2008 Woodie Awards
Pooled funds fall outside revised ethical guidelines
Megan Rieger, Staff Writer
Issue date: 11/21/06
Last Updated: 12/26/07
Whitworth's ethical investment guidelines were updated during the Board of Trustees meeting last month. The changes address the college's investments in pooled funds, which contain many different shares invested in by several firms.
A mutual fund, for example, is one type of pooled fund within the broader designation.
"You can have pooled equity [stock], you can have pooled bonds, you can have pooled real estate, you can have pooled pork bellies, you can have pooled timber land," Tom Johnson, vice president of business affairs, said.
The diverse nature of pooled funds makes it difficult to ensure the college's investments are untainted.
"It's very difficult to say that we're absolutely positive that we aren't invested in stocks within these pool funds that aren't within the bounds of the [ethical] guidelines," endowment committee member and Trustee Ray Lawton said.
Those ethical investment guidelines, last updated in 1993, outline the moral responsibility of the Trustees and financial officers of the college to make financial decisions consistent with the mission of Whitworth. The document includes prohibitions against knowingly investing in corporations that are linked to violence, engaged in human rights violations, associated with gross pollution or involved in fraudulent action.
Whitworth hires money managers, commonly known as brokers, to make stock investment decisions for the college. Those money managers are expected to follow Whitworth's ethical investment guidelines, Johnson said.
Yet when it comes to pooled funds, individual funds within the larger group cannot be managed.
"We have no authority to tell a mutual fund that they can or cannot buy a certain stock," Johnson said.
The new ethical guidelines address the ambiguous nature of pooled funds. The document states that "investments in pooled funds, which the college and foundation may select for diversification or cost-management purposes, cannot be controlled or modified to comply with these Ethical Investing Guidelines."
A mutual fund, for example, is one type of pooled fund within the broader designation.
"You can have pooled equity [stock], you can have pooled bonds, you can have pooled real estate, you can have pooled pork bellies, you can have pooled timber land," Tom Johnson, vice president of business affairs, said.
The diverse nature of pooled funds makes it difficult to ensure the college's investments are untainted.
"It's very difficult to say that we're absolutely positive that we aren't invested in stocks within these pool funds that aren't within the bounds of the [ethical] guidelines," endowment committee member and Trustee Ray Lawton said.
Those ethical investment guidelines, last updated in 1993, outline the moral responsibility of the Trustees and financial officers of the college to make financial decisions consistent with the mission of Whitworth. The document includes prohibitions against knowingly investing in corporations that are linked to violence, engaged in human rights violations, associated with gross pollution or involved in fraudulent action.
Whitworth hires money managers, commonly known as brokers, to make stock investment decisions for the college. Those money managers are expected to follow Whitworth's ethical investment guidelines, Johnson said.
Yet when it comes to pooled funds, individual funds within the larger group cannot be managed.
"We have no authority to tell a mutual fund that they can or cannot buy a certain stock," Johnson said.
The new ethical guidelines address the ambiguous nature of pooled funds. The document states that "investments in pooled funds, which the college and foundation may select for diversification or cost-management purposes, cannot be controlled or modified to comply with these Ethical Investing Guidelines."
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