Principles for Board Decision-Making on Divestment Requests

In January 2015, Robert A. Knox, Chairman of the Board of Trustees and the Executive Committee, shared with the ACSRI the principles which guide the Board in its consideration of divestment proposals:

They are as follows:

1. When the Board, acting on behalf of the University, is asked to prohibit investments of the endowment in a given industry or in companies doing business with a particular government, it is being asked to express an opinion or take action on an external social or political issue that, in the overwhelming majority of cases, is not directly related to the operations of the University.
2. A fundamental goal of Boston University is to create an environment in which an academic community can productively consider, discuss, and debate a variety of viewpoints on social and political issues, and that encourages freedom of inquiry. Such conditions allow scholars to pursue knowledge according to standards of evidence and logic without the encumbrance of an institutional position that may dampen discussion of alternative views. When the University, as an entity, adopts a single viewpoint or takes action relating to divestment, it risks undermining that goal. Therefore, non-investment or divestment actions based on social or political principles should be very rare and occur in only the clearest of circumstances, and should be judged to withstand the test of time in terms of how the wisdom of the University’s decision will be judged by future generations.
3. Such circumstances exist only when (i) the degree of social harm caused by the actions of the firms in the asset class is clearly unacceptable; and (ii) any potential negative consequences of the decision (including the risk of censorship of competing views within the University or the risk that the wisdom of the decision will fail to withstand the test of time) are clearly outweighed by the importance of taking the divestment action in order to lessen or mitigate the social harm.