Governance Policy System (GPS)

Purpose & Mission of the SIB

Mission

The mission of the North Dakota State Investment Board is to prudently invest entrusted assets to generate long-term value while meeting liquidity, fiduciary, and statutory obligations.

Beneficiaries

Who We Serve

For purposes of this manual, beneficiaries of the Retirement and Investment Office (RIO) and the SIB include those entities and participants defined by statute, as well as those that have contracted for investment or related services under statutory authority. This includes all current and future beneficiaries of the funds managed by the SIB, such as public pension and retirement funds, legacy and trust funds, insurance and guarantee funds, and growth and stabilization funds.

In fulfilling its fiduciary duties, the SIB recognizes the principle of intergenerational equity and balances the needs of current beneficiaries with the responsibility to preserve purchasing power, financial sustainability, and flexibility for future beneficiaries, taking into account differing fund purposes, time horizons, and risk tolerances.

Unlike a single-purpose pension fund, NDSIB has multi-client fiduciary complexity:

• Different time horizons
• Different liquidity profiles
• Different political sensitivities
• Different statutory constraints

This can materially affect asset allocation, risk tolerance, and reporting.

Stakeholder Alignment and Relations

Effective stakeholder relations are essential to sustaining trust, legitimacy, and long-term effectiveness in a public fiduciary organization. Because many stakeholders — beneficiaries, policymakers, regulators, participating agencies, and the public — interact with the organization episodically or indirectly, the quality, consistency, and tone of those interactions materially shape confidence in the institution and its governance.

The Executive Director shall assure that all interactions with stakeholders, the public, and other government entities are conducted in a manner that reflects the agency's core values of integrity, accountability, and service, and that reinforces the organization's fiduciary purpose and public mandate. Communications shall be accurate, clear, timely, and professional, and shall appropriately distinguish established facts, policy positions, and analytical conclusions from personal opinions or commentary.

By maintaining disciplined, transparent, and respectful stakeholder relations — often without seeking visibility or advocacy — the organization supports informed oversight, reduces reputational and governance risk, and preserves the trust necessary to operate effectively across political cycles and market environments.

See also — External Communications

Fiduciary Duties

Core Duties

By virtue of the responsibilities assigned to the State Investment Board (SIB) by N.D.C.C. Chapter 21-10, the members of the SIB are fiduciaries for multiple statutory funds. Through contractual obligations, fiduciary responsibility extends to contracted additional funds.

A fiduciary is a person who has discretionary authority or management responsibility for assets held in trust to which another has beneficial title or interest. The fiduciary is responsible for knowing the "prudent requirements" for the investment of trust assets. Remedial actions may be assessed against fiduciaries for violations of fiduciary duty.

The Duty of Loyalty

Each Board and Committee member shall discharge their duties solely in the interest of the beneficiaries and participants, placing those interests above any personal, political, or external considerations, avoiding conflicts of interest, and acting with undivided loyalty to the funds entrusted to the Board.

The Duty of Compliance

Members shall comply with all applicable statutes, regulations, Board policies, ethics requirements, duly adopted procedures and plan documents, assuring that all actions remain within the scope of lawful authority and delegated responsibility including, for example, Open Meetings.

The Duty of Prudence

A prudent investor is evaluated based on the demonstration of prudence compared to prevailing peer practices.

North Dakota state law provides broad fiduciary guidelines for the SIB members. NDCC § 21-10-07 specifies that the State Investment Board shall apply the prudent investor rule in investing for funds under its supervision except that § 21-10-07.1 requires the SIB to give preference to qualified investment firms and financial institutions with a presence in the state for Legacy Fund investment purposes. "The prudent investor rule" means that in making investments, the fiduciaries shall exercise the judgment and care, under the circumstances then prevailing, that an institutional investor of ordinary prudence, discretion, and intelligence exercises in the management of large investments entrusted to it, not regarding speculation but regarding the permanent disposition of funds, considering probable safety of capital as well as probable income.

