University of Minnesota Board of Regents Chair Janie Mayeron brought forward a potential policy adopting “institutional neutrality” regarding the University’s consolidated endowment fund Wednesday.
The potential policy would set a precedent that the University will not make investment decisions on social and political matters outside of the University’s control, Mayeron said. Board policy currently uses an environmental, social & governance (ESG) framework for investing to align with the University’s mission and values, which would interact with the new policy if passed.
Listening to the University community and better understanding the endowment’s function with the University’s mission are two of the most important priorities in the conversation, Mayeron said.
“We have learned that our University community is divided on the topic of divestment,” Mayeron said. “And that even if it were not, the feasibility of doing divestments in this current financial environment is complicated, and I would say nearly impossible.”
At the previous Board of Regents meeting on June 13 and 14, there was a work session where Chief Investment Officer Andrew Parks and Associate Secretary of the Office of the Board of Regents Jason Langworthy explained the University’s consolidated endowment fund and the history of divestment at the University.
The endowment is worth approximately $2.3 billion as of March 31 and uses third-party fund managers to manage 98.3% of the endowment.
The fund managers run the endowment by investing in selected companies. The funds are then used to support core University missions including research, fellowships and scholarships.
Selling certain pieces of the endowment could impact returns as it would affect holdings in a larger number of companies, Mayeron said. She added she has concerns about how endowment changes could impact costs for students and revenue streams.
According to Mayeron, after the previous work session, the Board sees divestment as largely symbolic with no meaningful impact on companies or federal and international policy.
Regents Bo Thao-Urabe and Mike Kenyanya said they had questions about how this potential new policy will impact the current ESG framework for socially responsible investment.
“If we take this position without clear frameworks for engagement it just feels like we have not truly engaged in good faith,” Thao-Urabe said.
Regent Robin Gulley said she worked on efforts to divest the University from genocide in Darfur, South Sudan when she studied at the University.
“It was one of the things I was most proud of as a student,” Gulley said.
Divestment from one university can create a domino effect, where other institutions may follow and have a real impact, Gulley said.
Gulley said taking a neutral stance is convenient, but this policy would show the Board will not listen to students when called to take a moral stance.
“I am deeply disturbed by the idea that that’s the kind of message that we want to send to our students a month after we told them that we would really consider divestment,” Gulley said.
The policy was discussed because several regents expressed their interest, Mayeron said in an interview with the Minnesota Daily.
“I think the next step is to absorb what we heard and figure out what the next step should be,” Mayeron said.
President Rebecca Cunningham said she appreciates the respect and dialogue of students on campus in their activism, but the Board also needs to consider safety and welfare on campus for the fall.
The Board has not made an official decision on the policy.