Investment committee terms of reference

Terms of reference are the UK name for the document that constitutes a committee; US organisations usually call it a charter. They state what the committee may decide and what it may only recommend. Without them, it is unclear who may approve a policy change, a waiver or a new manager.

Typical contents are purpose, membership and quorum, meeting frequency, delegated authority and its limits, conflicts of interest, reporting to the board and annual review. For investment monitoring, the key clauses say who receives breach reports, within what time, and who may approve exceptions.

Delegated authority should be specific, for example waivers of up to three months, with longer ones going to the board. In Acclimetry, waivers are approved within delegated authority, and a rule’s materiality sets how many distinct approvers it needs. See the UK template and the US charter.