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University of Michigan officials announced Thursday they are considering moving investment decisions outside of public meetings.
Currently, the University’s Board of Regents reviews investment decisions during their monthly public meetings, but according to a recent press release from The University Record, under the new proposal the board would only vote on broad guidelines for the University investments, while the responsibility of making investment decisions would fall on the investment office staff.
In the press release, University spokesman Rick Fitzgerald writes current investment procedures go further than standard practices of other similar universities.
“U-M goes beyond what peer institutions consider necessary by presenting new investments to the Board of Regents in public session to be approved before the investments are executed,” Fitzgerald writes. “A more common practice would be for the Board of Regents to annually approve the types of investments that are appropriate for U-M and what percentage of total investments are appropriate for each investment type.”
Instead of approving investments individually, the board would approve investment strategies and build a “model portfolio of investments.” The board would also decide performance benchmarks for investments.
University President Mark Schlissel also commented on the new policy for reviewing investments.
“The university, with rare exception, is functioning in accordance with a robust set of policies designed to assure responsible governance oversight of our investment activity,” Schlissel said in the press release. “But we also know we can continuously improve and will proceed quickly to implement the recommendations.”
According to Schlissel, the University plans to allow external parties to do specialized reviews of University investment functions periodically in order to serve as another measure of control.
The University’s decision to move investment decisions outside of public meetings comes as the result of the findings of an independent review of the University’s standard investment procedures performed by the accounting firm PricewaterhouseCoopers.
The University’s Finance, Audit and Investments Committee also regularly reviews the University’s investment practices.
University Regent Katherine E. White (D), the chair of the Finance, Audit and Investments Committee, said a regular independent review would keep the University running smoothly.
“As stewards of the university’s assets, it is reassuring to know we have a solid operation, from front to back,” White said in the press release.