What Is Governance and Why It Matters

For institutional investors, governance is the crucial element that often defines the success of an endowment or pension plan. We offer a primer to the basics of investment governance and its significance.

Functions of The Investment Committee and The Relationship With The Staff

The primary responsibility of the investment committee is approval of a fund’s investment objectives. Rather than a group of financial experts, it requires individuals who are open to learning and are dedicated to meeting the needs of the institution. We detail the responsibilities of the investment committee and offer instruction on appropriate interaction with the Chief Investment Officer and staff to achieve the goals and objectives at hand.

Committee Meetings

While the investment committee is ultimately responsible for investment decisions, it dedicates a relatively small amount of time to the fund. As such, committee meetings must be conducted with focus, direction, and efficacy. We outline how members should prepare themselves, as well as how to formulate an agenda for discussion.

Meeting and Evaluating Managers

Meeting investment managers and evaluating their performance are topics that deserve particular attention. Investors must be aware of the pitfalls of benchmarking alternative investments and the dangers of drawing conclusions from interviews with the investment committee during the selection process.