The Queen’s University Board of Trustees last week rejected efforts to require divestment of the university’s endowment and investment funds from companies conducting business with or in the State of Israel and declined to implement a negative screening process for future investments. The decision, which adopted a review committee’s assessment, stands as one of the more detailed analysis of the issue at a Canadian university. Some universities have declined to even consider the possibility and others have held open hearings on the issue. But Queen’s agreed to full committee review, sparking consultations and numerous submissions.
The review committee’s report identifies several reasons to reject the divestment proposals including fiduciary obligations that require that the University’s investments be managed prudently with a view to maximizing financial returns, the lack of consensus on the political issues, and the acknowledged ineffectiveness of divestment policies. The report also notably relies on the importance of institutional neutrality in reaching its decision.
I wrote about institutional neutrality last summer in assessing the University of Windsor’s ill-advised agreements with encampment protesters that raised concerns about antisemitism and sparked outrage from the Jewish community (in response, the University quietly considered – then dropped – plans to adopt the IHRA definition of antisemitism). The principle of institutional neutrality dates back decades and is designed to address concerns that university statements politicize the university and constrain the academic freedom and the freedom of expression of individuals in the university community. When properly applied, it means that university members are free to express their own views, but the university as an institution should refrain from doing so.
Queen’s University affirmed its support for institutional neutrality last September:
The pressure to comment or adopt a position can be considerable, but the university is by definition and mission a diverse plurality: a large community which includes many different perspectives whose merits the institution considers and evaluates through dialogue and research. So, while individual members can and should express themselves on issues of concern to them, the institution cannot, except on matters directly relevant to its functioning as a university, speak on behalf of the whole community.
The committee report cites that position and the importance of the principle as a key factor in rejecting divestment:
Institutional neutrality was another key factor in the Committee’s decision-making. Institutional neutrality requires the University not to use its administrative functions to promote a political or symbolic stance on domestic and global current events as doing so could inhibit academic freedom and an environment of free and open inquiry. A decision to divest or establish a negative screen on the basis of a political or symbolic position would clearly be taken as the University advancing a particular position, in violation of Queen’s institutional practice of neutrality. Investment decisions that comport with institutional neutrality are based solely on an analysis of the financial risk and potential returns. That analysis must consider ESG factors as part of the financial risk analysis; but considering ESG factors in the financial evaluation of an investment is distinct from the promotion of political views.
We are unlikely to have seen the last of pressures to abandon institutional neutrality and to adopt divestment proposals. Having engaged in an extensive, open consultation, Queen’s has provided exceptional guidance for universities facing the same issue with a clear recommendation to reject divestment as ineffective, counter to the fiduciary obligations of investment committees, and inconsistent with institutional neutrality principles that are essential to preserving freedom of expression on campus.