Taking Better Control: Opportunities to Build GovernanceIn institutional investment, ‘governance’ describes the system of decision making and oversight used to invest the assets of a fund. Previously published research has shown that the competitive and complex environment of institutional fund management requires good governance in order to be effective.* The work by Clark and Urwin on best-practice governance identified 12 factors common amongst leading edge funds, one of which was a clear separation of governing and executive functions, with a strong culture of accountability.
Furthermore the executive function requires a high level of investment competency, enabling the funds to implement and monitor complex investment arrangements. The use of an investment executive operating in real-time decision making is necessary to implement the most ambitious investment arrangements. This can be accomplished by external delegation as well as internal resourcing.
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