Is Your Investment Governance Fit for Purpose?

A periodic review of Investment Governance should form part of a MIS manager Board's broader oversight evaluation processes – recalibration may be required in the context of shifts in investment strategy, types of assets/asset classes utilised, scale, changes in management approach (internalised management vs use of external managers) etc.

The FMA’s recently formalised guidance on Liquidity Management spoke to a number of processes relating to liquidity risk management that would form part of a broader governance framework.

For those who may not have already come across it, APRA’s Prudential Practice Guide SPG530 Investment Governance provides quite a detailed perspective on its expectations for a Registerable Superannuation Entity. It covers the role of the board, the investment governance framework (which it requires be reviewed by operationally independent persons at least every three years), investment strategy formulation, giving effect to the investment strategy, liquidity management, stress testing, and valuation governance.

Worth a read. Read the guide here.