Wednesday, September 2, 2009

Maubossin on Investment Committees

Estimates suggest that investment committees oversee over $5 trillion in financial assets worldwide. 2 Yet there is no fully developed set of ideas on how to best

create, manage, and evaluate an investment committee. Sure, there have been publications about how committees should define and stick to investment objectives, and how to avoid behavioral biases. 3 But a thorough discussion of the structure of an effective committee requires more depth and rigor than what we have today. Two heads may be better than one, as they say, but only if they operate effectively. This essay is about how to create a productive investment committee. Topics include how to structure a committee, the importance of classifying problems, how to best gather options, the importance of leadership, methods to decide, and pitfalls to avoid. I have included a checklist at the end. Since most investment committees are already up and running, many of these topics will be helpful in improving results.

Read the .pdf