Defining Better Governance for Endowments and Nonprofits

If you polled a room of 30 people, you would likely receive 30 different definitions for “governance,” with each one helping build the narrative of what governance holistically is. FEG focuses on partnering with institutions and assisting them in making investment decisions. Simply put, governance is the practice of making “better” decisions, which can lead to “better” outcomes.

What is the Best Governance Model?

There are a number of great resources available, including books, podcasts, and whitepapers, that provide information on governance. However, FEG’s stance differs somewhat by looking beyond “best practices.” Rather than ascribing to the belief that there is a singular governance model that works best for everyone, we seek to match the model with the needs of each individual organization. We believe, there are a variety of ways organizations can improve their own governance practices.

Learning from Adam Grant’s Think Again—a past FEG book club selection—we do not believe there are “best practices,” but rather “better practices” that can be implemented by organizations seeking to increase their efficiency and output. What constitutes “better” would depend on the organization’s service model—i.e., consulting, hybrid, or outsourced CIO—as well as many other factors distinct to the organization.

Defining Better

The management of investment portfolios is a challenging task that boards and investment committees take on in varying capacities. Governance within this context is especially tricky because it straddles the line between the numbers and people, facts and emotions. FEG strives to support organizations in identifying and establishing better practices for their unique circumstances, which in turn will allow them to make better decisions and help them achieve better outcomes.

We are fortunate to work with clients that span a variety of organization types, including higher education institutions, community foundations, healthcare organizations, religious entities, retirement plans, and family offices, just to name a few. Further, we serve organizations in varying capacities, ranging from serving as an organization’s outsourced CIO (OCIO) to the more traditional advisor/consultant role of providing advice to committees. We are therefore well-positioned to not only understand the unique needs of different organization types, but also offer “better practices” for different service models.

To that end, FEG is excited to announce an education focus on governance which will include podcasts, surveys, and thought papers. This will encompass a variety of topics, spanning the roles and responsibilities of all stakeholders, meeting structures, and other factors that go into the investment decision-making process—all with the goal of helping committee and board members and leaders make better decisions. Let us help you in establishing sound governance and improving your processes so that you can focus on growing your organization.

Governance Resources

Investment Committee Governance

Many institutional investors face challenges in finding qualified investment committee and board members.  Learn how peers source members, what skills they look for, and average committee structure and size. 

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Governance Framework

Governance serves as a foundation upon which an organization builds different roles and processes. Learn key factors for better governance, including clear guidelines for decision-making, delegation, and accountability. 

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Understanding Your Fiduciary Duties

As a governing fiduciary, you and your fellow investment committee members are charged with acting solely in the best interests of participants and beneficiaries for the exclusive purpose of providing benefits.

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Questions on Governance?

Do you have any questions or dilemmas related to governance? We would love to hear from you, as well as share additional resources