Written by Johara Meyer
Photography from the Beaver Archives
A recurring roadblock that divestment campaigns at LSE have faced since the launch of the first campaign in the late 1960’s, are the various ties that members of the school’s decision-making bodies have had to the very companies LSE is being asked to divest from. From South Africa to Sudan to Palestine, students at LSE have a long history of campaigning for the university to stop investing in companies that profit from grave human rights violations. Time and time again, these campaigns have uncovered that LSE’s connections to egregious companies are not only hidden within its investment portfolio but also embedded in its governing bodies. As students demand that LSE sells-off its investments in companies involved in the continued dispossession and genocide of Palestinians by Israel (see Assets in Apartheid Report), it is important to look at past efforts to get LSE to consider the ethics of where its money goes – and who decides to put it there.
Divestment has long been advocated as the action our university must take to sever its ties to egregious activities—particularly those where states and intergovernmental bodies have failed to act, such as the genocide in Darfur or the military dictatorship in Burma (now Myanmar) in 2007.
In fact, LSE has played a not-so-minor role in making the divestment demand a central part of the toolkit of internationalist student activism. In 1988, exactly a year after students had gone into occupation demanding divestment from apartheid, our university became the first in Britain to “fully divest itself of South African-related shares”. LSE sold shares in 26 companies with a total value of £3 million, equivalent to around £8.,2 million pounds today! As the Beaver reported at the time, LSE divesting was widely celebrated with congratulations coming in from Diane Abott all the way to the National Union of Students and spurred many other universities to take similar action (see Figure 1). However, as was noted by LSE alumnus – and 60’s student activist – Martin Tomkinson, the decision to divest from companies linked to apartheid in South Africa came 20 years after LSE students first campaigned over the issue. This raises an important question: why did it take so long for the university to cut its ties to oppression?
The answer lies in understanding who holds the power to decide whether LSE sells off investments for reasons beyond financial prudence. The final call on these sorts of decisions has long been in the hands of the highest decision making body of the school. Until the early 2000’s, this was the ‘Court of Governors’ which was made up of roughly 100 members. It included a handful of students and staff members, but notably also a wide range of business executives and aristocrats (with little connection to the school). Notably, many of the school’s governors held directorships in major British businesses, almost all of which were making profits from the exploitation of Black labour through their operations in apartheid South Africa.
As one anonymous Beaver article outlined in 1971, the list of LSE Governors with interests in South Africa was expansive. Various British Lords, Earls, and bankers – from Lord Carrington to Evelyn de Rothschild – sat on the LSE Court of Governors and proclaimed to be ‘against apartheid’ while actively making profits from the apartheid system through their directorships in companies with subsidiaries or investments in the country operating under the imperialist white supremacist regime. The article was accompanied by the names of 25 governors labeled ‘‘LSE slave traders’ alongside the companies through which they held interests in South Africa and called for their resignation (see Figure 2.).
There were clear conflicts of interests between members of the Court and the demand to divest. When students once again called for the school to ‘disinvest’ from companies with subsidiaries in South Africa in 1977, the Beaver reported on the views council members expressed regarding the Disinvestment Action Committee’s demand. This included one governor who “revealed himself to be the managing director of one of the firms” who seemed to suggest that divestment wasn’t necessary, as “small non-dramatic changes” were taking place in South Africa and that “people who haven’t been there might not understand” (see Figure 3).
However, in 1987 students managed to convince LSE to agree to a process of divesting its assets in South Africa and a committee was constituted to come up with a so-called ‘Code of Conduct’ around investments tied to the apartheid state. Similar to the list of exclusionary criteria in LSE’s current ESG policy, the code defined the conditions under which the school would divest or opt against investing in a company. Still, it would take another year until LSE fully divested as the Court of Governors is said to have ‘fiercely resisted’ the inclusion of multinational companies within this criteria. Thankfully, the student campaign persisted and managed to convince the school to agree to divest not only from companies with over 5% of their operations in the country but also any company with over 500 employees in South Africa – which ensured holdings in companies like Shell and BP were also sold off.
Since the divestment campaign from South Africa, a few things have changed. Notably, the school decided to shrink the number of members sitting on LSE’s highest governing body in order to “bring the college’s rulers into closer touch with the institution”. Since 2000, the Council, made up of 25 members then and 20 members today, has been the school’s principal decision-making body. However, other things have stayed the same. Students continued to demand divestment from the exploitation of people and planet whilst LSE decision makers remained interested in upholding these ties. Indeed, the school’s poor track record on human rights continued to be the source of much scandal. In 2013, for example, LSE’s vice-chancellor Howard Davies was forced to resign over the decision to accept a £1.5 million donation from the Gadaffi regime. Similarly, the appointment of Peter Sutherland to the LSE Council in 2008 was heavily contested by students. Between 2008 and 2009 Sutherland chaired both the LSE Council and BP – the climate-wrecking British oil company. Around the same time, LSE students were campaigning to get the university to divest from the genocide in Darfur, and the Beaver reported that a member of the Investment sub-committee revealed himself as a fund manager for a company listed as the “highest offenders” in the Sudan divestment campaign ranking.
LSE today is a far larger operation, with a significantly expanded budget and a stated goal of growing its endowment to £1 billion. Unfortunately, the school’s entanglements in human rights violations only seem to have grown alongside its financial ambitions. As the “Assets in Apartheid” report revealed last year, the school held at least £89 million in egregious investments from crimes against the Palestinian people to the global arms trade and rumours are that this figure has only increased over the past year.
For over 55 years, LSE students have campaigned tirelessly to get LSE to invest its money more responsibly. With the review of LSE’s ESG policy coming to a close later this year, all eyes are on Council. Council members must confront their own ties and commit to an investment policy that takes seriously students’ demand to stop investing in companies violating human rights and international law whether in Palestine or anywhere else. LSE, it’s time, divest now!
