FAQs -Timeless Strategies of Highly Effective Investment Committees
These FAQs published by the Association of Governing Boards (AGB) are based on an interview conducted by Nikki Kraus, President and Chief Client Officer, at Strategic Investment Group, with Charles “Charley” Ellis, Founder of Greenwich Associates and Former Chair of the Yale University Investment Committee. In the interview, they discuss several key aspects related to investment committees. Here are some highlights:
- Board Composition: The composition of an investment committee is crucial. Having a diverse group of individuals with complementary skills and expertise ensures better decision-making.
- Investment Policy Statement (IPS): The IPS serves as a guiding document for the committee. It outlines the investment objectives, risk tolerance, and asset allocation strategy. A well-crafted IPS helps maintain consistency and discipline.
- Institutional Memory: Effective committees recognize the importance of institutional memory. Learning from past experiences, both successes and failures informs better decision-making.
- Assessment and Review: Regularly assessing the committee’s performance, investment results, and adherence to the IPS is essential. Adjustments may be needed based on changing market conditions or organizational goals.