The Art of Effective Governance: Avoiding Investment Committee Pitfalls

June 23, 2023

Key Takeaways

  1. Practicing good governance is easier said than done. Despite best intentions, investment committees can easily fall into well-documented traps that derail constructive stewardship.
  2. In GEM’s experience, failings in investment committee effectiveness typically stem from avoidable breakdowns of people, processes, or behaviors; these manifest as either loss of integration with the institution, unhealthy action bias, or a failure to sort what’s relevant from what isn’t.
  3. Avoiding these pitfalls in the first place is the best way to improve an investment committee’s effectiveness.

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