A Board Member's Guide to Investment Oversight

A Board Member's Guide to Investment Oversight

A board member of a nonprofit serves an important role in the oversight and responsibility of the organization. This guide includes 4 key areas board members should focus on regarding the oversight of an organization’s investment program.

Making certain your organization has adequate financial resources is a key component of your responsibility and can be tied directly to the oversight and success of your investment program.  So what specifically is your role in oversight of the investment program?

  • Structure
    Ensure the organization has the proper structure for oversight of the investment program. For many boards this means establishing an oversight group (typically a finance or investment committee) of qualified individuals. As a board member you want to spend time recruiting financially savvy members that have the background to most effectively oversee the investment program.

  • Hire Advisors
    Your board or oversight group should not be selecting the individual investments, but rather recommending the selection of an investment advisor or consultant to the board. Selecting an advisor who will act in a co-fiduciary manner ensures that the organization’s best interest will be put first. The selection of an advisor should be undertaken with care and may involve issuing a Request for Proposal to several qualified advisors.

  • Review Performance
    Your oversight committee should be regularly (quarterly) reviewing performance and monitoring compliance with the investment program’s policies. Ideally, a summary report is shared with the board on a quarterly basis and a presentation from the oversight group and advisor is made to the full board on a semi-annual or annual basis.

  • Ensure Adequate Records are Kept
    Turnover of board members and committee members is something all nonprofit organizations experience. Your board should have all policies in writing and appropriately archived. This helps newly recruited members understand the governance structure and policies that are in place. Additionally, maintaining good records of past investment decisions, performance, and portfolio structure allows board members to feel confident the program has been properly managed. Storage of these critical documents should not be on an individual computer or file cabinet, but rather on a cloud based document management system.

Roles Within Your Organization & Investment Advisor

Understanding how your organization works together with investment professionals helps ensure everyone is on the same page and your oversight requirements are being met.

Organizational Chart

eCIO helps nonprofits across the country manage low-cost investment programs. If you’d like to learn more about how eCIO could help your organization, contact us at hello@getecio.com or by phone (608) 291-4646.

Download a PDF version of this guide.


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Download a PDF version of this guide.

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