Michael Maouboussin: On Investment Committee

Hi, I suggest all my readers to please read this interesting research done by Legg Mason Funds under Michael Maouboussin. Not only to Investment Committe, its gives an insight to how broadly decision reach their success and major decision fails and ways to enhance this skill sets in a Board Room.

How to Build Investment Committee

Summary :
General Findings

• Small Committees tend to be more effective than large cos.
• Cognitively diverse committees make better decisions than homogenous ones.
• Diversity can create a performance drag.
• Committees frequently allocate time poorly.
• Committee members dont always reveal information they have.
• Committee often fail to properly consider reversion to the mean.
• Large committees encourage social loafing.