Welcome CACUBO 2012 Annual Meeting Attendees

Best Practices for Investment Committees

Investment Committees are responsible for the oversight of an organization’s investment program.  In fulfilling their duties, Investment Committee members are expected to act as “prudent investors”.  But what does that really mean?


To act as a prudent investor means decisions were properly and thoroughly considered and that a reasonable determination was made at the time the action was taken that it was consistent with the investment program’s objectives.

The best way to demonstrate prudent investment practices were followed is by observing InvestingByNumbers’ Three PILLARS of PRUDENCE©


PILLAR #1 – Make Decisions Using a Prudent PROCESS

Investment Committee actions should have a well-defined process in place to prudently implement the organization’s objectives and policies, and to support the investment decisions made by Committee members.  The session will cover nine key process elements used in the creation, implementation and monitoring of a sound investment program including Governance, Concepts, Policy, Due Diligence, Portfolio Management, Expenses, Reporting, Performance and Stewardship.

PILLAR #2 – DOCUMENT Actions to Show the Process was Followed

Documentation is the foundation of sound governance and prudent decision-making.  The session will cover what should be included in Investment Committee minutes and other primary documentation to keep on file supporting a reasonable and adequate basis existed for committee decisions including, but not limited to request for proposals (RFPs), due diligence files, manager reports, consultant reports, fee analysis, commission analysis and policies (proxy voting, soft dollar, conflict of interest, sustainable and responsible investing).

PILLAR #3 – Perform OVERSIGHT at Reasonable Intervals

Investment Committee members are charged with high-level supervision of investment assets — the day-to-day management of the assets is typically delegated to investment professionals. Notwithstanding this delegation, the Investment Committee remains responsible for ensuring the actions of these delegates have been in compliance with their mandates and is consistent with the objectives of the investment program.  The session will cover what actions constitute adequate oversight and will explain how to verify whether or not your investment manager is a fiduciary.


InvestingByNumbers’ Three PILLARS of PRUDENCE© are key components of a sound investment program that drive successful outcomes.