Procedural Prudence

Procedural prudence is a term that has evolved to describe the appropriate activities of a person (or persons) who act in a fiduciary role. Court decisions to date indicate that procedural prudence is more important in assessing fiduciary activities than actual portfolio performance. A fiduciary cannot be faulted for making the "wrong" decision provided that proper due diligence was performed.

The key to successfully discharging the SIB's fiduciary duties is the establishment of and adherence to proper due diligence procedures. While not bound by ERISA (Employee Retirement and Income Security Act of 1974), the SIB will use the procedural prudence outlined by ERISA as guidance in developing its procedures:

• An investment policy must be established for each fund and must be in writing.
• Plan assets must be diversified, unless under the circumstances it would be prudent not to do so.
• Investment decisions must be made with the skill and care of a prudent expert.
• Investment performance must be monitored.
• Investment expenses must be controlled.
• Prohibited transactions must be avoided.

The Board demonstrates prudence through process evidence, including:

• Consideration of alternatives and trade-offs.
• Clear delegation limits and escalation triggers.
• Ongoing oversight supported by agreed metrics.
• Independent verification of results.
• Transparent reporting, including exceptions and corrective actions.

Conflicts of Interest & Disclosure

Conduct Policy

Conflicts of interest and the appearance of impropriety must be avoided by the SIB, the Executive Director, and all executives and staff. No individual subject to this policy shall allow family, social, professional, financial, political, or other relationships to influence, or appear to influence, their judgment in discharging their official responsibilities.

The SIB, the Executive Director, and all executives and staff must refrain from financial and business dealings that tend to reflect adversely on the proper discharge of their duties or create the appearance of divided loyalty. They must avoid situations that compromise, or could reasonably be perceived to compromise, their independence, objectivity, or fiduciary obligation to act in the exclusive interest of beneficiaries and the fund.

If a conflict of interest unavoidably arises, the individual shall immediately disclose the conflict in writing.

• The Executive Director shall disclose the conflict to the Chair and the Director of Audit (DA).
• Executives and staff shall disclose the conflict to the Executive Director (or designee).
• Matters involving the Executive Director or systemic concerns shall be referred to the Audit, Risk and Compliance Committee.

The individual shall comply with any subsequent recommendations or directives issued by the appropriate authority, including recusal, mitigation, or other remedial measures.

Prohibited Conduct

Conflicts of interest to be avoided include, but are not limited to:

• Receiving consideration, compensation, or benefit for advice given to a person concerning any matter over which the individual has direct or indirect control or influence.
• Acting as an agent, representative, or attorney for a person in a transaction involving the SIB.
• Participating in any transaction, decision, or recommendation in which the individual has acquired material non-public information through their official position.
• Using confidential or privileged information obtained through employment or Board service for personal gain or for the benefit of another.

Definition

For purposes of this policy, "Conflict of Interest" means a situation in which a Board member, the Executive Director, an executive, or a staff member has a conflict of interest as that term is defined in North Dakota statute and in rules promulgated by the North Dakota Ethics Commission under N.D.A.C. Chapter 115-04-01. This policy is intended to be interpreted consistently with all applicable provisions of the North Dakota Century Code and regulations of the North Dakota Ethics Commission.

Affirmation and Disclosure

The Executive Director shall establish and maintain written policies and procedures governing: disclosure of conflicts of interest; annual affirmations of understanding of this policy; ongoing reporting of potential or actual conflicts; documentation and retention of disclosures; and procedures for review and determination of appropriate mitigation actions.

The Executive Director, all executives, and all staff shall affirm their understanding of this policy annually, in writing, and shall promptly disclose any actual, potential, or perceived conflicts of interest that may arise. Board members shall affirm compliance with disclosures in accordance with Board policy and applicable law.

Disclosure

1. Purpose

This policy is adopted pursuant to NDCC § 21-10-01 et seq. and applicable fiduciary standards under NDCC § 54-52-02.9 to ensure that Trustees act solely in the interest of beneficiaries and maintain independence from actual or perceived conflicts of interest.

2. Definitions

Financial Interest means any direct or indirect ownership, compensation arrangement, employment relationship, or other material economic interest held by a Trustee or an Immediate Family Member.

