Over the past three years, Bowdoin has gotten straight "A's" in most of the Sustainable Endowment Institute's "Green Report Card," which measures colleges' commitments to sustainability.

Belying those marks, though, has been its grade for endowment transparency. For the same three years, it has stubbornly remained at an "F."

Research into Bowdoin's history reveals an inconsistent record with investment transparency and oversight. Past initiatives have resulted in divestment from South Africa and non-investment in Darfur, and at one point in the '80s and '90s, the College had its own committee, written into its by-laws, that was charged with both proactively and reactively considering social responsibility in investments. However, that committee disbanded in 1998, and since then, these issues have faded into the background, even as the College's endowment has grown.

College administrators defend the current arrangements surrounding the endowment, citing confidentially agreements and lack of student expertise on investment issues, as well as a firm belief that the endowment is not a place for political expression.

Indeed, Bowdoin's current investment strategies are such that it is difficult for the College to provide additional transparency, and instances where students can provide input are few and far between.

"I don't believe students have the expertise to be able to advise the College appropriately on the issues of the ways that we should appropriately be investing," said President Barry Mills. "I have no issue with there being vigorous debate on all kinds of issues at the College, but when you're talking about balancing the fiduciary duty we have towards that endowment, it is not a political item. For that reason I think we have to insulate it from the political and social debate that happens on campus."

Meanwhile, a growing number of schools have created oversight committees that promote transparency, student involvement, and even push social and environmental investing agendas. Experts say that there are at least some ways for Bowdoin to involve students in its endowment's management?if not through a committee, then at least by providing more information about the shares that it owns.

"Every student that walks out of a school with a sizeable endowment should have at least a basic understanding of how that happened, and the process behind how that happened," said Mark Orlowski, executive director of the Sustainable Endowments Initiative (SEI). "For the school to not be providing that information, it causes a major disconnect?not a single student knows where that money is really coming from, or how that money is being made."

In light of these developments, the Orient has investigated Bowdoin's past and present investment practices, while comparing them to the policies of other institutions.

Investment Background

Bowdoin's endowment, as of June 30, is valued at $831.5 million. Part of the endowment consists of individual funds earmarked for a specific purpose, like professorships, lectures, or financial aid, while other funds can be used for any purpose.

In the 2008 fiscal year, 24 percent of the general operating budget came from the endowment. About two-thirds of financial aid from the College was funded through the endowment.

Most schools, Bowdoin included, will withdraw a fixed percentage of this money every year, regardless of market fluctuations. The idea behind this is that the draw is sustainable over time.

"The endowment is about in good times and in bad times having a stable source of income with which to pay for your highest priorities," Mills told the Orient last year.

Bowdoin's investment office, headed by Senior Vice President for Investments Paula Volent, is responsible for the management of the College's endowment, under the direction of the Investment Committee of the Board of Trustees.

That committee includes eight trustees, a faculty member, Mills, and Volent as a liason officer from the Investments Office.

Bowdoin does not directly handle any of its investments. Instead, the College's endowment holdings are handled entirely by outside investment managers.

These outside managers invest Bowdoin's endowment in many different areas, mostly in special types of "commingled" funds or limited partnerships which preclude the College from imposing any constraints on the types of investments managers make.

Additionally, Bowdoin signs confidentiality agreements with the managers of these funds, which means that information about specific investments may not be disclosed to the College community or the public.

According to Mills, these confidentiality agreements are not open to discussion.

"Confidentiality is not negotiable in any real sense," Mills wrote in an e-mail. "We are a small investor and don't get to dictate terms."

However, a small proportion of the endowment is invested by managers in securities in Bowdoin's name, which includes things like conventional stocks and bonds. The College has more flexibility in the way that these investments are managed.

According to Volent, approximately 2 percent of Bowdoin's endowment is invested in securities in this manner, though shares in corporations make up an even smaller proportion.

In an interview, Mills said that community members should trust that the school invests responsibly, and leave investment decisions to the trustees.

"We invest in ways that are prudent, with people we feel are responsible and who will do the best they can do...to protect our capital and to get good returns," said Mills in an interview. "We invest with funds that we believe are appropriate after extraordinary due-diligence."

Mills added that the school does provide its commingled fund managers with guidelines for proxy voting (a method used by shareholders to try to change management strategies, usually with social or environmental issues in mind), but said that opening this process to discussion was unnecessary.

According to Volent, very few proxy votes occur each year on the shares held in Bowdoin's name, which generally deal with issues of accounting and auditing.

"It's time to be realistic," Mills said. "Proxy votes are symbolic. It's pure symbolism. Bowdoin owns a tiny percentage of any particular corporation."

Social Responsibility History

Bowdoin first came to address issues of transparency and oversight in investing in the late 1970s, when students and faculty at many schools were concerned with apartheid in South Africa.

In 1978, President Willard Enteman created a temporary committee to investigate the school's South African investments.

The committee's report helped begin the process of divesting from South Africa, although it was not until 1987 that the College was completely divested.

