I. The Community Engagement Policy for Socially Responsible Investment Considerations and Divestment 

This Policy is subject to the College’s Investment Committee’s Statement of Purpose and Policies (approved May 18, 2022). To the extent that a section of this Policy is inconsistent with the Investment Committee’s Statement of Purpose and Policies, the Statement of Purpose and Policies will control. As an Ohio nonprofit education corporation and a Sec. 501(c)(3) tax-exempt organization, the College’s management of its endowment must also adhere to Ohio’s Uniform Management of Institutional Funds Act (“UMIFA”) and applicable federal, state, and local law and regulations. 

Investment Statement of Purpose and Policies: Approved May 18, 2022 

Community Engagement Policy for Socially Responsible Investment Considerations and Divestment: Approved October 25, 2024 

II. Guidelines

A. Introduction

The Trustees of Kenyon College (the “Trustees”) have sole responsibility for all investment decisions for the Kenyon College Investment Pool (the “Investment Pool”), including establishing College policy on all investment-driven social responsibility issues that may be raised by members of the Kenyon community. “At Kenyon, we build strong foundations for lives of purpose and consequences. Kenyon harnesses the transformative power of a liberal arts education — engaging in spirited, informed and collaborative inquiry — to form a deeper, more nuanced understanding of the world and all who inhabit it.” As such, the funds of the College’s Investment Pool are to be invested and used to support this mission to the greatest extent possible as outlined in the Investment Committee’s Statement of Purpose and Policies While the Trustees have the fiduciary obligation to invest the College’s Investment Pool so as to maximize College resources, the Trustees recognize that in unique circumstances it may be appropriate to consider divesting the endowment of specific corporate securities based upon thoughtful, thoroughly considered, and sustained social responsibility concerns. 

In making any such determination, the Trustees recognize the need for a clear process that allows for careful study and community input and articulated guidelines to inform the Trustees in their decision-making. No process or set of guidelines, however, can be expected to address all situations that might arise. For that reason, any proposal will be evaluated using this process and these guidelines as a basis, but recognizing that all decisions will be made on a case-by-case basis. The Trustees reserve the right to interpret the process, the guidelines, and the interest of the College as broadly or narrowly as they see fit, consistent with the By-Laws of the College, the College mission and policies, and applicable external laws and regulations. 

B. Basic Principles

  1. The Trustees of Kenyon College have the sole responsibility for making investment decisions for the College’s Investment Pool, which, consistent with their fiduciary status and requirements of UMIFA, must be made so as to maximize the resources of the College in support of its mission. 
  2. Given the Trustees’ fiduciary responsibility, there is a strong presumption against the College making investment decisions based upon political, social, or ethical positions held by some members of the community. 
  3. The Trustees recognize that there may be extraordinary circumstances in which the College determines that it should not hold direct financial interests in a certain company or companies based upon concerns that the activity of the company or companies is considered by the Kenyon community to be morally reprehensible, creating a substantial social injury. Divestment will be considered in these cases, according to the policies and guidelines set forth below. 
  4. The purpose of this selective divestment policy is not to make political statements, censure governments, or put pressure on others to adopt particular policies. Rather, the purpose of divestment is to separate the College from companies whose conduct is objectionable to the College community, and so inconsistent with core College values, that the College does not wish to be associated with the conduct in any way. Divestment, as an option, should only be adopted after all other options to address the community’s concerns have been considered and found unsatisfactory. The Investment Committee (IC) of the Board of Trustees believes that shareholder engagement is generally superior to divestment in effecting change in portfolio companies. Shareholder engagement may take many forms, including proxy voting and direct communication with company management. Divestment should be pursued only when all possible shareholder engagement efforts have been explored and considered. 

