The Stanford Management Company manages the fourth largest university endowment in the nation at $36.5 billion. The Statement on Divestment, which calls for Stanford to divest from Chevron, Lockheed Martin and other companies tied to Israel’s military campaign in Gaza, was recently passed in Stanford’s 2024 ASSU election. This bill, coupled with campaigns for Stanford to divest from the fossil fuel industry, highlight that the investment of our endowment is under more scrutiny than ever.
Questions over the ethics and responsibility of the University’s investments are handled by the Board of Trustees’ Special Committee on Investment Responsibility (SCIR), which steers Stanford’s investment decisions. This committee currently features no student members.
We believe that the inclusion of student representatives has long been needed, independent of current movements. The Board of Trustees has eleven committees that make recommendations to and advise the Board on various aspects of the University’s operations. Currently, two student representatives serve as “full, voting members” on four of these committees: namely, Development, Finance, Land & Buildings, and Student, Alumni, & External Affairs. Student members on the Finance Committee already oversee fiscal matters similar to those SCIR deals with.
We call upon The Board of Trustees to introduce two student seats on the SCIR to officially include students in discourse and decision-making concerning Stanford’s endowment.
The case for student representation on SCIR
Students offer a different perspective than current seated stakeholders on how institutional responsibility should motivate investment decisions. Having student members on the committee would foster more direct and effective representation of the diversity and conviction of student views, removing the kinds of bureaucratic red tape that isolates decisionmakers from our voices. Student members could serve as spokespeople who listen to, summarize and report on student concerns, rather than leaving it up to the Board of Trustees to speculate on campus sentiments.
Our argument for student input is separate from particular activist causes or advocacy. Rather, it is rooted in the need for an active and official student partnership with the Trustees over our University’s institutional holdings.
Stanford’s investment portfolio, or the “Merged Pool” controlled by the Stanford Management Company, is money that is invested in the name of our education. Many current students will become alumni who endow gifts that are managed as part of this portfolio. Representation on the Investment Committee would cultivate the financial partnership between Stanford and future alumni from an early stage. It will also foster greater trust and transparency between current students and administrators.
With these benefits in mind, why are students not already represented on the Special Committee on Investment Responsibility?
If top Stanford leaders believe students are not experienced or knowledgeable enough about finance and investing, this conflicts with the fact that students are already represented on the Finance Committee. Moreover, the student body at large has earned the confidence of the University to take on loans for their education.
If Stanford does not wish to disclose its investments to members of the student body, we do not think this is a sufficient reason to preclude student representatives. Stanford students already work as summer analysts at the Stanford Management Company.
If Stanford believes students are incapable of putting the good of the University before advancing their personal politics, then maybe they should have not trusted students to serve on the Presidential Search Committee in the first place – a committee with a similarly significant task.
A brief history of student-led investment decisions at Stanford
Stanford students have long demonstrated the desire to discuss and revise institutional holdings. In 1985, the student body voted 2,045 to 485 that Stanford should divest from Motorola due to Motorola’s sales to South African military and law enforcement. Stanford’s Trustees voted in agreement with students’ recommendation, committing to drop its nearly $4.7 million worth of Motorola stock if Motorola continued business operations with the regime. This culminated in Motorola selling all manufacturing operations in South Africa.
In 2005, the Stanford chapter of “Students Taking Action Now: Darfur” (STAND) pushed Stanford to divest from four companies whose business operations supported the Sudanese regime that perpetuated genocides in Darfur.
In 2014, the Board of Trustees announced that the Stanford endowment would no longer fund coal mining companies, making Stanford the first major university in the nation to take any such action. The Board Chair at the time described Fossil Free Stanford, the student coalition behind much of the advocacy at the time, as having “catalyzed important discussion” about investments made by the University.
In all of these cases, the Board ended up revising institutional holdings due to student perspectives. It’s time to institutionalize the partnership between students and the Board of Trustees. Formal seating of students on the Investment Responsibility Committee would provide stability to the tumult that exists on all sides of difficult investment discussions.
A seat at the table
Since the Board’s 2018 adoption of its Statement on Investment Responsibility and Ethical Investment, the school has witnessed intense student advocacy for divestment including ASSU ballot initiatives and petitions to faculty and the Board of Trustees.
To be clear: we are not arguing that students alone should drive Stanford’s portfolio. Rather, we are simply asking for students to be respected enough to have a seat at the table when discussing whether the endowment gets spent in line with the values Stanford claims to stand for. This includes “environmental, social and governance factors,” according to the Committee’s statement of values.
We propose that students should have two seats — one undergraduate, one graduate — on the Special Committee on Investment Responsibility. This selection process should be rigorous, credential-based and should start as soon as possible.
An ideal candidate for the committee would have an extensive background in finance and investing, the ability to communicate the diverse interests and needs of the student body and, most importantly, demonstrate the shared values our community embodies.
If the University commits to this increased transparency, the Board of Trustees will gain invaluable insights into student perspectives, while students will gain long-awaited involvement in critical decision-making related to Stanford institutional holdings. Aligned investing is difficult — more accountability can only help.