U of T administration has finalized the terms of reference for an advisory committee to oversee and direct investments made out of the university’s $5 billion in assets. The committee, made up of students, faculty, and alumni, will accept nominations starting Feb. 23.
Existing investment policy directs the U of T Asset Management Corporation, an independent subsidiary of the university, to manage investments based on a profit-maximization model.
The committee will concern itself with human rights, environmental sustainability, corporate governance, and health issues that come up in the university’s investments. In the past, appeals from the university community to drop ethically dubious investments have been processed by standing committees struck by the Governing Council. The university divested from the South African Apartheid regime in 1988, and sold its tobacco stocks in 2007. More recently, GC rejected a student group’s appeal to withdraw from corporations operating in Darfur.
According to Thomas Felix, president of the Responsible Investment Working Group, the premise of the new committee is to allow the U of T community to have a say in the investment process. The advisory committee will set the agenda at the beginning of each year with the area of focus depending on faculty support and research. It will make recommendations to the administration.
“Traditionally investment managers for U of T were instructed to vote in the shareholders’ interests.” said U of T VP business affairs Cathy Riggall. “Now a group of people believe that we should be more specific in how to vote proxies.”
“At the moment we are very passive with proxy voting. We don’t really vote against management. We’ve seen the policy records,” said Felix. The new arrangement would make for an investment environment conducive to the values of the institution, since the university would be able to use its weight as a shareholder on corporate policy decisions. Felix said this will allow the university to protect the long-term value of their funds. The new advisory committee will address these major issues.
Organizations with advanced social funds such as Harvard University, Brown University, and Canadian Social Funds have adopted similar investment models.
This committee will be reviewed in three years and could possibly make recommendations directly to the business board.
Applications for nominations and the terms of reference will be available on the Business Affairs website. Nominations for the standing committee will be due on March 6.
