Sample Investment Policy Statement
By Chris Moran
Adapt this sample policy to fit your hospital’s investment strategy.
One of the major challenges that not-for-profit boards face is turnover among investment committee members. Finding qualified, volunteer fiduciaries to oversee the investment portfolio can be difficult, posing a significant problem for the organization. Moreover, board turnover could lead to frequent changes in investment policy strategy and management tactics.
The best way to combat this issue is to have a strong investment policy statement in place that will provide disciplined investment tenets for a consistent, strategic approach to managing the investment portfolio through successive generations of committee members.
Access tool: Sample Investment Policy Statement
Components of a well-written IPS should include, but are not limited to, the following:
- Purpose and policy review clause
- Investment objectives and constraints
- Description of responsibilities
- Fiduciary duty and conflicts of interest
- Asset allocation definitions and guidelines
- Monitoring portfolio investments and performance
- Investment manager review
Written properly, the investment policy statement (IPS) should outlast the current administration as well as multiple generations of committee members. While there will be adjustments along the way as new asset classes are introduced and asset allocation decisions are evaluated, the core of the document should remain consistent.
Chris Moran is an investment consultant, Lancaster Pollard Investment Advisory Group ([email protected]).
This article is adapted from a longer article that appears in The Capital Issue. Reprinted with permission.