However, the temporary committee also recommended the creation of another, permanent subcommittee, which would "have a significant and telling voice in making policy recommendations on social responsibility issues related to investments."

"The committee feels that the College should be in a position to respond to these issues in [a] systematic and informed fashion," the report reads.

In 1981, the trustees approved such a committee, though the board tweaked the format slightly?instead of creating an independent subcommittee, the school's investment committee was enlarged to include two students and two faculty (at the time it only contained one of each), with a social responsibility subcommittee beneath it, made up of members of the investment committee.

In the May 22, 1981 trustee meeting, the trustees approved the establishment of this social responsibility committee (SRC), and amended the school's by-laws to reflect the change.

The pertinent section of the by-laws reads:

"The Committee on Investments is charged with considering social responsibility in investments and shall establish a subcommittee [sic] of such of its own members and at least one representative of each of the faculty, students and alumni, all as the Committee on investments may determine. The Committee on Investments shall report annually to the Executive Committee through the President such findings and recommendations on matters of social responsibility in investments as it shall deem advisable."

"The idea was that [social responsibility] was going to be coming up more," said Associate Professor of History and Africana Studies Emeritus Randy Stakeman. Stakeman was teaching at Bowdoin at the time and was involved in the debate surrounding South Africa.

The committee was set up, Stakeman added, to vet these issues as they arose, reacting to concerns raised by students or other community members?and also to proactively investigate issues.

Committee Advising

Trustee meeting minutes show that the SRC met at least annually, starting in the early 1980s, at least until 1995 (trustee minutes show the last SRC reports in 1995; one committee member recalled that it convened until 1998).

While the committee initially was concerned with South Africa divestment, it quickly broadened its focus to other issues.

According to the trustee reports, starting in 1987 the SRC began advising the Treasurer's office on its proxy votes. By 1992, the SRC, working with the Treasurer's Office, had developed specific guidelines for proxy voting, and according to a trustee report, "as a general rule, they voted for resolutions calling for further cuts in business ties with South Africa, and resolutions asking for reports on environmental and health policies of companies."

David Becker '70 was one of the original members of the SRC, and eventually became chair in 1990. While the SRC did not have final authority on the school's proxy voting, Becker said that the committee enjoyed a good rapport with the treasurer's office.

"I don't remember any big scandal about our being overruled," he said. "I think it was a pretty amicable situation."

Between 1990 and 1995, the SRC investigated the school's holdings in tobacco companies, as well as potential environmental issues with its investments. It also continued monitoring the situation in South Africa to determine when reinvestment was appropriate.

According to Becker, the SRC was never able to make any progress on the issues surrounding tobacco companies.

"That got nowhere," he said. "That was like, 'We're doing South Africa, and that's all we can handle right now.'"

Once the situation in South Africa began improving, the SRC helped lead the process of reinvesting in companies with South African business dealings. After this process was finished, Becker said, the committee struggled to find a niche for itself.

"We were...casting around after that with other issues and not getting a lot of traction," he said.

When Becker went off the board, in 1998, a new trustee, D. Ellen Shuman '76 took over as chair of the committee.

Within a few meetings, Becker said, the SRC had voted itself out of existence.

Shuman did not return repeated requests for comment.

In the records of the trustees, there was no mention of the folding of the committee, and the paragraph in the by-laws referring to it disappeared in 1996.

"The committee disappeared immediately," Becker said. "I would say it certainly was done quietly, and I raised a couple of questions. I think certainly the board didn't raise any noise about it. A couple of faculty members asked me, and I said the board did not seem committed to looking into those questions, and they may have felt there were other ways to go about it."

Kent John Chabotar, president of Guilford College and Bowdoin's vice president for finance and administration from 1991 to 2002, said that he remembers the situation differently.

"I don't remember [the SRC] ever actually disbanding," he said. "I just think they probably were doing stuff but didn't report back, and it became a non-issue."


Discussions of transparency and oversight dwindled following the SRC's disbanding, and did not resurface again until early 2006, when students began pressing the College to take action on the genocide in Darfur.

In response to concerns of both students and alumni, Mills created a committee of students, faculty, staff, and trustees to evaluate the situation, and make recommendations about what the College should do.

To assist the committee, Bowdoin's investment office reviewed the College's holdings and determined that the school had no investments in businesses supporting the Sudanese government.

After conducting further research, the committee ultimately made a series of recommendations to Mills. Among these recommendations were avoiding direct investment in companies with ties to the Sudanese government; firing indirect fund managers that would not divest from the aforementioned companies; and creating a permanent committee to identify "crimes against humanity."

After receiving the recommendations from the Darfur committee, Mills then made his own recommendations to the board of trustees, which were subsequently ratified.

Mills agreed that Bowdoin should avoid directly investing in companies complicit with the Sudanese government, but maintained that the College should not necessarily fire indirect fund managers that did not agree to avoid such companies?that decision would remain up to the trustees and the investment committee. Any profits from investments in such companies, however, would be set aside into a special fund used for supporting humanitarian efforts in Sudan.

