As CEO of one of the largest U.S. pension plans, I have become a humble admirer of board members who take on the weighty responsibility of governing the pension investments on behalf of current and future beneficiaries.

Board members face an onslaught of challenges when they land a trustee role: They often are highly trained professionals, but often in fields unrelated or distantly related to investment management. They are faced with complex and often technical investment decisions, and they have to quickly come up to speed while evaluating vast amounts of data or converging viewpoints.

To support and assist board members facing such challenges, my most trustworthy solutions have been education, structured dialogue and adequate time for meaningful debate. My board and staff invest a significant amount of time together in study and discussion to ensure we're on the same shared journey towards a good long-term pension outcome for our fund and its beneficiaries; the emphasis here is long term.

As a pension fund with fiduciary obligations that span generations of public workers, we have very long-term obligations. We are necessarily interested in building an investment solution that will generate solid, risk-adjusted returns over time. Our board members must arm themselves with fortitude and enough resiliency to maintain proper perspective amid an overwhelming array of short-term distractions. Decision makers at pension funds must frequently cope with a low return environment, high volatility and constant shifts in industry offerings—all while remaining committed to a mission of building real investment value over the long term. My objective has always been to build a steadfast, mission-driven institution that focuses on investing for the long term.

So how do we encourage institutional investors, money managers and our portfolio companies to take a longer view? I am convinced that success starts at the board level—the front end of the investment value chain.

When board members are well educated and fully engaged, they are better equipped to pursue the long-term success of a pension plan. Ask any airplane pilot how they respond to an emergency situation, and they inevitably talk about how “the training took over their actions.” Similarly, board members must train themselves to recognize short term trade-offs, but act in terms of multiple, long market cycles. They must understand how to put today's fleeting issues into a global context with an appropriate time horizon. When faced with adversity, they must know the difference between responding and reacting. Today boards are not only challenged by a tough investing environment, but with increased desires by stakeholders who wish to use the influence of investment capital to support various societal agendas. At times, it's all too easy to allow others' missions to consume or conflict with the investment mission of a pension fund. Balancing fiduciary and societal interests is an ever-present reality for today's pension fund trustee.

To maintain such balance, a firm set of investment beliefs can help a board establish its “North Star.” This allows the board to stay on course so the fund adds value for pensioners and society over time. Boards also must be clear on delegation—empowering talented investment professionals to achieve their best for the pension plan, while exercising appropriate oversight and avoiding micro-management. Knowing when to guide, listen or to follow is essential; knowing how to challenge or support those same investment professionals are vital board skills that in my experience can be cultivated. When it works well, this leads to a healthy board dynamic, a strong staff and a mutually beneficial relationship.

During the last two decades, the Washington State Investment Board has established strong investment beliefs, clear rules around delegation and reshaped its board agendas to focus much more heavily on education, strategy and risk discussions. In short, our board is focused less on transactions and short-term market movements, and more on strategy and long-term positioning of funds. Our board embraces dedicated time for education and structured dialogue, including debate around new practical research and academic insights. Our board members also are willing to engage in self-reflection, analysis of decision making practices, and maintenance of healthy board room dynamics.

This focus on education and debate has proven valuable enough to earn a spot as a permanent feature of our strategic planning process. We explicitly recognize that all of our success rests on the foundation of a “skillful board,” therefore our board sets goals for its own development each year, all of which brings me to the purpose of this foreword.

Thus far, there has not been a high-level source for systematically educating board members on their challenges of their duties. Most of the investment literature is either too superficial or too specialized. Achieving Investment Excellence spans the relevant fields. It is both comprehensive and an accessible primer for trustees, something that's been missing in trustee education. It doesn't bog down in technical jargon or fall victim to over-simplification; it is thoughtfully designed to help board members to gain valuable, pragmatic perspective while equipping board members to keep asking the right questions. I believe it will help board members to do their best work when faced with demanding responsibilities. I'm quite sure it will lead to better conversations in many boardrooms.

I fully intend to use Achieving Investment Excellence for my own trustee onboarding, helping new trustees to hit the ground running. And for my experienced trustees, I envision there will be new insights they will gain to enhance their skills. Bottom line, the authors have succeeded in providing boards with practical tools to help achieve the best possible governance for their participants.

Theresa J. Whitmarsh