Purloined from The Skorina Letter which was lifted from a Ted Seides interview with Wash U CIO, Scott Wilson.

The trustees observed that the best boards are committed, highly aligned, and dedicated. They are small and unified, with five to seven members, little turnover, and with an average tenure of ten years minimum.

The best boards have clarity of purpose. They set strategic goals, define what they want the investment team to accomplish, and grade and pay the team objectively and well.

Poor performing boards sit at crowded tables, with high turnover, and too many cooks in the kitchen. They have conflicting goals. For example, they don’t allow the staff to take risks yet demand big returns. And they are often cheap. All this leads to poor performance and high staff turnover.

At top ranked endowments, the boards own the strategic asset allocation and lets the staff do the investing. The WashU IMC gives the team significant latitude, and in turn expects the team to shoot straight.

When they make mistakes, or something doesn’t work out, the board understands, that’s the nature of investing, but write down the thesis and the variance, and tell the board what lessons have been learned.

Small Board, skin in the game, set strategic plan, tie comp to it and let the CEO run hard. That’s the only agenda.