Board of Visitors minutes :: May 29, 1987 :: University of Virginia Library

The following statement was unanimously approved by the Board of Visitors:
Deep concern in the University community about the system of racial injustice in South Africa has been fully shared by the Board of Visitors, even before the President established the Proxy Advisory Committee in 1982. The Board deeply regrets and strongly condemns the continuation of apartheid, as an intolerable and inhumane set of relations among races and peoples.
There is no disagreement about apartheid. Differences exist with respect to responses to the system, including the effectiveness and appropriateness of divestiture of securities of companies doing business in South Africa. After careful study of this question and after considering the views of students, faculty and alumni, the Board continues to believe that complete and total divestment would in itself raise significant concerns of fairness and consistency, apart from risk to the University's capacity to fulfill its central mission.
The Board has reviewed, with benefit and appreciation, the thoughtful report of the Proxy Advisory Committee submitted on March 17, 1987 to the President. That review has confirmed the Board's earlier judgment that total divestment would not be responsible. Consequently, the Board reaffirms its policy of selective divestment.
The Board accepts a major portion of the recommendations of the Proxy Advisory Committee and it fully shares the hope for a more active educational program with broad participation of the University community; the details of such a program are described below.
The Board requests the President of the University to:
- 1. Establish a fund for gifts designated for use in support of scholarship and fellowship programs for non-white South Africans. The University will also contribute to the fund from non-endowment resources.
- 2. Establish a committee to implement this educational initiative.
- 3. Request Student Council to review and make recommendations to the President and the Board of Visitors on the feasibility of initiating a program permitting students to designate $1 each semester in support of the
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  scholarship and fellowship programs for South Africa.
- 4. Offer a payroll deduction program for those University employees who may wish to contribute to such efforts.
On the matter of selective divestment, the Board continues to recognize that in certain circumstances the University of Virginia may decide to disassociate itself from a particular company because the nature of that company's activity in South Africa is judged to involve support of the apartheid system. Such a step is a serious one, and should be taken only after a thorough and objective review of the situation.
The Board has concluded that the University's ownership of stock in companies doing business in South Africa shall be governed by the following guidelines, which the President will communicate to the Proxy Advisory Committee for consideration during its review of such companies:
- 1. Consistent with previously established investment guidelines, the University will not invest in companies whose primary business activity is in South Africa.
- 2. Companies which are non-signatories or which consistently fail to achieve satisfactory ratings according to A. D. Little or other applicable rating sources as recognized by the Finance Committee of the Board of Visitors, are automatically subject to review by the Proxy Advisory Committee. For that reason, the acquisition of additional holdings in such companies should be specifically justified in writing by any investment adviser proposing to add such holdings to the University's portfolio.
- 3. Companies that make sales or loans to the government of South Africa should be automatically reviewed by the Proxy Advisory Committee. Consideration should be given to the volume of such sales or loans, the degree to which they are voluntary, and whether the goods involved are specialized or generally available to the local economy.
- 4. The nature of a company's overall activity in South Africa should receive careful analysis. Included in that analysis should be the company's public commitment to the pursuit of racial justice and equality. The company should be taking positive steps to improve
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  the conditions of non-whites, both inside and beyond the workplace.
- 5. The responsiveness of a company to inquiries from the University regarding its South African business activities should also be considered in the assessment.
The final recommendation concerns the voting of proxies. The Proxy Advisory Committee should continue to review proxy issues relating to U.S. companies doing business in South Africa. It is expected that many of these proposals will urge withdrawal from or transfer of the South African operations of such companies. The Vice President for Business and Finance, after receiving and reviewing the Committee recommendations, shall continue to vote proxies on these issues. The Vice President will give careful consideration to the recommendations of the Committee.
The Proxy Advisory Committee and the Vice President for Business and Finance are requested to report annually to the President prior to the May/June Board of Visitors meeting regarding recommendations made to the Vice President for Business and Finance on proxy issues and the actions taken by the Vice President.
The Board of Visitors wishes to thank Committee Chairman Snook and the Proxy Advisory Committee for their many hours of thoughtful research and deliberation in studying both divestment and educational initiatives which might be taken and would ask the Proxy Advisory Committee once again to focus on the consideration of proxy issues and further study of companies operating in South Africa whose activities warrant review under the criteria set forth above.
The question of divestment will not be considered further by the Board unless there has been a material change in conditions surrounding this issue.