Communicating Risks to Trustees

Former Alaska Permanent CIO on the importance of dashboards.

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Jeff ScottJeffrey Scott couldn’t have joined the US$40 billion Alaska Permanent Fund at a more tumultuous time: he took the reins as chief investment officer in November 2008, the height of the 2008 Financial Crisis. Scott, who is now chief investment officer with Wurts & Associates, shared his experiences at one of the world’s oldest sovereign wealth funds with delegates at the 2012 Risk Management Conference. In particular, Scott spoke of the fund’s lack of a clear dashboard that could help explain to board members the risks it faced at any given time. Without this type of tool, he explained, board members and trustees were simply tracking manager performance, a metric that Scott argues is completely inadequate for monitoring and measuring the realities of today’s market, including the potential for a large and disastrous drawdown. In this interview, Scott explains the importance of dashboards in helping trustees to “peel back” the layers of risk facing any pension fund. Click on the image to watch the video.

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