members;
  • Two students;
  • Two members closely affiliated with the University, such as staff, alumni, or donors; and
  • Two members external to the University.

Two ex officio, non-voting senior staff members from the Board Office and the Office of the President will serve on ACSRI, providing contextual guidance and management and administrative support.

The ACSRI Chair and members will be recommended by the Governance Committee and approved by the Board after consultation with the University President or his or her designee. The personnel convened to evaluate a proposal or proposals to divest shall sit until the evaluation is complete. Committee members sit at the Board’s pleasure, and may be removed at any time.

3)   Meetings

ACSRI meetings will be held during the academic year (from October through May) and shall be convened by the Board Office, when the Governance Committee deems a proposal worthy of consideration. ACSRI meetings are open only to ACSRI members and invited guests.

4)   Criteria for Evaluating Proposals to Divest

The Board will only consider recommendations to divest its endowment of direct holdings in publicly held companies if they have been vetted by the ACSRI and which meet the following criteria:

a)   The actions or inactions of the company or companies are deemed “morally reprehensible,” and:

  • The divestiture will likely have a meaningful impact toward correcting the specified social harm and will not result in disproportionate, offsetting societal consequences; or
  • The company contributes to harm so grave that it would be inconsistent with the goals and principles of the University.

b)   Divestment is seen to be more viable and appropriate than ongoing shareholder engagement.

c)   The requested action is not likely to impair the University’s capacity to carry out its educational mission (for example, by causing deep divisions within the University community).

d)   There is a broad and continuing base of support within the University community including students, faculty, alumni, and staff who believe that action is warranted. Evidence of support may include the following:

  • Endorsement from the Associated Students of the University of Washington (ASUW);
  • Endorsement from the Graduate and Professional Student Senate (GPSS);
  • Endorsement from the Faculty Senate;
  • Endorsements from the Associated Students of the University of Washington, Bothell and the Associated Students of the University of Washington, Tacoma;
  • General petitions signed by students, faculty, alumni, and staff of the University; and
  • Endorsements from Registered Student Organizations (RSOs).

e)   A specific company or list of companies based on measurable industry criteria may be targeted for divestiture. If the divestiture is implemented, the University will appoint a third-party provider to identify targeted companies, and conduct ongoing monitoring and research on the targeted companies.

For activities believed to cause social harm but not on the level of moral reprehensibility, The Board may consider avenues other than divestiture such as shareholder engagement. In such instances, the criteria provided here in Sections 4.C and 4.D must be met. Educational initiatives, sustainability initiatives, or targeted research may also be pursued but those activities are outside the scope of this guideline.

5)   Procedure and Voting

Sponsors of a divestment proposal will submit a request for review by the Advisory Committee on Socially Responsible Investing (ACSRI) to the Board Office.

The Governance Committee, on the advice of the Board Office and the Office of the President, will review the proposal to ensure that it meets the criteria specified in Section 4 for consideration. If the proposal is judged to meet the criteria in Section 4, the ACSRI will be convened.

The sponsors will present their proposal to the ACSRI for review and answer questions. The ACSRI may decide to bring in experts to provide additional information and education to committee members. The ACSRI will focus solely on the social and ethical aspects of the proposal.

A two-thirds vote (six voting members) is required to move a recommendation forward to the Board. If there are insufficient members present to meet the quorum when the vote is taken, votes may be taken by email to the ACSRI Chair. All recommendations and reports shall include a summary of minority viewpoints of ACSRI members.

The ACSRI may:

a)   Deny the proposal;

b)   Recommend that the Board consider the divestment proposal; or

c)   Recommend that the Board consider shareholder engagement.

Sponsors may elect to resubmit the proposal (revised or not) for future consideration.

6)   Recommendations to the Board

Recommendations for Board consideration from the ACSRI will be submitted to the Office of the Board of Regents and to the Office of the President.

The ACSRI Chair and other ACSRI members as appropriate, along with the sponsors of the original divestment proposal, will present proposals to the Board and answer questions.

To satisfy its fiduciary duty, the Board will request that the Finance Office provide an in-depth analysis of the financial impact of the recommended divestment on the endowment. The UWINCO Board may be asked to provide its perspective on the financial impact on the endowment.

The divestment proposal will initially be reviewed by the Board, or its appropriate subcommittee, as an information item. The sponsors of the proposal will be available to present information and answer questions.

If the Board is prepared to act, it will request that the sponsors work with the Finance Office to prepare an action item for an upcoming meeting of the Board. If a divestment action is approved by the Board, then the Statements of Investment Policy and Objectives for the Consolidated Endowment Fund and Invested Funds will be amended. The Finance Office will prepare a divestment implementation timeline

7)   Reporting

Requests for action submitted to ACSRI will be posted on the ACSRI website. Final disposition of each request submitted will also be published on the website.

Decisions of the ACSRI to deny a divestment proposal will be communicated to the Office of the Board of Regents and to the Office of the President.

8)   Staff Support

The Board Office and the Office of the President will:

a)   Manage the ACSRI member selection process;

b)   Provide administrative support to the ACSRI including scheduling meetings, managing member communication, and maintaining the ACSRI website; and

c)   Work with the ACSRI Chair to develop ACSRI agendas, conduct research including the identification of outside experts, maintain meeting minutes, and provide other management support as requested.