One of the responsibilities of the Board of Trustees is oversight of Stanford’s endowment. As part of that oversight, the Board considers requests from the university community for divestment from particular companies.

Stanford has a process for reviewing investment responsibility requests. The Advisory Panel on Investment Responsibility and Licensing (APIRL), a community panel of students, faculty, staff and alumni, analyzes the issues and makes recommendations to the Board of Trustees. A policy document, the Statement on Investment Responsibility, guides the deliberations. The Board of Trustees has responsibility for final decisions.

We are writing to update the community on two issues related to this process.

Review of Statement on Investment Responsibility initiated; community input to be invited

Over the last few years, APIRL members and groups that have been involved in the divestment request process have raised questions and concerns about the Statement on Investment Responsibility and related procedures. These questions and concerns have centered on ambiguities in the current statement that make its requirements for divestment difficult to apply; the efficiency of the process for acting on a divestment request; and other elements of the process in general.

We take these concerns seriously. As a result, we are initiating a full review of the Statement on Investment Responsibility and related procedures, and we will be inviting input from the university community. We will consult with the APIRL on the mechanisms for soliciting this input from the community, and more information about the process for providing input will be available by Nov. 15 on the following web page:

Given the concerns that have been expressed about the current statement and related procedures, and after consultation with the APIRL chair, we will not be accepting requests for review of investment responsibility issues this academic year while this evaluation is being undertaken. Our goal is to present by the fall of 2018 a new statement and related procedures. We hope this process will lead to greater clarity for the university community on these issues, and we look forward to the community’s input.

Completion of review regarding private prison companies

The Board also has just completed consideration of a specific divestment request.

Last fall, the student group SU Prison Divest submitted a proposal for Stanford’s endowment to divest from companies that operate private prisons or are associated with the private prison industry. This is an industry in which corporations contract with state and federal governments to build and operate prisons and detention centers.

The subject is important and deserves broad discussion. The request from SU Prison Divest argues that private prison companies profit from a system of mass incarceration that has disproportionately affected minority and marginalized communities in America and has skewed criminal sentences toward imprisonment over other solutions. The equity of our nation’s criminal justice system clearly has been brought into question on many occasions in recent years. These important issues are driven in large part by the public policies underlying the system and deserve serious national discussion, including among those with expertise on our campus.

The results of our divestment review are detailed in a letter to SU Prison Divest. In brief, Stanford does not hold any direct investments in the two private prison operators in the request. We, and the APIRL, also reviewed several other categories of companies associated with the private prison industry, as SU Prison Divest requested. The Board concluded that these other companies do not meet the threshold for consideration of Board action under our policies, in many cases because it has not been substantiated that they are directly causing social injury. More detailed information is available in the letter linked above.

We think it is important to note that Stanford is actively engaged, through its teaching and research, in the national policy discussion about the equity and effectiveness of the criminal justice system. Among many examples are the field-leading work done by the Stanford Criminal Justice Center and SPARQ: Social Psychological Answers to Real-World Questions; the active work in communities being done by the Criminal Defense Clinic and Community Law Clinic of Stanford Law School; student activities including the Prison Education Project and Project ReMADE; a wide range of relevant undergraduate and graduate courses; and opportunities for public service, fellowships and internships. These activities are important examples of Stanford’s mission to contribute to the understanding of pressing issues and problems through its teaching, research and public service.