Immediate Family Member includes a spouse, domestic partner, dependent child, or any person residing in the Trustee's household.

Material Relationship means any relationship that a reasonable person could conclude may influence, or appear to influence, the Trustee's judgment.

Event-Driven Disclosure means disclosure required within ten (10) business days of a material change in circumstances.

Meeting Disclosure

At the time of roll call for each Board meeting, each Trustee shall affirm on the record whether they have any actual, potential, or perceived conflict of interest with respect to any item on the meeting agenda.

3. Annual Disclosure Certification

Each Trustee shall complete and sign an annual written disclosure statement affirming compliance with fiduciary duties of loyalty, care, and compliance under NDCC § 54-52-02.9 and applicable law. The annual disclosure shall: identify all Financial Interests and Material Relationships; affirm the Trustee's understanding of the duty to act solely in the interest of beneficiaries; and acknowledge the obligation to update disclosures promptly upon change.

The Governance and Policy Review Committee shall review annual disclosures and report compliance status to the Board.

4. Event-Driven Disclosure

A Trustee shall disclose any new or changed Financial Interest or Material Relationship within ten (10) business days of becoming aware of such interest.

5. Recusal

If a matter presents an actual or potential conflict:

• The Trustee shall disclose the conflict prior to discussion;
• The disclosure shall be recorded in the meeting minutes consistent with NDCC § 44-04-19;
• The Trustee shall abstain from discussion and vote and leave the room during deliberation unless counsel advises otherwise;
• If the Chair is conflicted, the Vice Chair shall assume responsibility for enforcing this procedure.

6. Public Records

Disclosure forms and related materials shall be maintained in accordance with NDCC § 44-04-18 and § 44-04-30. Confidential investment information shall be handled consistent with NDCC § 44-04-22.

External Communications

Conduct Policy

1. Authority to Speak for the Board

Pursuant to NDCC § 21-10-01 et seq., the Board acts only through official Board action taken in compliance with NDCC § 44-04-19.

The Chair serves as official spokesperson on governance matters. The Executive Director serves as official spokesperson on operational and investment matters. Individual Trustees have no independent authority to represent the Board unless expressly authorized by Board action.

2. Personal Capacity Statements

When speaking in a personal capacity, Trustees shall clearly state: "The views expressed are my own and do not represent the position of the North Dakota State Investment Board."

3. Legislative Communications

Board positions presented to legislative bodies must reflect official Board action. Testimony on behalf of the Board requires coordination with the Chair and Executive Director.

4. Crisis Communications

In the event of a material legal, reputational, or operational matter:

• The Executive Director shall notify the Chair promptly;
• The Chair, Executive Director, and legal counsel shall determine communication strategy;
• No Trustee shall independently issue public statements regarding such matter without authorization.

5. Confidentiality

Trustees shall not disclose non-public investment, personnel, legal, or beneficiary information protected under NDCC § 44-04-22 or other applicable law. Digital and social media communications are subject to this restriction and applicable public records retention requirements under NDCC § 44-04-30.

Board Access to Confidential Information

Conduct Policy

Purpose

This policy is adopted pursuant to NDCC § 21-10-01 et seq. and applicable fiduciary standards under NDCC § 54-52-02.9 to assure that Board members have timely and appropriate access to information required to fulfill fiduciary duties, while safeguarding confidential, sensitive, and market-moving information protected under NDCC § 44-04-22 and preserving the integrity of the SIB’s governance and operating model.

Scope

This policy applies to:

• All Board members and Committee members, including external Committee members;
• The Executive Director, executives, and staff responding to information requests;
• All forms of information — written, verbal, digital, and system access — held by the Retirement and Investment Office or its service providers.

This policy governs information requests beyond the materials routinely provided in Board and Committee meeting packets. Materials included in approved meeting packets are, by definition, accessible to Board and Committee members in accordance with NDCC § 44-04-19 and confidentiality protections under § 44-04-22.

Definitions

Confidential Information means non-public information held by the SIB or RIO, including investment, personnel, legal, contractual, and beneficiary information protected under NDCC § 44-04-22 or other applicable law.

