Harvard Votes With GM Management

The Harvard Corporation played Round Two the way it played Round One as it voted with management yesterday in the second annual Campaign GM proxy battle.

The Corporation voted against the first two Campaign GM resolutions and abstained on the third. However, as the Austin Committee noted in its report last March, "It is a truism in the financial world that abstention in a proxy contest is a vote for management,"

Harvard also opposed the resolution sponsored by the Missionary Society of the Protestant Episcopal Church that called for GM to end its operations in the Republic of South Africa.

Last year, Harvard opposed the two resolutions that Campaign GM introduced on the GM proxy statement.

Harvard owns 288,160 GM shares worth $17,901,940.

Campaign GM proposed three resolutions this year.

Proposal One would permit 100 stockholders or the owners of 1500 shares to nominate by petition a candidate for the Board of Directors. A maximum of 30 candidates could be nominated by this process, and their names and 100-word platforms would be listed on the proxy statement alongside the management slate.

Proposal Two would allow the constituent groups of employees, consumers and dealers each to nominate a candidate for the Board.

Proposal Three would require General Motors to publish specific data on its policies regarding auto safety, minority hiring and pollution control.

The official votes will be recorded Friday at the GM annual meeting in Detroit.

In a statement released after yesterday's meeting, President Pusey explained the Corporation's reasons for its decision.

Although the Corporation favors "the principle of having a nomination process which will insure obtaining the best qualified individuals as corporate directors," it voted against Proposal One because it felt the suggested mechanism would be "cumbersome and unrealistic," Pusey said.

Responding to the Corporation statement, Philip W. Moore '64, Executive Director of the Project on Corporate Responsibility-the group of Washington lawyers behind Campaign GM-said yesterday, "Most of us who drafted the proposals are Harvard graduates, and the first pro-posal is modeled almost exactly on the way Harvard chooses its Overseers. Is that 'cumbersome' and 'unrealistic'?"

The Association of Harvard Alumni nominates an official slate of candidates for the Board of Overseers, and any group of 25 alumni can nominate by petition another candidate for the Board. Biographies of all candidates are printed on the ballots, but the nominees are not permitted to submit policy statements.

George F. Bennett '33, Treasurer of Harvard College, said that while he was not familiar with the Overseer election procedures, he thought that lengthy proxy statements, as Proposal One could create, would be too bulky.

"Furthermore," Bennett continued, "A well-run operation is a team operation. A corporation is not a political body. The Overseers are in a sense a political body, in that they are elected. They don't have to be homogeneous."

"The proposal would tend to introduce dissident elements into what is a smooth-running operation," Bennett added. "I think the system they recommended is ridiculous."

In his statement, Pusey said the Corporation voted against Proposal Two because they objected to "restructuring the boards of publicly held corporations along the lines of assemblies whose members represent different types of constituencies."

With its abstention on Proposal Three, Pusey said, the Corporation expressed its "endorsement in principle and doubts as to detail" of Campaign GM's demand that General Motors disclose information on "matters of public concern."

Commenting on the abstention, Michael A. Levett, Loeb Fellow in Advanced Environmental Studies and a coordinator of Campaign GM at Harvard, said, "They're supporting us in principle and Campaign GM in fact. Some day someone is going to convince Harvard that if they believe in something in principle they should do it in fact."

Responding to the objections on "detail," Moore said, "Will Harvard next year help us draft a proposal and introduce a nomination? While they criticize our methods, they never come forward with others."

"Basic figures don't always tell the story," Bennett said, explaining why he opposed the third resolution. "The corporation is already publishing all the information required by law, and more."

"It's a question of having confidence in a management with which one has worked over the years," Bennett said. "You either have confidence in people or you don't."

Bennett said the Corporation objected in particular to the part of the proposal which would have required management to attach the information in question to the annual shareholders' report.

On the South Africa resolution, Pusey said the Corporation would have voted affirmative "if we had thought it would make a significant contribution to the elimination of apartheid in the Republic of South Africa; but since we had no information it would, and since it seems certain it would work hardship on the employees affected, we decided to oppose this proposal."

Bennett said that GM had created jobs for blacks as well as for whites in South Africa. "For GM to shut down would put a lot of blacks out of work," he said.

Although Bennett agreed that blacks generally occupy more menial positions than whites in South Africa, he said, "If you were a black down there, would you rather have no job or a job not as good as a white man's?"

Bennett said he did not think that a pullout by GM would help topple South Africa's apartheid rule.