Question: In our organization our CEO has total control of the investing of all our endowment funds. Personally, I do not think this is appropriate. I believe that the board should not delegate the responsibility, because it cannot delegate the accountability. And just because the CEO is experienced in investing, the board is not excused from the accountability. What is your opinion of this?
Answer: you are certainly correct in saying that the board is accountable for the investment function of the organization. However, a board of directors of an organization of any size must of necessity delegate most of its functions to someone. That someone is usually the CEO.
The investment function, however, is unique in my opinion. I do not believe that the investment of endowment funds should be delegated to the CEO even if the CEO is experienced in investing. It is too much responsibility to delegate to one person. Read more