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.

  • Nancy Morris

    The authors of this article are honing those skills of tendentious, biased writing so important in today’s fossil media. This is an article reporting that there might be a reason to run an article in the future if the YDN ever learns anything worth reporting, an article whose vacuum of newsworthy facts is filled by nasty insinuation. Those front page column inches demand to be occupied, eh?

    “Substantial ties to companies in the fossil fuel industry?” Love the casual, repeated use of the argumentative term “fossil fuel,” one coined and generally employed everywhere with tendentious (even propagandistic) intent. (Query: How did it feel to read “fossil media?”) No dallying here with uncharged terms such as “traditional fuel.” No, no, no. Let’s get those biases flashing like a hip kid on the street flashing underwear elastic. Who’s your daddy?

    The money line: “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.” Ah, yes, this will surely be a test, we are told. Yes, in-dee-dy.

    But “the financial holdings of Joskow, Goodyear and other Corporation members in companies in the fossil fuel industries have not been disclosed.” So how, exactly, will the vote “serve as a test” if the “financial holdings” of the corporations members are not known? What if they do not include more than nominal investments in the energy sector that might be affected by this vote? The vote will still be a test? Can you run that reasoning by me again? Perhaps the authors meant to write something like the vote “might serve as a test of the body’s conflict of interest policy depending on whether there are any facts out there that make it a test.” Is that it?

    O, and then we have the insinuations: “Goodyear … 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.” Except that while being six years ago the CEO of the world’s largest diversified natural resource company (some energy resources extraction included) is an indication that Goodyear is a fabulously competent executive (the company did very well with him at the helm) who Yale is fortunate to have as a Corporation member, it is not a financial interest. And another thing that is not a financial interest is a seat on the board of a trade association, such as the National Petroleum Council. Nor does a seat on the Anadarko board itself constitute a financial interest that might be affected by this vote, although it does suggest at least the possibility that he may own some Anadarko stock or options. Who knows? O, the SEC knows and Anadarko has to disclose. But the YDN does not bother to check. In fact public records indicate that on 05/14/2013 Mr Goodyear was awarded 2,817 Anadarko shares at $0 per share, with Anadarko stock now trading at about $100. So that’s something.

    But that leads to the question: Does Yale have any investment in Anadarko that it might have to divest as a result of this vote? OOPS! Another missing fact! But does anyone think that a Yale decision to sell any Anadarko stock it might own would have any effect on the value of Mr Goodyear’s holdings in any event, or at least anyone who has a clue about how equities markets work? And if Yale does not now invest in Anadarko, then are we talking about the possible effect on Mr Goodyear’s prosperity that might at some time be brought about by a decision by the Yale endowment NOT to invest in Anadarko assuming that Mr Goodyear then continues to have maintain an investment? Or perhaps if the vote is to decline disinvestment, Yale may buy some Anadarko stock – not from Goodyear, but generally increasing demand for the stock and indirectly benefitting him? Is this a shaggy dog joke?

    And if we’re going to be flirting with considerations of highly attenuated, hypothetical, indirectly linked film-flam such as whether these Corporation members sit on “a government board and task force through the U.S. Department of Energy” or “substantial ties to companies in the fossil fuel industry” then we should definitely be keeping in mind that Yale does invest in the “fossil fuel industry,” so every student on financial aid benefits from that investment and by the nasty, insinuating pseudo-logic of this article has a “conflict of interest” that should have caused those students to recuse themselves from voting in the YCC divestment referendum. And it goes without saying that no such student should be writing about this subject in the Yale Daily News. Whether that shocking practice is going on will be a test of the YDN conflict of interest policy.

  • mryale

    It’s interesting to see Nancy Morris complain about the tone of an article — her comments are always over-the-top nasty.

    What annoys her here and elsewhere is when the YDN or another commentater suggests that Yale administrators and trustees are ordinary human beings who might have complicated motivations. Like the rest of us.

    Seems to me like a healthy instinct, and one in keeping with a newspaper’s basic mission.

    And I don’t understand why “fossil fuel” is a loaded term. BP uses it in its TV commercials — apparently BP does not find the term offensive. . What term should the YDN use instead?