On May 20, the Advisory Committee on Investor Responsibility unanimously voted against advancing the divestment proposal by Dartmouth Divest for Palestine to the Board of Trustees. The proposal did not satisfy their five criteria for “completeness,” which determine whether it moves forward to the president and the Board of Trustees.
To be clear, the Editorial Board will not take a stance today on the divestment proposal or ACIR’s application of their criteria to the proposal. However, this recent event prompted our own review of ACIR’s criteria — which is being tested for the first time since their adoption in 2013 — for what a proposal must contain to advance to the Board of Trustees.
ACIR’s five criteria are:
- A company’s actions or inactions are clearly inconsistent with Dartmouth's history, its values or mission.
- All practicable shareholder rights have been exhausted in seeking to modify the company’s behavior, or it has been determined that pursuing such rights would likely be futile; and, the company has been afforded the maximum reasonable opportunity to alter its behavior and failed to do so in a manner that materially reduces such injury.
- Divestment will make a material impact on correcting the company's injurious behavior.
- Divestment will not compromise Dartmouth’s ability to address the target issue through its academic work and other channels.
- The proposal must describe in writing, with appropriate documentation, concrete and detailed evidence of how the Dartmouth community, including students, faculty, staff and alumni, has come to consensus to support the proposal.
Considering ACIR’s important role in the divestment process, it is critical that their criteria be well-calibrated — and some of them are.
Criteria one, two and four are reasonable and should be met by a thorough proposal. In accordance with criteria one, we firmly believe that Dartmouth’s investments should reflect its institutional values. We also agree, in line with criteria two and four, that if the College is in a position to directly change a corporation’s injurious behavior, it should use that leverage to effect change instead of symbolically divesting.
However, criteria three and five are unreasonable.
Criterion three — which requires divestment to make an “impact” on company behavior — misconstrues the purpose of divestment. The impetus for divestment comes from the College’s ethical responsibilities as an institution of higher education. Even ACIR’s first criterion states that Dartmouth’s values should be the motivation for divestment.
Consider a thought experiment in which you, the reader, occasionally invest $5 in a company. You find out that the company profits from a practice you vehemently oppose. If you adhered to criterion three, you would continue to invest because $5 is a drop in the bucket, and certainly not enough leverage to sway the direction of the company. We find this to be highly irrational. Ethically, you should stop investing because you believe your money should not be in their pockets.
Criterion five — requiring community consensus — makes any divestment next to impossible. Divestment will never be noncontroversial. Every major social movement in U.S history from women’s suffrage to civil rights has met fierce opposition. The consensus requirement makes divestment contingent on popular opinion rather than the College’s ethical and institutional responsibilities.
Yet under the current criteria, it is hard to imagine successful divestments from Dartmouth’s past meeting ACIR’s criteria. For example, a proposal for divestment from corporations that invested in South Africa in the 1980s would not have found consensus on Dartmouth’s campus — at the time, opponents took sledgehammers to shantytowns built by anti-Apartheid protesters.
Once again, we are not taking a position on the current divestment proposal. Nor are we taking a stance on ACIR’s rejection — they applied their criteria as given. But ACIR’s current process is not conducive to a fair adjudication, regardless of the divestment target.
On principle, any proposal that demonstrates investments that are inconsistent with Dartmouth’s mission merits review from the Board of Trustees.
The editorial board consists of opinion staff columnists, the opinion editors, the executive editors and the editor-in-chief.