Mills also declined to create a permanent subcommittee to identify crimes against humanity, writing that "the College should encourage individual activism on these important issues centered on the common good."

"Activism is not created or mandated," his statement continues, "it is not the stuff of committees."

After Mills's recommendations were made public, Bowdoin Student Government (BSG) passed a resolution in support of the committee that Mills had declined to support.

Ultimately, BSG and Mills reached a compromise, which allowed for the creation of a permanent committee?the Community Response Committee (CRC)?under the auspices of student government instead of the College itself.

This new committee was charged with investigating "humanitarian issues," rather than "crimes against humanity," which Mills and some BSG members felt was too broad of a mandate.

That committee was supposed to include three staff and four students, but BSG had difficulty finding staff willing to serve on the committee, and did not meet for the first time until last October.

According to current BSG President Sophia Seifert '09, the committee still exists, but has not yet been staffed due to turnover of last year's members.

Renewed Debate

Today, Bowdoin has no transparency or oversight of its investments outside the board of trustees, the president, and the investments office.

While the College conducts due-diligence for all fund managers that it invests with, those procedures are not enshrined in a public policy.

Mills said that while community members do not have information about our investments, the College does nothing that should be cause for concern.

"We're here and we act and live in support of what we consider our principles to be," he said. "We aren't doing anything with our endowment that we don't feel is appropriate or violates our principles."

Mills said that involving students in this decision-making process is not advisable, since students are not well-versed in this area.

"We have students who work in the investment office who have expertise who are utilized for that expertise and help out in important ways, but...it is not a political process," he said.

"If you're interested in affecting what corporations do, go off and do it on your own...Do your work, do your scholarship, do your common good work," he said. "That's going to have a whole lot more value and amplification than worrying about proxy votes."

According to Mills, students are free to submit views or opinions to the president or board, but final authority lies with the trustees.

"You can organize all the people you want to tell the trustees what you think your views are on the way that we should be investing. But ultimately it is their decision, and it was always their decision."

Sheldon Stone '74, chair of the investment committee, said that he worries that pursuing additional transparency could hurt Bowdoin's reputation as an investor.

"One of the things we worry about is making sure that we're viewed to be a desirable client from a manager's perspective," he said. "I wouldn't want to do anything at all that would create any concern among managers that we're not honoring our confidentiality."


While Bowdoin has moved away from committee oversight and broader transparency in its investments in recent years, other schools have created bodies that function much like the SRC did in the 1980s and 1990s.

At Williams College, six percent of the school's $1.9 billion endowment is invested in shares held in the College's name, through outside managers.

The Advisory Committee for Shareholder Responsibility makes recommendations on proxy votes for all of the college's directly held shares, and also provides guidance on broader investment issues. The committee includes faculty, alumni, students, and staff.

At Dartmouth College, where 40 percent of its portfolio is in shares held by outside managers in the school's name, the Advisory Committee on Investor Responsibility (ACIR) fulfills a similar function.

Composed of students, staff and administrators, the ACIR's major responsibilities include voting on "every [proxy] resolution relating to social issues for every company in which the College publicly owns shares," said the committee's executive administrator, Allegra Lubrano.

In addition, according to the committee's Web site, the ACIR also provides guidance and recommendations to the College's investment advisors regarding "certain investment positions that could be deemed inconsistent with Dartmouth's mission."

These schools' activities are focused on shares held in their name, which make up 2 percent or less of Bowdoin's endowment, according to Volent.

However, Orlowski said that some colleges in similar situations have to make this information public and involve students in investment oversight.

"If it's only 2 percent, why not make that information public?" he said.

By not actively involving students in decisions on the management of the endowment like drafting guidelines or recommending positions for proxy voting, Orlowski said that Bowdoin is missing an educational opportunity.

"Just because it's only two percent doesn't mean there's no educational value to creating a committee," he said.

Orlowski also said that other schools, like Haverford College and the University of New Hampshire, have created educational and oversight committees regarding their investments despite the fact that those schools hold no shares in their names.

"Short of some kind of major financial crisis, people are not going to, in large numbers, inquire about this, because it's not part of their everyday experience on campus," Orlowski said. "The committee structure allows for an environment where there can be a more thoughtful and lengthy discussion and dialogue about the issues being raised. I think there's a lot of discussion that can happen and some major learning opportunities that are missed when these sorts of issues are ignored or otherwise downplayed."

Steve Viederman, former director of the Jesse Smith Noyes Foundation and a member of SEI's board of advisors, contested Mills' statement that proxy voting is merely symbolic.

Viederman cited numerous instances where his foundation had either started or become involved in proxy initiatives that resulted in changes in the ways a given corporation does business.

"The idea that it doesn't make a difference is intellectually dishonest?whoever said that, he or she doesn't have the slightest idea what he's talking about," he said. "Voting proxies is not magic?I can sit here and talk with you for hours on how it has been effective. And it's more effective if more institutions get involved."