Material Non-Public Information (MNPI) means information not generally available to the public that a reasonable investor would consider significant in making an investment decision, including pending transactions, manager evaluations in progress, deal pipeline, and material portfolio actions.

Fiduciary Purpose means the exercise of a Board or Committee responsibility to set direction, approve, oversee, verify, or report, consistent with the Board’s five fundamental powers.

Guiding Principles

The Board affirms the following principles governing access to information:

• Fiduciary Purpose: Access shall be directly linked to a defined fiduciary responsibility — approve, oversee, verify, or report — and shall support oversight and decision-making, not operational involvement.
• Need-to-Know Standard: Information provided shall be limited to what is necessary, proportionate, and relevant to the fiduciary purpose identified.
• Channel Integrity: Information requests beyond routine meeting materials shall follow formal governance channels established under this policy. Routine interaction between Committee Chairs and designated staff liaisons in furtherance of approved Committee work plans is not restricted by this policy.
• Confidentiality and Market Integrity: Protection of MNPI, attorney-client privileged information, personnel information, and sensitive operational data is paramount and shall not be subordinated to convenience or expediency.

Information Classification and Access Control

The following classifications govern Board access to information held by the RIO:

Access Request Protocol

All requests for information beyond routine meeting materials shall be submitted in writing through the Executive Director, with the Communications and Outreach Director maintaining the request log.

Written requests for non-public information shall identify:

• The fiduciary purpose linked to a Board or Committee responsibility;
• The defined scope and timeframe of the information sought;
• Confirmation that the request does not duplicate existing Board materials.

The Executive Director shall acknowledge requests promptly and respond within a reasonable period appropriate to the request’s complexity and sensitivity. Denials shall be in writing with stated rationale and may be appealed to the Board Chair.

Prohibited Practices

Board and Committee members shall not:

• Request non-public information directly from staff outside the channels established in this policy;
• Direct staff to perform analysis, research, or work outside approved Board and Committee work plans;
• Access or use information obtained through Board service for personal, political, commercial, or other non-fiduciary purposes;
• Conduct independent or parallel due diligence on investment managers, transactions, or counterparties outside Board-approved processes;
• Share confidential information with persons not authorized to receive it, including spouses, family members, business associates, or media.

Information Handling and Security

The following handling requirements apply to confidential and highly confidential information:

• Where appropriate, sensitive materials shall be made available for review on-site at RIO offices or through secure electronic means designated by the Executive Director;
• Access restrictions may include view-only access, watermarking, time-limited availability, and prohibition on copying, downloading, or forwarding;
• Sensitive information shall not be transmitted via unsecured channels, including personal email, personal devices, text messaging, or non-approved cloud storage;
• Public records retention requirements under NDCC § 44-04-30 apply to all communications regardless of channel.

MNPI Receipt and Quarantine

A Board or Committee member who inadvertently receives or becomes aware of MNPI shall:

• Notify the Executive Director and Chief Legal Counsel promptly;
• Refrain from trading in any affected security or instrument and from sharing the information with any other person;
• Recuse from any Board or Committee deliberation in which the inadvertent receipt could compromise the integrity of the decision-making process, pending guidance from legal counsel.

Confidentiality and Legal Obligations

Board and Committee members shall:

• Annually affirm in writing their confidentiality and fiduciary obligations under this policy and applicable law;
• Comply with all restrictions on the use of MNPI and other non-public information;
• Adhere to applicable personal trading, disclosure, and recusal requirements consistent with the Disclosure policy and the Conflicts of Interest policy;
• Comply with continuing obligations following the conclusion of Board or Committee service with respect to information acquired during such service.

Documentation and Audit Trail

The Communications Director, under the direction of the Executive Director, shall maintain a log of all formal information requests submitted under this policy, including:

• Date of request, requester, classification, approval authority, and disposition;
• Date of access provided and form of access (on-site, secure portal, transmitted copy);
• Any access restrictions imposed.

The Executive Director shall report to the ARCC on an exception basis regarding denied requests, withdrawn requests, and material handling incidents. The Internal Audit function may review the log as part of its risk-based audit plan. Material breaches shall be escalated by the Executive Director to the Board Chair and to the ARCC.

