As its imposing title suggests, THE INVESTMENT COMMITTEE GUIDE TO PRUDENCE is a comprehensive overview of the roles and responsibilities within the committees that create, implement, and oversee pension and investment plans for an organization, as well as a detailed guide to best practices and considerations for developing optimal strategies enabling each role to achieve its goals and objectives. Author Jonathan J. Woolverton, CFA, brings over 50 years of experience in the investment field to this guidebook, which walks readers through the components of an investment committee, and the factors an organization should consider to increase the odds of successful results.
THE INVESTMENT COMMITTEE GUIDE TO PRUDENCE is organized in a logical, systematic fashion, defining the roles and functions of a typical investment committee, such as plan sponsors and investors, as well as associated parties such as stakeholders, service providers, and managers. Woolverton lays out organizational hierarchies of pension plans and investment funds, describes professional resources relevant to plan sponsors (such as accountants, auditors, and compliance officers), and walks readers through each stage of setting goals and objectives, explaining the most relevant considerations.
From that foundation, Woolverton goes on to cover potential pitfalls—factors such as unclear guidelines and poor communication that can negatively impact an investment portfolio, or service provider conflicts of interest—benchmarks to measure success, and the pros and cons of different approaches, such as active or passive investment strategies, and whether to manage funds internally or through an external manager. Woolverton does not make recommendations on specific asset classes, internal vs. external management, active vs. passive strategies, or investment vehicles, leaving these decisions to investment committees depending on their individual objectives, histories, and risk appetite. The book’s objectives center around the theme of prudence—increasing the odds of success while minimizing risk—and arming investment committees with sufficient information to create and maintain a successful pension or investment fund.
THE INVESTMENT COMMITTEE GUIDE TO PRUDENCE is not an all-in-one investment handbook, nor does it attempt to be. However, as a manual for plan administration and management, the book is an invaluable resource for any organization seeking to establish an effective investment program.
~Edward Sung for IndieReader