Guideline 68. Alignment of incentives

Submitted by Anonymous (not verified) on Tue, 07/10/2018 - 09:46

The board and/or management ensure the alignment of external fund managers’ incentives with the overall investment objectives of the institution.

Guideline code

GG_08900

Mechanism

The board and/or management should establish targets, standards and benchmarks to evaluate the performance of external fund managers.
The board and/or management may use a policy of rewards and penalties to correspond to the performance of external fund managers above or below pre-set standards or benchmarks, noting that the performance evaluation period should take into consideration the nature of the assets invested in.

Parent

Structure

The board should establish the policy that sets the standards, criteria and benchmarks for the evaluation of external fund managers, in terms of variables such as fees, returns and portfolio composition, among others.
The management should ensure that the policy is implemented and adhered to by external fund managers.