If money talks, does a billion dollars yell when it is owned and managed by one of Canada’s most respected universities? That’s the size of McGill’s endowment, an accumulation of capital invested in financial markets to help pay for a small fraction of the university’s annual expenses. The process governing how this endowment money is invested, and what corporations or other financial instruments the university owns, is the subject of a review process going on right now.
Until March 17, the McGill Board of Governors is holding consultations on their proposed Terms of Reference for the Committee to Advise on Matters of Social Responsibility (CAMSR). It is very rare that the community gets a chance to influence how the Board of Governors operates. I’m writing this to say that the proposed terms are thoroughly unimpressive and that students need to get involved if there is to be a push toward better practices.
From my seven-plus years of time spent at McGill, it seems only two groups of people in the community can do and say whatever they want: tenured professors and students. Everyone else is scared to speak their minds for fear of retaliation. Students, the constantly regenerating energy of the university, can speak freely. There are repercussions to certain actions, but in terms of job security and reputation, the stakes are low. The risk of not doing something to gain experience and challenge oneself while a student is more detrimental than the momentary discomfort and embarrassment felt in trying something.
In regards to the proposed Terms, they maintain a tendency for the Board of Governors to not operate on an evidence basis.
At McGill, there is almost always a contentious conversation to jump into. One continual source of controversy is its Board of Governors, which is not required to act in the best interests of society; governors “shall act in the best interests of the University”, as per point 1.1 of their “Code of Ethics and Conduct.” The interests of McGill and society need not be congruent, except insofar as governors act to “maintain confidence in the University” (point 1.3). CAMSR is one potential balancing force in this messy and subjective dynamic.
In regards to the proposed Terms, they maintain a tendency for the Board of Governors to not operate on an evidence basis. Examples from the past of of relying on opinion rather than evidence are abundant, but there is space here only for three. First, in May 2013 two petitions were submitted to CAMSR by Divest McGill: one to divest from Plan Nord (now Le Nord pour tous)-involved companies, the other to divest from tar sands extraction companies. After the Board meeting, the ex-officio chair of CAMSR told me that her research on fossil fuel divestment included reading the Divest McGill brief, attending the CAMSR meetings, and reading articles which she did not keep record of. From this, she wrote the response to the Divest McGill petitions, in her words, “off the top of my head.”
Second, after this poorly crafted response was presented at the May 2013 Board meeting, an external Board member, a prominent investment banker, expressed his opinion that Canada’s economic reliance on fossil fuels made it impractical for McGill to divest its ownership in these industries. That his point was moot – McGill’s endowment is intentionally invested as much as possible outside of Canada – was not brought up. Canadian Equities comprised 12.3 per cent of McGill’s investments at the time, and resource extraction was 8 per cent of Canada’s economy in 2013.
Third, during this discussion, the then-principal of McGill made a brief remark against divestment as a tactic, stating her opinion that South Africa may have been hurt more by the disinvestment campaigns encouraged by the African National Congress (led by Nelson Mandela) than if there had been no disinvestment. No one questioned her claim that the primary international policy tool used to end apartheid was more destructive than helpful. None of these Board members needed to present evidence to back up their claims and actions, and the other members nodded along, with only one voice dissenting out of 25.
Someone must present evidence that McGill is complicit in foul play, and only then will McGill’s Board act. Unlike in legal proceedings, the alleged wrongdoer (McGill) gets to act as their own judge in cases brought to the Board.
That all happened while operating under the old Terms of CAMSR. The new Terms unfortunately maintain a conception of ethics and justice that Kip Cobbett, Chair of the Board and a prominent lawyer, brought up in that same May 2013 Board meeting. His opinion was that the burden of proof in ethical matters for the Board is entirely on whomever is alleging a foul act was committed, i.e. someone must present evidence that McGill is complicit in foul play, and only then will McGill’s Board act. Unlike in legal proceedings, the alleged wrongdoer (McGill) gets to act as their own judge in cases brought to the Board.
A prominent corporate and commercial lawyer like Mr. Cobbett is surely aware of the pervasiveness and secrecy of corporate legal infractions worldwide. Most corporate violations of the law (including what would be criminal offences if perpetrated by individuals) are settled out of court with no trial, and no criminal violation recorded. Corporate crime now usually results in a civil fine, meaning that when a corporation like General Electric, which has an impressive criminal record, is accused of polluting a stream (as it often is), the matter is settled quietly and out of sight with a monetary penalty.
If the CAMSR Terms of Reference are adopted as proposed, the Board’s implicit opinion is that no evidence is needed to know McGill is acting ethically – that it is not causing damage.
If the CAMSR Terms focus on corporations’ nearly invisible legal infractions, and the Board isn’t demanding anyone look at its investments proactively, then how is the case for good conduct being built? How is evidence being gathered that McGill is not complicit in injuring humans and the planet?
The answer is simple: it isn’t. If the CAMSR Terms of Reference are adopted as proposed, the Board’s implicit opinion is that no evidence is needed to know McGill is acting ethically – that it is not causing damage. In moving forward, the Board has two options: ensure that evidence is gathered, or that the cluelessness continues.
Taking the laissez-faire approach entrenches McGill in the status quo, only moveable if others dare try to shift it. It also places McGill as a laggard on this matter relative to several universities and pension funds worldwide (Harvard, CALPERS, Norwegian Pension Fund, and UBC, to name a few). If a world-class university is not proactive in promoting a dialogue concerning the ethical implications of how that almighty thing called money is allocated, I’m at a loss for what actor in society fills that role.
There are open consultations on Wednesday, March 12 in the Thomson House Ballroom and written submissions are accepted until March 17 at 5 p.m. As arguably the only group on campus with the time and freedom to speak their minds (and to pass on the thoughts of university staff too scared to speak openly), students have a vital role to play in shaping these discussions.
David Gray-Donald graduated in 2010 (BASc in Environment and Biology). From 2011 to 2013 he held jobs at McGill and SSMU. The views expressed are his alone and do not reflect those of McGill University or SSMU. He’s happy to talk constructively about the CAMSR ToR review as an interested alumnus at david.gray-donald@mail.mcgill.ca.