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Trustee Conflicts Hits Specialized Press
Extensive reviews of the controversy have been published on the Chartered Financial Analyst (CFA) Market Integrity Insights webpage, as well as on the Pensions & Investments website for institutional investors.
The CFA article is clear about best practices when Board members are involved in firms that might serve an institution:
When one of the managers competing to earn the business of the organization employs, or is even owned by, a member of the board or investment committee, there is an obvious conflict of interest. The simplest way to avoid this conflict is for the endowment to adopt a policy that prohibits doing business with firms affiliated with board and committee members. The establishment of such a policy ensures that all appointed individuals are working solely in the best interest of the organization.
Support for this policy can be found in the provision of the Code [CFA Institute Investment Management Code of Conduct for Endowments, Foundations, and Charitable Organizations] that requires board members to act with loyalty and proper purpose, and “avoid conflicts of interest pertaining to the implementation of the organization’s investment strategy whenever possible.” Code guidance recommends that board members not personally profit at the expense of the organization and not have affiliated firms provide services to the organization.
According to the Pensions & Investments piece, the College is refusing to divulge the amounts of investments in Trustees’ firms before the Trustees joined the Board:
According to Mr. Anderson, Dartmouth invested $90 million in three Morgan Stanley real estate funds between March 2005 and March 2007. The college also invested $40 million in Lone Pine funds between March 2009 and April 2011, and $30 million in Greylock funds or funds in which Greylock had an ownership interest, between November 2009 and February 2011.
Mr. Anderson also disclosed an investment of $15 million made in Bain Capital’s Asia Fund II in December 2011.
Mr. Anderson said all the initial investments in various funds were made before the investment professionals joined the investment committee. He would only detail investments made after the trustees joined the board and would not discuss how much was invested in funds from Technology Crossover Ventures or TPG, saying Messrs. Kimball and Coulter were not on the board of trustees when the investments were made.
I think that it is time for the College to come clean with the Dartmouth community. Talking about transparency is nice; actually being transparent is better:
Dartmouth should reveal the details of each and every investment and other financial transaction in excess of $1 million made between 2000-2012 with firms associated with past and present Trustees, members of the Investment Committee, and any other alumni. The amount of these investment should be detailed, along with the level of their associated fees and their individual performance in comparison to indexes of comparable investments.
If these investments were honestly in the best interests of the College, as the Trustees have asserted, the Board has the information to prove this fact. But will the Trustees have the necessary integrity to tell the whole truth to the Dartmouth community?
Addendum: Just to be thorough: there was no mention of these articles in the Dartmouth in the News newsfeed.
August 14, 2013
Breaking: Of Crips and Bloods and Memories of Ghetto Parties
History repeats itself, first as tragedy and then as farce, or sometimes it just repeats itself. From the New York Times on November 30, 1998: At Dartmouth College, white students at a ”ghetto party” dressed…
June 25, 2013
Dean of the College Charlotte Johnson’s War on Students Part (2/2)
Part 1, Part 2 Today’s post again recounts the events that befell the Freshman. However, the content of the Hanover Police department report reproduced in this space yesterday is supplemented by information from my own…
October 18, 2009
When Love Beckoned in 52nd Street
We were at San Francisco’s BIX last evening, enjoying prosecco, cheese, and a bit of music. A full year of inhabitation in Northern California has unraveled to me no decent venue for proper lounging, but…
October 9, 2009
D Afraid of a Little Competish
So our colleague and Dartblog writer Joe Asch informed me that the D has rejected our cunning advertising campaign. Uh-oh. The Dartmouth is widely known as a breeding ground for instant New York Times successes,…
September 4, 2009
How Regents Should Reign
As Dartmouth alumni proceed through the legal hoops necessary to defuse a Board-packing plan—which put in unhappy desuetude an historic 1891 Agreement between alumni and the College guaranteeing a half-democratically-elected Board of Trustees—it strikes one…
August 29, 2009
Election Reform Study Committee
If you are an alum of the College on the Hill, you may have received a number of e-mails of late beseeching your input for a new arm of the College’s Alumni Control Apparatus called…
- The Dartmouth College Case
- 2007 Trustee Election
- Dartmouth Constitution
- Sunday Morning Sinatra
- The Indian Wars
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