Last week, the Board of Trustees provided its response to the request by SU Prison Divest to review investments in private prisons and related companies. Given some of the dialogue that has occurred since then, I’d like to provide the community with information about the Board’s response.
SU Prison Divest requested divestment of two companies that directly operate private prisons. The Advisory Panel on Investment Responsibility and Licensing reviewed the issues under the University’s existing Statement on Investment Responsibility (SIR) and agreed, recommending divestment.
What the Board then reported back to SU Prison Divest is that Stanford has no direct holdings in these private prison operators, and that the Stanford Management Company (SMC) has confirmed it would not invest in them unless any concerns under our policy were allayed.
SU Prison Divest also requested Board action – initially shareholder engagement rather than divestment – on several other categories of companies that do not directly operate private prisons but have business or investment relationships with private prison operators. We looked at these issues extensively and concluded that, under our current SIR, these other companies didn’t meet the threshold of “direct social injury” that is required for Board action. As a result, no further inquiry was required regarding whether or not SMC directly holds any of the companies in question.
The Board’s decision on these companies was based on the existing Statement on Investment Responsibility. In delivering its decision to SU Prison Divest, the Board announced that it will conduct a full review of the SIR and associated procedures this year and will be soliciting community input. This will provide those who favor a different approach to investment responsibility standards an opportunity to share their views.
Importantly, in its letter to SU Prison Divest, the Board made a point of stating that the fairness of the criminal justice system has been brought into question on many occasions in recent years and that this troubling issue deserves serious national discussion. The Board also noted that, through its research and teaching, Stanford is actively involved in this national discussion and in exploring solutions. The Board takes seriously the concerns raised about private prisons and the criminal justice system and respects the desire of students to shine a light on a pressing issue facing society.
Later this fall, we will be announcing more details about the community input process on the SIR review, and we’ll welcome thoughts from across the university community on the principles that should guide these important decisions going forward. We look forward to your feedback.
Gail B. Harris
Chair, Special Committee on Investment Responsibility
Board of Trustees