What is the context for a decision on a mission-based investment policy?
Both the initial decision to adopt a mission-based policy and all subsequent actions relating to it will take place in the context of the board’s responsibilities for managing the institution’s assets — that is, in the context of their fiduciary duties. What are the board’s fiduciary duties in this context? The adoption of investment policies of any type is a function the board alone has the responsibility to make. The board consists of persons with collective responsibility for managing — that is, overseeing — investment decisions as opposed to those charged with managing assets. As such, they are fiduciaries, persons whom the law recognizes as assuming the responsibility to act for another’s benefit with respect to property. Donald Trone, et al., have pointed out, “Fiduciaries are responsible for the general management of [the institution’s] assets.
