Investment governance

Trustees delegate most investment decision to an Investment Committee comprising five members, of which three are trustees and two independent members. The trustees tend to have sound lay investment knowledge and this is supplemented by two independent experts, one of whom will have experience of fund management and the other as an equity manager.

The Committee is served by a part time Investment Director and advised by an Investment Consultant (currently Cambridge Associates). The Committee does not see managers but receives reports from the Investment Director and the two independent experts at its regular meetings. Commitments to illiquid funds are taken after consulting with the Investment Consultants.

The Chairman of the Foundation chairs the Investment Committee which also reflects the centrality of the portfolio to the Foundation’s financial wherewithal. Every 18 months or so the Investment Committee is required to account to the full body of Trustees, and in particular to set out the investment risks to which the organisation is exposed. The purpose of this is to ensure that all trustees are prepared for adverse markets and can remain confident in the rational of the strategy in difficult circumstances. The strategy is underpinned by our Investment Beliefs.

Trustees take a considered view of responsible investing which is kept under regular review. Our approach reflects our values of independence, rigorous evidence and concern for effective social policy; in part this is reflected in our intolerance of passive investing. However, we recognise that our endowment is invested in the real world and consequently there is a risk that some investment decisions may be linked to corporate strategies or products which potentially undermine aspects of our mission. If we identify this to any significant degree we will not invest in that business or sector, and as far as possible we seek to minimise this across all our investments through our engagement with the managers who are responsible for the day to day investment decisions made on our behalf. Nuffield Foundation has a responsible investing policy.