The Yale Corporation’s vote on a proposal to divest the University’s assets from fossil fuels, expected in the coming months, will serve as a test of the body’s conflict of interest policy.
Two Corporation members in particular, Paul Joskow GRD ’72 and Charles Goodyear ’80, have substantial ties to companies in the fossil fuel industry. Joskow sits on the Corporation Committee on Investor Responsibility, which decides whether to implement the pending divestment proposal. He previously served as a director of TransCanada, a major energy company based in Alberta, Canada, from 2004 through 2013. Joskow also currently serves as an independent board member of the Exelon Corporation, an American energy producer and distributor, as well as a government board and task force through the U.S. Department of Energy.
Goodyear, who is not on the CCIR, previously served from 2003 to 2007 as chief executive of BHP Billiton, a multinational petroleum mining and processing company. He is now a member of the National Petroleum Council and a board member of Anadarko, one of the largest fossil fuel companies in the world.
The financial holdings of Joskow, Goodyear and other Corporation members in companies in the fossil fuel industries have not been disclosed. At the same time, the impact of the implementation of the current divestment proposal on fossil fuel companies — either by Yale alone or a broader cohort of colleges and universities — is not precisely known.
“All Corporation members commit themselves to observing the conflict of interest policy, and they treat this commitment with the utmost seriousness,” University Secretary Kim Goff-Crews said in an email.
The Yale Corporation has a policy in place to prevent conflicts of interest, which calls for Corporation members to recuse themselves from discussion or voting in any instance where they or their family members have a financial interest. The policy, however, includes a clause, which states that in some cases, the University’s interest would be served by an individual’s participation in a decision despite a conflict of interest. The chair of the committee — Neal Keny-Guyer SOM ’82 for the CCIR — or the University president are responsible for that decision.
University President Peter Salovey declined to comment on the Corporation’s deliberations, which are confidential.
Joskow declined to say whether he would recuse himself from the CCIR’s deliberations on divestment.
“I plan to conduct myself according to the Yale Corporation conflict of interest policy,” Joskow said. Goodyear did not respond to requests for comment.
University Vice President for Strategic and Global Initiatives Linda Lorimer, who served as University secretary when the policy was developed in the mid-1990s, said the policy is followed whenever it applies, and that the issue of divestment will be no different.
“There are many cases where disclosure of a person’s situation is the best solution, and it is a matter of judgment whether the facts of a particular interest present a conflict, and whether the Corporation is better served by the participation of the trustee in question rather than by his or her recusal,” Lorimer said.
Fossil Free Yale members — the leading student group advocating divestment on campus — were divided on the significance of potential conflicts of interest on the Corporation.
Gabe Rissman ’16 said he is not worried about the conflicts of interest issue, adding he does not find it a worthwhile pursuit of Fossil Free Yale.
“I have faith in the Yale Corporation that it will do the best thing for Yale,” he said. “That’s the point of the Corporation — that it makes those executive decisions.”
However, other members of the student group expressed stronger opinions and said Corporation members with potential conflicts of interest should recuse themselves from the deliberations.
“Doing so would show Yale they take the issue seriously and show neutral members that they trust their judgment,” Yonatan Landau SOM ’15 said.
Jessica Grady-Benson, a student at Pitzer College involved with the school’s recent divestment campaign, said she thinks there was one trustee at her school whose career as a financial investor seemed to pose a potential problem on divestment.
Grady-Benson added that she could “definitely sense his hesitance.”
“Divestment inherently challenges how he makes investment decisions,” Grady-Benson said.
Some members of the Corporation, though, appear to have already made a determination on divestment. Catharine Hill GRD ’85, a Yale Corporation member who also serves as president of Vassar College, rejected a divestment proposal there last year.
Hill did not respond to requests about whether the decision at Vassar would influence her vote on the CCIR.
Fossil Free Yale’s proposal calls for companies’ disclosure of the emissions they generate relative to their energy production, a metric designed by the Carbon Disclosure Project, to give Yale an empirical estimate of each company’s impact. In the event that companies do not comply with disclosure requests, the group hopes the University will decide to divest from those companies, said Gabe Levine ’14, policy coordinator for Fossil Free Yale, earlier this year.
The Yale Corporation’s conflict of interest policy last came into public focus over a 2009 vote to partner with the National University of Singapore to create Yale-NUS. Then-Corporation member G. Leonard Baker ’64 recused himself from the vote because of business interests in Singapore.