Shareholder Advocacy Committee|Loyola University Chicago

Shareholder Advocacy Committee

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About the Committee

 

Shareholder Advocacy Committee Background

The University has had a longstanding policy on responsible investing dating back to the 1970s.  In 2006, the Board of Trustees of Loyola University Chicago responded to students and other members of the LUC community who expressed concerns about the University’s holdings in companies and their role of capital in creating financial and society value, and published its updated Policy Statement on Socially Responsible Investing . In this Statement, the Trustees stated that it “is firmly committed to an investment policy that balances effective support of its academic programs and broader educational and social mission with the promotion of social justice and the dignity of the individual.” 

In Spring 2007, through the Office of Finance, the Trustees established the Shareholder Advocacy Committee (SAC), to engage with companies – through an approach centered on advocacy - in discussion concerning their practices and policies (i.e., letters of concern, inquiries); to join forces  with other like-minded advocacy groups in initiatives to effect positive change; to advise on the voting on the University’s shares; and to serve the University as a resource for information on advocacy issues, social responsibility, and corporate governance.

To ensure that the SAC represents the University community, its nine voting members are comprised in equal proportion from students (two undergraduate students, one graduate student), faculty, and staff of the University, and the process for the selection of its members provides for balanced representation, over time, of the University's departments and schools.   

Undergraduate student representatives will be nominated by the University's Unified Student Government Association (USGA); graduate student by the Dean of the Graduate School (formerly the Dean of Students); faculty by Faculty Council; and staff by Staff Council, with final appointment by the President. At least one University administrator from the Office of Finance who is familiar with the University’s investments sit as a non-voting member, in addition to the nine voting members. 

It is understood that the final fiduciary responsibility and decision for the management of the investments that support the University’s mission rests with the Investment Office, a division of the Office of Finance.   The SAC, advisory in nature, may determine the SRI issues it researches and decisions in proxy-voting.

Through the Fall 2007, the SAC met and explored ways to ensure that Loyola’s investment choices reflect the values nurtured by our University and its promise of “preparing people to lead extraordinary lives.”  To execute its efforts, the Shareholder Advocacy Committee seeks input from the Loyola community on areas of SRI concern, in order to focus and be well-informed on the SRI issues that may pertain to the University’s investments.

The Shareholder Advocacy Committee will be responsible for communicating with the nominating groups when new members are needed.  Responsibility for other administrative functions of the committee may be distributed in any manner members find suitable.

Shareholder Advocacy Committee

The Shareholder Advocacy Committe shall engage with companies - through an approach centered on advocacy - in discussion concerning their practices and policies (i.e., letters of concern, inquiries); to join forces with other like-minded advocacy groups in initiatives to effect positive change; to vote the University’s shares; and to serve the University as a resource for information on advocacy issues, social responsibility, and corporate governance. 

Duties

The SAC has been established and designated to work with and assist University administrators with respect to socially responsible investing (SRI) issues of concern and selected advocacy initiatives, and to serve as an information resource for the University administration and community about related social, ethical, and moral issues.  The committee shall prepare periodic reports to the University no less frequently than annually.  The SAC shall be charged with the following duties: 

  • Represent the University as a shareholder advocate
  • Conduct research and identify priority issues around which advocacy activities will be organized
  • Consider proposals from the University community regarding specific investment responsibility concerns
  • Keep Treasurer’s Office apprised of current shareholder initiatives, and on any new issues which may warrant attention
  • Advise the University Treasurer on voting of selected proxies
  • Work with other Jesuit representatives, religious orders, and/or like-minded groups on advocacy campaigns
  • Monitor trends and activities in investment responsibility that have an impact on educational institutional investors
  • Prepare an annual report, to be made available to the University community, summarizing the Committee’s activities and discussing planned future initiatives
  • Provide University copy of meeting minutes on the SAC web site
  • Assemble and maintain information resources found/generated as a result of committee discussions for reference by University administration and constituents
  • Respond to specific requests from the Board of Trustees, Office of the Treasurer and/or Finance, or the President.

Membership and Selection*

The Shareholder Advocacy Committee shall consist of nine voting members:

  • Three current student members: two undergraduates to be nominated by the United Student Government Association (USGA), one graduate student nominated by the Dean of the Graduate School
  • Three faculty members to be nominated by the Faculty Council
  • Three staff members to be nominated by Staff Council.

