Oxford’s Huawei Predicament: A Very Avoidable Email

The world’s elite educational institutions are picky about their students. They can afford to be picky about their partners too.

Last week, Oxford University students received an unexpected email. The university had “decided to suspend Huawei as an approved gift donor/research sponsor”. Those who found time to follow the news between tutorials would have recognised Huawei as the embattled Chinese telecoms giant whose CFO is currently facing sanctions-busting charges in the US. Governments worldwide have long suspected Huawei of spying on behalf of the Chinese government, and the US department of justice is reportedly planning to launch a fresh criminal inquiry into the company’s alleged theft of trade secrets.

But for many computer science concentrators, the Huawei name mainly conjured up a sought-after research grant, or a ticket to a conference. They, and the wider UK public, would have expected the university to have a handle on what Huawei was before accepting any money from the firm. Oxford’s staff might feel hard-done-by – why are they of all people getting this negative attention? The university is far from the only UK organisation to sign a deal with Huawei – rival Cambridge accepted USD 1 million to fund its computer laboratory, and much of UK’s telecoms infrastructure bears the Chinese company’s logo.

A big target of criticism has been the university’s claim that they were suspending new donations from the firm in response to “heightened uncertainty”. Yet Huawei has been generating heightened uncertainty for years, over its alleged links to the PRC intelligence apparatus, and over its alleged dealings in sanctioned jurisdictions. A careful read of three-year-old government records from the US, India, Australia and even the UK would have identified all manner of security concerns swirling around Huawei, concerns that have only grown louder over time.

Reputational due diligence: no longer an elective course

The controversy over Oxford’s dealings with Huawei speaks to a sea change in how universities see themselves, and how the world sees them. In a globalised education market, elite institutions have understood that they can no longer survive as isolated, cloistered institutions serving domestic students. Transforming themselves into global brands, they have spent millions setting up overseas offices to compete for the best students and, just as importantly, win lucrative endowments. These help them maintain the quality of their research and support worthy goals like “needs-blind” admissions and generous financial aid. But promoting a brand is not enough; you have to protect it. Instead of waiting for a moment of “heightened uncertainty” to back out, top-tier institutions, such as members of the Ivy League and UK’s elite Russell Group, must take a proactive approach to vetting potential partners and donors in the first place.

It is a lesson also being learned across the Atlantic. Last week, it was reported that the Massachusetts Institute of Technology (MIT) had quietly dropped the sanctioned Russian oligarch Victor Vekselberg from its board of trustees. Vekselberg was previously a member the William Barton Rogers Society, a group of elite donors to the university. Before it was sanctioned in 2018, his company Renova gave scholarships and financial aid to MIT students.

Universities like Oxford and MIT can afford to be picky. They are among the world’s premier educational institutions, whose names confer immense prestige on their partners in China, India, or other overseas markets. If they can spend countless man-hours picking from among the world’s most promising students, should not the same level of care extend to choosing their benefactors?

At the risk of lecturing the lecturers, universities should be more confident about saying “no” to overseas partners that present potential compliance and sanctions risks. Here, they can take lessons from multinationals operating in more heavily regulated sectors, who have developed sophisticated reputational due diligence programmes that allow them to veto a deal well before any damage is done. Oxford should be praised for having the confidence to pull the plug with Huawei now, but it and other universities must begin setting external partners a much sterner entrance exam in future.