Can we trust the trustees?

Will Royce

Nathan Sleeper ’95 is the CEO of private equity firm Clayton, Dubilier & Rice (CD&R), a role he stepped into in 2020. In 2018, CD&R acquired PowerTeam Services, LLC, a holding company in the natural gas industry. That company, renamed to Artera Services last year, in turn owns a plethora of environmentally harmful operating companies, including KS Energy Services, which prides itself on “provid[ing] best-in-class natural gas distribution”; Feeney Utility Services Group, the self-proclaimed “leading natural gas utility service provider in the Northeast and Mid-Atlantic”; and Miller Pipeline, which calls itself “a premier natural gas distribution contractor offering pipeline construction.” Sleeper, because of his role at CD&R, sits on the board of directors at Artera. 

Sleeper is also a member of the College’s Board of Trustees and its investment committee, which, according to the College’s website, is the body with “the highest level of oversight” over the College’s assets. The committee is made up of just six members from the board, in addition to two emeritus members. Some of these members have business interests in the fossil fuel industry — even as students are calling on them to support a formal commitment to divestment, a move that would require a disavowal of an industry they serve.

Last year, former financial journalist and alumni Peter Koenig ’66 wrote a letter to the editor in the Record about the entrenched mindsets of the financial professionals governing our endowment, specifically calling attention to Andreas Halvorsen ’86 and Michael Eisenson ’77. Both are members of the committee, with the former being a trustee and the latter being an emeritus member. Halvorsen is the CEO of hedge fund Viking Global Investors, which, according to Forbes, massively increased its investment into natural gas company Calpine Corp in 2016. Viking Global ended up holding a 5.7-percent stake in Calpine, with the stock accounting for 1.3 percent of its portfolio. At the time, the 20.5 million shares were worth about $285 million. Similarly, as Koenig notes in his letter, Eisenson’s private equity firm had investments in RGL Reservoir Management, a company that manufactures technology to assist in extracting oil from tar sands, at the same time that divestment activism was at its height in 2015.

The investment committee also has three additional advisory committees, with the real assets advisory committee having the most to do with decisions about fossil fuel investments. This advisory committee has just four members, none of whom are trustees. It includes Charlie Thompson ’83, CEO of Nuverra Environmental Solutions, which refers to itself as — who would have guessed it —  an “oilfield logistics” company. Thompson is also a partner at PinHigh Capital Partners, an investment company that, according to Thompson’s bio on Nuverra’s website, specializes in “smaller private oil service and exploration and production investments.” If you go to either of Thompson’s companies’ websites, the first thing you’ll see is an oil well.

Sleeper, Halvorsen, Eisenson, and Thompson have conflicting mandates. Their business interests are at least partially aligned with the fossil fuel industry, but their duty to the College is to uphold its sustainability principles (which state that the College is “committed to protecting and enhancing the natural and built environment”) and provide a better future for Williams students. Divesting from fossil fuels and disavowing the industry is a necessary step towards realizing this better future. 

Peer institutions moving towards total divestment, such as Amherst, have often made public commitments to the cause, a mechanism that pushes them to follow through. Williams, however, has not formally committed to its recent move in any way, providing no timeline, no official statement, and no plan for ridding the endowment of fossil fuel investments. Provost Dukes Love even implied that the investment committee’s recent decision is non-binding, telling the Record last week that the strategy for managing the endowment “shift[s] all the time.” Since Love indicated that the investment committee’s decision to stop new investments in fossil fuels was primarily financial, presumably the College could resume investing in the fossil fuel industry in the future if it deems it financially beneficial. 

The absence of a formal commitment to divest by the College may be influenced by investment committee members’ ties to the fossil fuel industry. It would be difficult for committee members with fossil fuel ties to have their names be publicly associated with the committee’s decision to (at least for the time being) stop investing in fossil fuels. A significant part of the larger divestment movement’s goal is to make the fossil fuel industry be seen as an illegitimate investment. How are trustees investing or working in the fossil fuel industry supposed to then validate this movement?

Thus, if the College is considering divesting from fossil fuels and publicly committing to it, a move that would cast aspersion on the fossil fuel industry, trustees and advisors with financial ties to the industry cannot disinterestedly consider divestment. The College does have a policy regarding conflicts of interest for its trustees, but it is somewhat toothless. When a trustee “has a financial interest, direct or indirect, in the business of the college,” the policy reads, the trustee must tell the president and the board chair, who then decide if there is a conflict of interest. 

It might be argued that, by my logic, any trustee holding any stock in any industry would be considered to have a conflict of interest, but this is hardly the case. What I am saying is that trustees with an interest in the continued success of, for example, the real estate industry, would have to recuse themselves from considerations around whether or not the College should divest from and disavow the real estate industry. It would be particularly important for these trustees to recuse themselves if the College’s potential divestment from real estate were part of a larger movement across colleges and endowments to remove investments from real estate. Not doing so would allow these trustees to have significant influence over the College’s position within a mass movement that is attempting to stigmatize an industry in which they have interests.

All members and advisors of the investment committee with an interest in the success of the fossil fuel industry, whether that be through holding stock or running an oil company, will not be able to support a public commitment to divestment. But such a commitment, alongside divestment itself of course, is essential if the College is to apply its sustainability principles to its endowment. Unfortunately, too many people with the power to make this move have interests in the industry that it would necessarily disavow.

Will Royce ’24 is from Los Angeles, Calif. He is a member of Williams College Young Democratic Socialists of America’s (YDSA) Divestment Committee, a student group advocating for the total divestment of fossil fuels from the College’s endowment.