Additionally, at least one administrator from the Office of Finance who is familiar with the University’s investments will sit as a non-voting member of the SAC. Final appointments will be approved by the President.

Student members of the Committee shall serve a period of at one year*, and may be reappointed for one additional consecutive term based on participation and performance. Faculty and staff members shall serve for a period of at least two years, and may be reappointed  for one additional consecutive term based on participation and performance. Initially, these terms shall be staggered to ensure continuity in the membership of the Committee and familiarity with investment issues. SAC members shall serve until their successors take office.  In the event of a vacancy of a member’s seat, the same selection process will apply, and the replacement shall serve until the expiration of such member’s term and until a successor takes office.  

Undergraduate student representatives to the Committee need not be members of the USGA.  At least one of the faculty representatives to the Committee shall be tenured.

The Committee members shall elect one of their own as chair annually.

*Amendment

As of AY2008-2009: The SAC will coordinate in advance with USGA for the selection of replacements, who would begin a semester prior to a current student representative's completion of his or her term of service, participating as a non-voting member.  Upon the current student's rotation off, the replacement representative would assume SAC member privileges. 

For the AY2010-2011 term: Graduate student representation was increased from one to two members. 

As of AY2010-2011, Student representative will serve a term of at least one year (previously, the term of service was two years). 

Due to the nature of SAC's work, the SAC will also coordinate in advance with all respective appointing areas for the selection of replacements who would begin a semester prior to a current representative's completion of his or her term of service, participating as an observer and non-voting member.  In the event that a new chair is selected, the new members would vote - not the departing members.

Organization

  • The Committee shall meet on call of the Chair and no less than twice during the academic year.  Additional meetings may be scheduled at the Chair’s discretion. 
  •  Committee discussions may also take place via telephone, conference call, or email rather than in person due to logistics and a need for rapid response. 
  • The Committee will set its own agenda within the broad range of socially responsible investing, and will, by formal vote of a majority of the Committee membership, advising the Office of the Treasurer of activities related to investments in the University's endowment, primarily through the exercise of the University's proxy-voting rights and shareholder advocacy initiatives. 
  •  The Committee will set out a specific agenda to the Loyola community each fall, to be submitted to the Office of the Treasurer. The Committee, however, will determine the SRI issues it researches and the recommendations it makes to the University, including its response to issues that arise after the preparation of its annual agenda.
  • The Committee may invite experts, whether or not connected with the University, to attend its meetings as consultants or otherwise provide advice and information.
  • The Committee may establish committees of its members and selected roles such as (Co-)Chair, Secretary, or other functional positions as the Committee deems appropriate.   
  • The Committee shall be responsible for its administrative functions, and distribute among the Committee in any manner members find suitable.
  • Through the Office of the Treasurer, the Committee shall have access to meeting space as necessary.
  • Through the Office of the Treasurer, the Committee shall have access to social issues research and company specific proxy voting recommendations from Risk Metrics (formerly known as Institutional Shareholder Services) .  Separately, Risk Metrics has been contracted to vote proxies on all of the University’s stock holdings.  The Committee can make specific voting requests and recommendations to the University Treasurer on proxy issues arising from specific areas and/or companies of interest.  Proxies for companies owned for the express purpose of shareholder advocacy will be voted by Risk Metrics at the direction of the Committee.
  • The University may establish a fund for the purpose of acquiring shares of companies (not already owned by the University) which the Committee targets for shareholder initiatives, if necessary.

Procedure

The Shareholder Advocacy Committee, advisory in nature, pursues the University's commitment to socially responsible investing and endeavors to effect change in unjust corporate behaviors through an approach centered on shareholder advocacy.  This includes discussion concerning their practices and policies (i.e., letters of concern, inquiries); engaging with like-minded advocacy groups in corporate dialogue, shareholder resolutions, and proxy voting of University shares.  Shareholder advocacy efforts can involve long-term engagements with corporate management, often through years of work and dialogue.  The National Jesuit Committee on Investment Responsibility (NJCIR) maintains this kind of "faith-informed socially responsible investment (SRI) is a work of structural justice."

To develop its agenda and initiatives - to execute its efforts, the SAC independently researches socially responsible investing concerns and issues, as well as seeks input from the Loyola Community as outlined in the Committee's outreach, in order to focus and be well-informed on the SRI issues that may pertain to the University's investments.