For the past year and a half, with membership revenues challenged and conferences canceled or scaled back, many associations have had to dramatically change course, fill substantial revenue gaps, and, in some cases, reinvent themselves to stay afloat.

As the economy reopens and investment portfolios rebound, association leaders are surveying the damage and contemplating how to rebuild. What does “the new normal” look like, for specific sectors and for investors more broadly, and how should fiduciaries prepare for the future? Today is an ideal time for association leaders to reflect on the overall investment program—from investment policy statement (IPS) to execution—and set a plan that is more relevant for the future. Below are some considerations to help decision-makers reset.

Start on the Same Page

To determine next steps, you need a shared understanding of the starting place. Have there been any changes on the investment committee, executive team, and/or individual charged with staffing this committee? Do any adjustments need to be made to account signatories and/or reporting contacts? For new members, schedule an orientation session that covers roles and responsibilities, including expectations for meeting frequency, preparation, attendance, and participation requirements.

Importantly, members should understand their fiduciary duty to act prudently and in the best interest of the organization. In Balancing Structure with Flexibility, we highlight the path to building a solid fiduciary foundation. Educating committee members is an essential component.

Review Key Policies

When did you last ratify the IPS and spending policy? Distribute to the group and consider:

• What projections or expectations were set in the IPS regarding risk and return?
• Is today’s asset allocation in line with IPS guidelines?
• Have any major changes occurred warranting a new time horizon and/or investment strategy?
• Should we consider responsible investing?

Our current median projections for the next 10 years reflect lower returns and higher volatility across stocks and bonds than investors enjoyed throughout the last decade. If the current IPS includes expectations for a 60 percent global stock/40 percent taxable bond portfolio to deliver annualized returns of 8 percent, for example, that would have been spot on in 2010. Today, to experience similar outcomes, you will likely need to adjust return expectations, increase equity exposure, add some alternative income producing assets as appropriate, lower the spending rate, increase inflows into the portfolio, or, in all likelihood, some combination of all of these. Talk to your investment advisor.

Document and Implement

All action items should come with a plan to execute in a timely fashion, and a designated individual should document minutes for each meeting. At the committee’s next meeting, this individual will confirm that all items from the last session were completed and ask why open items are still open. Without this follow-up, items may fall through the cracks.

Portfolio performance should be documented and analyzed in the context of the organization’s stated goals, in addition to comparing returns to relevant benchmarks. If external financial partners are used, evaluate the service level agreement, including communication, reporting, cost, and any other aspects of the relationship now and on an annual basis. The committee should clearly spell out expectations, provide specific feedback, and encourage outside advisors to share insight on improving the process.

Book It

Advance notice and adherence to agreed-upon timeframes are critical for getting the most from busy committee members. Book the next year’s quarterly meetings now. Four weeks post quarter-end provides investment advisors ample time to distribute fulsome results with enough time for committee members to review and prepare in advance of the meeting. The agenda should be thorough but limited enough in scope to encourage active and inclusive dialogue and to ensure each agenda item is given the necessary time and consideration for a thoughtful discussion.

Further communication is key across board committees, between board and staff, and to the broader membership. The strongest institutions provide transparency to stakeholders and the general public in terms of finances. It’s a given that the most productive committees communicate clearly with auditors and other external stakeholders.

Reap the Rewards

The investment committee’s responsibilities in both protecting and advancing the goals of any given association are awesome, but should also feel very rewarding. After a particularly challenging time for many associations, the investment landscape is shifting as well. By incorporating key practices for an effective team and by getting ahead of changing expectations for the capital markets ahead, this group will instill the confidence necessary for the rest of the institution’s stakeholders to focus on what’s important: fulfilling the organization’s mission.