The Advisory Committee on Shareholder Responsibility received a surprise recently, learning that it would have to shrink its membership from 10 people to three and that it would only be allowed to include undergraduate students.
The committee - originally composed of undergraduates, graduate students, faculty and alumni - met on Feb. 8 with Patricia Campbell, the university's executive vice president, and Peter Dolan, chair of the Administration and Finance Committee of the Board of Trustees.
At the meeting, Dolan told the committee that the trustees demanded that the committee cut its membership to include only the three undergraduates, eliminating the seven non-student members, according to committee members. The committee will now consist of Chair Gabe Frumkin, a sophomore, and juniors Nicole Zeller and Lorenzo Arroyo.
"The students were very disappointed to find out that [the approved committee] was a much more stunted version than what we had originally believed," Frumkin said.
But Campbell said that the university had never approved a 10-person committee and that the university has remained consistent throughout the process.
"The procedures going forward are consistent with those outlined by the [Board of Trustees] last May when they agreed to meet with the student committee," Campbell said.
Frumkin, meanwhile, said that the committee had never heard directly from the trustees and had been led to assume that it had the Board's tacit approval. "Essentially, we were communicating with Patricia Campbell," he said. "We were using the administration as this communication route, and the administration never said that [a wide-ranging, 10-person committee] would be unacceptable, so we always just thought it was OK [with the trustees] because we never heard anything differently."
Campbell maintained that the Board of Trustees had articulated its preferences, though. "The Board was pretty clear last May that [the committee] would be a small number of students," she said.
"The board agreed to hear input from the small group of students relative to the proxy votes," Campbell added, referring to the voting system through which trustees make decisions concerning the endowment.
Frumkin believes that limiting the committee's variety of perspectives and number of members detracts from the educational opportunities for the rest of the community. "The work that we're going to have to do is divided between that many fewer people, so it makes it less valuable to the community," Frumkin said.
Frumkin is not sure how he will be able to incorporate the non-student members into his committee's discussions. "We are still working that out," he said. "I still plan to meet with them."
The committee had originally wanted to work toward publicizing information about Tufts' endowment, writing open reports on its findings and discussing with outside parties. But the trustees demanded in January that committee members sign confidentiality agreements saying that they would not share the knowledge that they do receive about the endowment with outside parties.
Frumkin explained that if there were a proxy vote relating to a specialized issue such as global warming or nondiscrimination policies, the committee would not be able to ask the advice of relevant constituencies such as Environmental Consciousness Outreach or the Lesbian, Gay, Bisexual and Transgender Center.
According to Frumkin, the board is also restricting the committee from publishing open reports and sharing its current knowledge and understanding.
"Not only is it that the endowment isn't transparent, but the process itself isn't transparent," Frumkin said.
"That is the decision of our board, that it's their fiduciary responsibility to invest this endowment," Campbell said. "They've made the decision to keep that information confidential."
"We think the policy of confidentiality just maintains the integrity of the university's proprietary investment strategies," Campbell added. "It's a common strategy."
Also, the advisory committee was notified some time ago that it would only be allowed to give suggestions on how the university invests its direct holdings, which make up a small minority of the endowment's funds. Commingled or mutual funds will remain off limits to committee members.
Frumkin was frustrated that the committee would have less actual input than he had originally anticipated. "While this is a great educational opportunity for the three students that are allowed to see it, it's very limiting to what we're allowed to do," Frumkin said.
"I'm not quite sure how the process worked out," he continued. He called the current arrangement "a sort of crippled [group] of students who don't really have any power."
Campbell said that the Board of Trustees sees the committee as primarily an educational opportunity for three undergraduates, rather than an advisory board.
"I think it's a great opportunity for [the students] to do some learning," Campbell said.
Frumkin said he hopes that in the coming years, the Board of Trustees will become more comfortable with incorporating non-students into the transparency initiative, as it becomes clear that the committee does not want to damage the Tufts endowment or restrict its profits.
"[The alumni are] being given no sense of propriety or ownership over their donations in most cases," Frumkin said. "It's really disconcerting to think that they're being denied any understanding of where their money goes."
The Responsible Endowments Coalition, a network of students, alumni and faculty working to promote socially and environmentally responsible investment of school endowments, cited on its Web site that schools currently working with responsible investment committees include Harvard, Brown, Columbia and Yale Universities, and Williams and Swarthmore Colleges.
Schools working with responsible investment committees have endowments ranging from Barnard's $159 million to Harvard's $34.9 billion. Frumkin said that these schools demonstrate that it is possible to release some information without jeopardizing Tufts' investments or sacrificing endowment growth.
Despite the setbacks, Frumkin is still optimistic and thankful for the progress that has been made. "Nicole, Lorenzo and I can see things that no one else can see," he said. "We can see where Tufts has direct investment, and that's really exciting."
"But we're interested in how we can use this information and capitalize on the opportunity" to use the information constructively without compromising the work of the Investment Office, Frumkin added.
"I think the main reason that we don't disclose information now is that ... it would jeopardize our investment strategies," he said. But Frumkin added that sharing old or partial pieces of information "wouldn't do anything to our investments," and that numerous other schools share this information.
Campbell said that the administration was ready to start working with the three students. "We're eager to get started," she said.
"We find that we still have a very long way to go and a lot of work to do," Frumkin said.
The committee plans on reexamining and redefining the goals it set at the beginning of the semester.
The committee will continue to make recommendations on the proxies it is allowed to see and raise awareness on campus about endowment transparency.
Frumkin believes that students should express their concern about the lack of transparency.
"One of the best things about what we're doing is that it's a totally constructive way of furthering Tufts' commitment to ... responsibility and citizenship," Frumkin said.
Giovanni Russonello contributed reporting to this article.
