Investing from the CEO Perspective

For most credit union CEOs the typical day does not start by analyzing a Bloomberg screen to see what the Asian and European markets did overnight. CEOs have too much on their plate to analyze the investment portfolio, particularly with the level of detail needed to optimize the portfolio in relation to the existing balance sheet strategy.

 
 

For most credit union CEOs the typical day does not start by analyzing a Bloomberg screen to see what the Asian and European markets did overnight. CEOs have too much on their plate to analyze the investment portfolio, particularly with the level of detail needed to optimize the portfolio in relation to the existing balance sheet strategy. These responsibilities typically fall within the CFO or Investment Officer's domain. There are no hard and fast rules, but the question likely to be asked is how involved does the CEO need to be in these day-to-day decisions.

From a management oversight standpoint, a CEO should be aware of the risks embedded in the portfolio, the investments the credit union is authorized to buy, and how the trading of the portfolio is systematically reviewed. However, there are many tactical decisions that are made on a daily basis to execute the portfolio strategy and the level of involvement from the CEO perspective is tough to standardize. Take for example certificates from corporate credit unions, and whether there is a readily available secondary market. Or the call risk in agency debentures, or the cash flow uncertainty of mortgage backed issues. How much of this matters to the CEO?

 

 

 

Feb. 9, 2004


Comments

 
 
 
  • A lightweight article that's obviously an ad to the webinar.
    Anonymous