Healthcare entities are typically governed by members of a volunteer investment committee who are charged with fiduciary oversight of multiple, complex portfolios of varying horizons that are closely tied to the organization’s mission. Yet it is difficult to maintain the discipline of managing a long-term portfolio as markets ebb and flow, investment fashions change, and investment committees turn over. The paradox of a long- term time horizon, while investment environments and organizations evolve, suggests the need for a critical tool in the governance toolbox in order to keep a clear focus and ensure successful outcomes. Crafted wisely, a set of agreed-upon investment beliefs can serve as a tool to enable investment decisions that help healthcare entities ensure capital is available to cover debt requirements, float operations, and/or fund capital spending needs now and in the future.
Members of investment committees who take the time and effort to articulate and document their core beliefs, along with their rationales and supporting evidence, can help sustain the organization long after these foundational decisions have been made. Despite inevitable market and committee changes, the organization will have a clear set of guiding principles to maintain confidence and influence investment decisions to ensure they remain on a steady course.