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Business Officer Magazine
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Benefits of a Backward Look by the Board’s Investment Committee

It can be far more difficult to evaluate the work of a voluntary committee than that of peers and staff. But, for the board’s investment committee, a look in the rearview mirror can reveal areas of opportunity, the need to reassess individual responsibilities, and ways to improve the group’s overall effectiveness.

By Carole Schweitzer

In their December 2012 Business Officer article "Piloting the Portfolio," authors David Bell and Judith H. Van Gorden stress the value of establishing specific structures and formal statements to inform the work of higher education board investment committees. "Guide the investment committee with a written policy that covers all aspects of the organization's investments and demonstrates compliance with statutes that provide guidance for institutional investing," advised Bell, former vice president of government and community relations for Case Western Reserve University, Cleveland, and director of federal government relations at KeyCorp; and Van Gorden, former chief financial officer, Arizona State University Foundation, and chair of the NACUBO Endowment Management Forum.

Just as important, they note, is a periodic self-assessment, including review of (1) the college or university investment policy, (2) the qualifications of the staff and any investment consultants who may be involved, and (3) the performance of the committee members. The goal should be to ensure that all members of the committee are fully engaged and that the committee, the staff, and any outside consultants are adhering to the investment policy and procedures that have been established. Assessing the distribution of roles and responsibilities also helps in recognizing the need for any changes or adjustments in assignments that would improve overall processes and performance.

            A number of online tools are available to guide the self-assessment evaluation.

  • Fiduciary 360 provides on its Web site a document with guidelines for a self-assessment of fiduciary excellence.This self-administered survey, consisting of 22 questions, is intended to "assist: (1) an investment steward in analyzing how well the organization meets a defined global fiduciary standard of excellence; and (2)  investment stewards in improving their long-term investment performance."
  • The Council on Foundations, a national nonprofit association of more than 1,700 grantmaking foundations and corporations, has developed a handout adapted from earlier work by the North Carolina Center for Nonprofits and the Center for Nonprofit Management, Nashville. The self-assessment document asks participants to rate about two dozen committee activities on a scale of 1 to 5, indicating satisfaction levels from No. 1 (very dissatisfied) to No. 4 (very satisfied)—and No. 5 (not sure).

No matter what form of assessment the investment committee administers, the most important aspect of such self-appraisal comes after the fact, when the group uses the information to craft suggestions to improve its future performance.

CAROLE SCHWEITZER is senior editor for Business Officer.