Why this is important.

The investment committee ensures that the institution’s financial assets are properly managed and invested.

Although every board committee fulfills a valuable role, it’s no exaggeration to state that the investment committee is one of the most important committees of the board. The financial resources available to colleges and universities— and thus their quality and competitive position— are directly affected by the success or failure of endowment management. AGB empowers members of the investment committee to develop sound investment policies and ensure they are always implemented efficiently and effectively.

Source: The Investment Committee by Jay A. Yoder, AGB 2011

Questions for boards.

These are key questions for your board to consider:

Fundamentals

Consequential Questions:

  1. Is our committee work aligned with our institution’s strategic vision, goals, and priorities?
  2. Are our committee meeting agendas concise and developed with clearly stated desired meeting outcomes?
  3. How does our committee ensure that our pools of money— charitable remainder trusts, gift annuity funds, pooled income funds, cash, reserves, state allotments awaiting use, and pension plans— are invested and managed appropriately?
  4. Does our committee have a clear investment strategy that includes a reasonable set of assumptions about a sponsoring organization’s risk tolerance and expected returns?

Source:

The Investment Committee by Jay A. Yoder, AGB 2011

Discussions

Consequential Questions:

  1. Does our committee translate our charges into annual goals and work plans that align with the board’s governance responsibilities and our institution’s strategic plan?
  2. When did our committee last discuss its composition? Are there any board members who aren’t on the committee that could be an asset?
  3. When was the last time our committee discussed socially responsible investing (SRI)?

Source:

The Investment Committee by Jay A. Yoder, AGB 2011

Relationships

Consequential Questions:

  1. Is our committee aware of the impact of issues brought before other board committees that deal with investment-related issues?
  2. Do our committee members embrace our conflict-of-interest policies? Does our committee make decisions solely and exclusively for the benefit of our institution?
  3. How effectively does our committee educate and guide all parties involved in the endowment management process: the governing board, the investment committee, consultants, and money managers?

Source:

The Investment Committee by Jay A. Yoder, AGB 2011

We carefully curated these staff-picked resources for you:

The Investment Committee

2011
Jay A. Yoder, AGB

An Investment Banking Approach to Strategic and Sustainable Business Models

Webinar On Demand
Jeff Bethke, Joe Bridy, Christopher Good, and Maureen Lawrence

All resources.