Rich Todd, Managing Principal & Co-Founder
Wendy Dominguez, MBA, Principal, Co-Founder
In working with over 100 investment committees in our careers and as sitting members of boards and investment committees for various non-profit entities, we have experienced the good and bad of committees. While committees vary in their responsibilities, consistent standards of conduct apply to all types of organizations that are responsible for fiduciary assets. For both retirement plans and non-profit investment committees, the following principles apply.
Eliminate conflicts of interest
While conflicts of interest are a seemingly obvious danger for a board or investment committee, they are surprisingly common. If a committee member, his or her family, or business receives an economic benefit by being a member or by any committee decision, they are conflicted. Further, a conflict exists if a decision may benefit any other organization with which they are associated. It is not uncommon for board members of community foundations to join other non-profit boards to encourage the movement of those assets to the community foundation. This is a conflict of interest, and simply abstaining from voting after the wheels are greased is unethical.
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