C. Process

  1. If members of the Kenyon community, defined as students, faculty, alumni, or staff, believe that a proposal for divestment of specific corporate securities is warranted, they may present a written proposal to the Investment Subcommittee on Divestment (ISD) for consideration. The proposal for divestment must have the support of a broad and sustained consensus of the College community. 
  2. The ISD will consider any written divestment proposal received at a future ISD meeting but before the next regularly scheduled in-person IC meeting following receipt of the proposal. Each written proposal, once received, will be given serious consideration by the ISD. 
  3. The written proposal must relate to a specific company or companies, and not to an entire industry. 
  4. The written proposal must explain the activity of a company that is morally reprehensible and the substantial social injury caused. The company or companies identified for divestment must have a significant, clear, and undeniable nexus to the moral evil. 
  5. The written proposal must explain how divestment will contribute to mitigating the substantial social injury. 
  6. The College must hold the securities of the portfolio company in question directly in a separately managed account. Securities held indirectly through the College’s investments in private commingled funds, mutual funds, or exchange traded funds are excluded from divestment consideration due to structural reasons. The ISD and/or College’s Outsourced Chief Investment Office (“OCIO”) may consider redeeming from funds with material indirect exposure to securities the ISD has deemed problematic investments and where the manager consistently invests in a way that conflicts with this policy. 
  7. The ISD should consider not only whether divestment is justified, but also whether there are alternative means by which the College can better address the social responsibility concerns at issue, including letters to management and/or proxy voting. 
  8. The ISD will make a determination as to whether there is a sufficient basis for further consideration of the proposal, taking into consideration the divestment policies and guidelines. If the ISD concludes that there is insufficient evidence supporting the proposal, then it shall so inform the proponents and no further action need be taken. 
  9. If the ISD concludes that there is a reasonable basis to proceed, it will refer the matter to the IC. The IC will further study the proposal to determine whether, in the view of the IC, the proposal meets the guidelines of the Community Engagement Policy for Socially Responsible Investment Considerations and Divestment. 
  10. If the IC concludes that the proposal does not satisfy the guidelines, then no further action is necessary, other than notifying the ISD and the proponents. If the IC believes some action is warranted, it should present its views to the Executive Committee of the Board of Trustees (the “Executive Committee”) to determine whatever action is appropriate under the policies and guidelines. 
  11. If the Executive Committee concludes that a divestment decision should be made, a recommendation for divestment will be submitted to the full Board of Trustees. The Board of Trustees will then vote on the divestment and the community will be informed. 
  12. Passive Index Funds or Exchange Traded Funds (“ETFs”) — In addition to single-name securities, Kenyon’s endowment may consist of holdings of index funds and/or ETFs. Index funds are commonly held investment funds that have broadly diversified portfolios that track specific benchmarks, such as the S&P 500. The sponsor of the index fund does not make specific bets on the underlying securities; rather, the basket comprising the portfolio is based on a passively determined cross-section of the market the benchmark seeks to capture. Index funds and ETFs are employed by the OCIO as a passive portfolio management tool to rebalance the Endowment and not as an active strategy. Unlike relationships with third-party investment managers, the OCIO does not engage or interact with sponsors of index funds and ETFs.

    Any single position held by the Index or ETF typically would represent only a very small percentage of the endowment, thus, any single company represents a very small percentage of the endowment. In addition, because rebalancing can occur as often as daily, the endowment’s exposure to a given index fund could change frequently. Given the purpose and limited use of index funds and ETFs in the endowment, and their importance as a portfolio management tool, Kenyon’s Community Engagement on Responsible Investment Policy does not prevent the holding of such funds. 
  13. Disclosure — Kenyon’s policy is to preserve the confidentiality of its endowment holdings, chiefly to honor its contractual obligations to the OCIO and third-party investment managers. Kenyon’s investment partners are among the best in the world, and part of their competitive advantage (and therefore Kenyon’s) is that they are skilled at finding differentiated investments. Even when contractually permitted, the disclosure of Kenyon’s holdings that are not publicly available would diminish that competitive advantage. In addition to maintaining the confidentiality of portfolio holdings, Kenyon seeks to maintain the confidentiality of its manager relationships. Because a key ingredient to Kenyon’s success is identifying the best investment managers, disclosing those relationships would likely increase competition for access to those managers. 

D. Options

In considering the advice of the IC regarding a proposal for divestment, the Trustees may take any of the following actions: 

  1. Direct the divestment of identified securities held in the name of the Trustees of Kenyon College either on an unconditional basis, or for some limited period of time. Additionally, share the College’s desire to adhere to this investment philosophy with the investment managers of co-mingled or pooled funds in which the College invests. 
  2. Refer the issue to the IC to determine if a more effective or preferred strategy would be to continue to hold the corporate securities and express the College’s view through the proxy voting process or by otherwise expressing the College’s view with a management letter or other vehicle in an effort to change the behavior that the Trustees determine to be the cause of substantial social injury. 
  3. Refer the matter back to the ISD to review and resubmit the matter, if they believe appropriate, after some period of time. 
  4. Determine that in the exercise of their fiduciary responsibilities, it is not consistent with the College’s mission or interest to take further action.