Description
Book Synopsis
More than 80% of the financial assets in the United States fall under the purview of a trustee. That's a big responsibility for an estimated 1% (around 1.5 million people) of the U.S. working population charged with overseeing investments for millions and millions of beneficiaries, public sector, and non-profit organizations. In a world proliferated by investment products, increasingly dominated by indexes, faced—particularly in the pension world—with increasing liabilities, more regulation, and a growing number of social and sustainability objectives, what's a trustee to do?
The Trustee Governance Guide is here to help guide today’s board trustee through the brave new world of 21st century investing. The book focuses on the critical aspects of the Five Imperatives: Governance, Knowledge, Diversification, Discipline, and Impact.
Based on more than a decade of research, practice, and discussions with many key decision makers and influencers across the industry, this book addresses the many topics related to better governance, greater mission-driven financial performance, and impact. The questions the book addresses include:
· What is good governance, how do we know it when we see it, and why does it matter?
· How much knowledge is necessary to be a competent board member?
· How big should my endowment be?
· What are the key elements of a diversified portfolio?
· How much does cost matter?
· What's the difference between socially responsible and ESG investing?
· Can I focus on sustainability and still be a good fiduciary?
This book provides a way for boards to improve and benchmark their own governance performance alongside their peers, and uniquely covers related investment topics in each chapter.
Table of ContentsChapter 1: Introduction
The First Imperative: Be Well-Governed
Chapter 2: Crisis
Chapter 3: Fiduciary Duty
Chapter 4: Good Governance
Practitioner Focus: Board Self-Assessment
The Second Imperative: Be Knowledgeable and Beware of Common Errors
Chapter 5 – Human Error and Behavioral Finance
Practitioner Focus – How Much Endowment is Enough?
Chapter 6 – Knowledge Not Just for Knowledge’s Sake
Chapter 7 – Origins of Financial Illiteracy
Practitioner Focus: Investment 101 and Foundation Board Basics
The Third Imperative: Be Diversified
Chapter 8 – 30,000 Products
Practitioner Focus – Cryptocurrencies
Chapter 9 – Theory Time
Practitioner Focus – Return Targeting
Chapter 10 – Over-diversification
Practitioner Focus – Why Over-complicate Things?
The Fourth Imperative: Be Disciplined and Control Costs
Chapter 11 – The Active vs. Passive Debate
Chapter 12 – Active vs. Passive-The Evidence
Chapter 13 – Cost Savings and What Really Matters
Practitioner Focus – Fee and Expense Reports: What to ask your Consultant for on an Annual Basis
The Fifth Imperative: Be Impactful
Chapter 14 – Farewell to Uncle Milt
Practitioner Focus – Doesn’t ESG Investing Pose a Conflict with Fiduciary Duty?
Chapter 15 – ESG Challenges
Practitioner Focus – What Exactly is the Difference between SRI and ESG?
Chapter 16 – Ok, I’ve Bought In…Now What?
Practitioner Focus – Writing ESG into your Investment Policy
