An area of significant learning for me this year was my work supporting an Investment Committee through a significant decision around their endowment.
What I didn’t realize, was that the leader of the committee had a certain point of view and as a result was uninterested in taking the time to ask the committee to make explicit their beliefs. For example, in conversations with another committee member, I realized we weren’t asking some fundamental questions:
- Do we believe faith-consistent / responsible investing can be done without sacrificing return?
- Do we believe we can do impact investing without sacrificing return?
- Is faith-consistent / responsible investing something:
- we do at a minimum to comply with Church teaching or
- core to who we are and we should strive to be thoughtful
- Do we want parts of our portfolio to be significant active management or do we prefer passive?
- Do we want significant “positive” screening (“Best in Class”, ESG) in addition to the negative screening we’ve been doing?
- What are views on monetary policy over the next 1-3 years and how (if at all) should that influence our decisions?
Each Committee member was coming from different contexts. Most had roles guiding investment decisions in other organizations and with distinct mandates, though some unifying identities.
My Big Takeaway: Take the Time
Through this process of supporting this finance committee — the biggest takeaway was just how important it was to recognize the different beliefs of the committee members.
As I think about how groups make decisions, I realize the decision to codify their “investment policy statement” and their decision to select an investment manager are among the most significant.
If I were to do this again, (and if you’re in the process of doing something similar), I would begin by putting together an “Investment Belief Survey” — along the lines of this draft I was given. I would ask all committee members to respond and then I would take the time to meet with each one to flesh out where they felt high conviction and where they were open to hearing other perspectives.
Do we believe Active Management can add value over time?
Organizing a survey can helps you see where your folks are coming from. And it can help you see the work (formation, training, individual conversations, values alignment) you may want to do, prior to making a significant decision.
As I got deeper into the work with this Committee to see, I began to see not just the depth of conventional assumptions/believes, but also the fear (anxiety / insecurities) of leaders.
For some, the feeling may have been that they are out of their depths.
For others, they’ve been doing things a certain way with other institutions/ contexts, that when they’re asked to be more mission-driven, or faith-driven, anything that varies from the norm they’ve been so conditioned for, feels imprudent.
What takes real work to highlight — and this is why I lean so deeply into deep formation — is to help a group make decisions with investments that actually align with what they actually value.
The investment world can feel so opaque.
To understand what you really believe about the future and put that into practice takes an extraordinary amount of work — especially if what you believe it will push conventional finance & investing practices to do something different.
It is possible, but it takes tremendous confidence, clarity, and conviction.
A significant question I’m carrying this year is this:
Can we design an investment belief survey to expose the fear / insecurity / anxiety that prevents finance committees’ from actually investing their values?