Committee Advising Trustees On Investments May Disband

A Cornell student who is a member of the Investment Proxy Advisory Committee (IPAC), which advises the university trustee Investment Committee, has suggested that the Student Assembly refuse to appoint more students to IPAC.

In a report by Steve Beede, Cornell class of 1983, he states, "I believe that IPAC should be seen for what it is; a powerless agency created to give the appearance that Cornell considers social and political issues when making investment decisions."

IPAC was set up in the spring of 1978 in response to demonstrations the previous spring during which students protested Cornell's investment in companies with subsidiaries in South Africa. The Cornell Daily Sun, the campus newspaper, reported this week.

The purpose of IPAC is to advise the trustees on interests in companies that do business in South Africa as well as to offer an opinion on how Cornell should vote on shareholder proxy resolutions. A total of eight people associated with the university--two each from alumni faculty students and staff--compose the committee

Resignations

The two IPAC faculty representatives for last year. Richard Rosecrance, Walter Carpenter Professor of Comparative Government and Politics, and Randolf Barker, professor of agricultural economics, resigned by the end of last semester, at the same time that Beede was calling for dissolution of IPAC.

Xerox Proxy

The event that caused several committee members to question the value of IPAC was the rejection by the trustee Investment Committee of a recommendation by IPAC to vote against management on a Xerox shareholder's resolution. The resolution called for Xerox to stop selling arms to the South African government as well as to stop further investment by Xerox in South Africa.

The trustee Investment Committee did not give IPAC any reason for rejecting the advisory committee's resolution, Beede said.

In Rosecrance's letter of resignation, he stated. "In voting against the Xerox proxy resolution [that is, voting for management] the Investment Committee in effect voted in favor of an expansion of corporate investment and the inauguration of another Xerox product line in South Africa. In this it which IPAC has worked nearly three years to establish...I believe that IPAC should be abolished."

Barker's reasons for resigning were slightly different: in his letter of resignation he wrote, "I have reached the conclusion that the voting of proxies is not an effective way to communicate concerns about these issues to the corporation in question."

Nothing Better

Another IPAC member, Dominance Versage, a radiation life safety officer, opposes the move to disband IPAC. "My belief is that there has to be some forum where we can review these issues. If they come up with some other mechanism, then that's fine, but for now I'm in favor of continuing IPAC."

Corporations Care

Versage added that corporations are concerned with how Cornell might vote on a proxy resolution. For example, on one occasion, two Mobile representatives spent an entire morning explaining management's position to IPAC, Versage said.

Nevertheless, Versage said that if the Investment Committee did not go along with the recommendations in the third-year evaluation, then he would be forced to admit that IPAC could no longer function effectively

Two for Nine

In spite of the Investment Committee decisions to disregard IPAC's recommendations concerning how Cornell should vote on seven of the nine social issues proxies IPAC dealt with last year, the members of IPAC issued a very optimistic third year evaluation at the end of last spring.

In the evaluation, IPAC members said that "despite the difficulties and frustrations which are necessarily inherent in making judgments on such complex issues, the Committee has made specific progress."

Recommendations

The report recommended the following

*that the Investment Committee share with IPAC its reasons for disagreement on proxies.

*that a member of the Investment Committee should be a voting member of IPAC.

*that one or more IPAC members should be invited to attend Investment Committee meetings, and

*that IPAC should meet with the chairmen of the Investment Committee periodically.