Regents Adopt Investment Policy

Balancing maximum returns with social justice is the goal of the updated investment policy adopted by the UW System Board of Regents at its meeting last week in Madison.

The new “Socially Responsible Investment Policy” states the Board of Regents must maintain its primary role of fiduciary responsibility in managing the UW System’s $241.3 million investment portfolio while emphasizing moral responsibility in investment decisions.

The policy also institutes a review process of investments; establishes a yearly forum for the public to voice concerns about investing decisions; and allows investors to use social concern as a top priority for how their funds are invested.

Regent Kathleen J. Hempel of Green Bay, chair of the Business and Finance Committee, said the Board considered student concerns about investments in companies operating in countries with documented human rights abuses, such as Burma, while writing the new policy.

“At the end of the day we said the UW is a special institution, and, in addition to protecting and strengthening our investments, it’s appropriate to express concern about where funds are invested,” Hempel said Thursday before her committee approved the policy. The full board unanimously approved the policy Friday.

Several students and others at the meeting said the board’s new policy doesn’t go far enough. “We don’t have to pit social responsibility against maximum returns,” said Dan Rodman of the Alliance for Democracy.

But several regents underscored that the new policy is just a beginning. “This is a good start. This issue will not go away,” Regent Jonathan B. Barry of Mount Horeb said.

Regents also heard a report on the “Graying of the Faculty,” which predicted the retirement of more than one-fourth of faculty system-wide and at UW–Madison within the next five years. David J. Ward, UW System senior vice president, noted that 28 percent of faculty system-wide — a total of about 1,900 — is expected to retire by 2002. At UW–Madison, the percentage is 26 percent.

Ward called these impending retirements “a problem of significant dimension” because competitive salaries and benefits are needed to lure talented people into these positions, and the UW System doesn’t have a tremendous amount of financial flexibility.

Phillip R. Certain, dean of the College of Letters & Science, told the board that managing faculty turnover — and not retirement — is his major challenge. As dean of the college that, because of its size, makes up 1 percent of the faculty at research institutions in the United States, Certain said that managing faculty turnover “is a much more serious problem than the problem before you today.”

Certain said his college nets but $12,500 when a faculty member retires or takes another job. That leaves few extra resources for flexibility and other expenses within the college, he said.