What skills should investment committee members possess?
Managing an investment decision-making process demands skills of a scientific nature and abilities that are best described as artistic. Institutional investors are required as a matter of prudence to take into account qualitative and quantitative inputs. The current high-volatility environment places an added emphasis on quantitative inputs, which invokes the “scientific” aspect of decision making management.
Prudence drives consistency
In an era were proving prudence is an imperative for investment committees, it’s no surprise that hidden tendencies have crept into their processes. We’ve observed that more qualitative factors are influencing decision-making. Media reports, for example, often trigger emotional responses that contribute to “out of policy” decisions.
Re-visiting the process
In growing numbers, institutional investors are revisiting their investment decision-making processes in order to handle rapidly changing events. Now may be the best time for investment committees to conduct such an evaluation. At stake is the need to sustain a repeatable methodology that maintains a positive impact on their goals.