As a further expression of its commitment to transparency and appropriate governance regarding investments, the University of Michigan will implement several changes to its practices.
The changes were announced Thursday at a meeting of the Board of Regents following a board review of the policies, procedures and practices that surround the Investment Office, and considering best practices.
The institution will move from verbal disclosure of potential conflicts of interest to written conflict-of-interest disclosure statements from members of the all-volunteer Investment Advisory Committee, said Regent Andrew Richner, speaking on behalf of the eight-member board.
“A small number of the university’s investments are in funds managed by members of the IAC. Going forward, should the university make new investments in such funds, it will call specific attention to them for regents to ensure transparency and prepare a plan to manage any perceived conflict. Additionally, the CIO (chief investment officer) will present the overarching investment strategy annually at a regents’ meeting,” Richner said.
Richner also noted that while the IAC advises on overall investment strategy and does not discuss specific investments, members who might be conflicted will be recused from any such discussion, should it ever occur.
“Also, we will recommend the IAC redesignate the endowment previously established by IAC members to support the university’s Investment Office to a need-based student scholarship (or other areas of the institution, as selected by the donors) to avoid any perception of a conflict. The university will not accept any future donations specifically in support of the Investment Office.”
Richner said the Board of Regents has a “high degree of confidence” in the university’s Investment Office.
He said the Board of Regents is committed to ensuring the university earns the best possible return on investment for its endowment investments. Maximizing return, with the appropriate amount of risk, puts donor funds to work in supporting our students, our faculty members, our researchers and our patients, Richner said.
“We are grateful for the expertise of the investment experts who volunteer their services on the Investment Advisory Committee in assisting us in achieving our investment objectives. We appreciate their dedication to the university.
“As the governing board of a world-class, public university, we are committed to transparency and appropriate governance regarding our investments,” Richner said.