What Decisions Should an Investment Committee Make, and What Should It Delegate?

An investment committee should handle strategic choices and material risks, while staff manage routine decisions within clear authority. The family office needs a written process that explains which decisions require committee review, who has the final say, and what can be delegated.

Reserve Committee Time for Material Matters

The committee can oversee portfolio construction, major allocation choices, risk management, investment policy, and selection or replacement of managers. It can also review opportunities that would materially change the family's exposure or fall outside established limits. These discussions benefit from more than one perspective and a shared record of the reasons behind the decision.

Before forming or revising a committee, review the family's investment activity. Identify the areas that need regular attention, how often decisions arise, and which people have the relevant expertise. Keep standing membership limited to those whose participation is necessary. The investment committee structure should reflect the actual portfolio and the family's decision process.

Delegate Routine Execution

Staff should be able to handle ordinary portfolio operations and decisions that fit within the committee's approved policy. A property manager does not need the full committee to approve every ordinary operating choice. Similarly, investment staff can monitor positions and prepare recommendations between committee meetings, provided they know their authority and reporting duties.

Delegation works when boundaries are explicit. Set approval thresholds, identify exceptions that require escalation, and establish who can act when timing matters. The authority for investments of different sizes can be spelled out in the charter. The committee should then spend its meeting time on decisions that benefit from collective review.

Make Authority and Voting Clear

Do not leave members to guess whether the committee advises, votes, or makes final decisions. State whether the principal, CIO, or committee has final authority for each category. Define voting rules, conflict procedures, and what happens when members disagree. A charter should also describe the committee's mission and the limits of its authority.

A clear chain of command reduces avoidable conflict and indecision. The decision record should capture the rationale, the approved authority, and any conditions attached to the approval. If an opportunity falls outside the agreed limits, use the escalation path set out in the family's investment process.

The committee's job is to provide oversight and make the decisions assigned to it. Staff can move efficiently within the authority they have been given. Clear boundaries let both groups work without turning routine administration into a committee matter or leaving significant risks unexamined.

Sources: The Single Family Office. Informational only, not financial, legal or tax advice.