Enforcement

Breaches of this policy may result in:

• Formal reprimand by the Board Chair, on recommendation of the GPRC;
• Committee reassignment or removal, consistent with applicable law and Board authority;
• Referral to the North Dakota Ethics Commission or other oversight bodies, where appropriate;
• Other actions consistent with governing statutes and the Conflicts of Interest policy.

Periodic Review

This policy shall be reviewed by the GPRC at least every three (3) years, or sooner upon material changes in:

• Regulatory or statutory requirements;
• The Board’s governance structure or delegation framework;
• Technology, cybersecurity, or information-handling standards relevant to access controls.

See also — Disclosure; Conflicts of Interest and Appearance of Impropriety; External Communications; Use of Artificial Intelligence; Securities Litigation Oversight & Annual Reporting.

Trustee Travel Policy

Conduct Policy

1. Purpose

Trustee travel shall support the Board's fiduciary obligations under NDCC § 21-10-01 et seq. and NDCC § 54-52-02.9.

2. Fiduciary Purpose Standard

Reimbursable travel must relate to one or more of the following:

• Trustee education aligned with Board-approved curriculum;
• Due diligence on material investments;
• Governance or peer benchmarking;
• Statutory representation responsibilities.

3. Pre-Approval

• Routine domestic travel requires prior approval of the Chair.
• International or unusually high-cost travel requires Board approval.

4. Reimbursement

Travel reimbursement shall comply with applicable state travel policies and reimbursement rates. Expense documentation must be submitted within thirty (30) days of travel completion.

5. Post-Travel Reporting

Within thirty (30) days of travel completion, the Trustee shall provide a written summary to the Board describing:

• Key insights gained;
• Relevance to Board priorities;
• Recommended follow-up actions.

6. Transparency

An annual summary of Trustee travel expenditures shall be included in Board materials consistent with NDCC § 44-04-18.

Oath of Office

Conduct Policy

1. Statutory Requirement

Each Trustee shall execute the oath of office required under NDCC § 44-04-10 and § 54-06-01 prior to participating in Board deliberations or voting.

2. Fiduciary Acknowledgment

The oath shall acknowledge:

• Duty of loyalty to beneficiaries;
• Duty of care consistent with the prudent investor/prudent expert standard under NDCC § 54-52-02.9;
• Duty of compliance with applicable statutes and Board policies;
• Obligation to avoid conflicts of interest;
• Commitment to continuing fiduciary education.

3. Annual Reaffirmation

At the first meeting of each fiscal year, Trustees shall reaffirm their oath and fiduciary obligations. Reaffirmation shall be recorded in the minutes consistent with NDCC § 44-04-19.

4. Record Retention

Executed oaths shall be maintained in permanent Board records consistent with NDCC § 44-04-30.

5. Non-Compliance

A Trustee who has not executed or reaffirmed the required oath may not vote or participate in official Board action until compliance is achieved.

Use of Artificial Intelligence

Conduct Policy

1. Purpose

The purpose of this policy is to establish principles, governance standards, and control requirements governing the use of Artificial Intelligence (AI) technologies by the North Dakota State Investment Board ("Board") and the Retirement and Investment Office ("RIO") staff. This policy is adopted pursuant to NDCC § 21-10-01 et seq. and is intended to assure that the use of AI supports the Board's fiduciary obligations under NDCC § 54-52-02.9, protects confidential information under NDCC § 44-04-22, and complies with applicable open records and open meetings laws.

2. Scope

This policy applies to: all Board members; the Executive Director; all RIO employees; and contractors and service providers acting on behalf of the Board where AI tools are used in connection with Board business.

3. Definitions

Artificial Intelligence (AI) means software systems or tools that perform tasks typically requiring human intelligence, including but not limited to machine learning systems, predictive models, generative AI, large language models, natural language processing systems, and automated decision-support tools.

Generative AI means AI systems that generate text, images, code, models, or other content in response to prompts.

Material Decision Context means any matter involving investment decisions, manager selection, asset allocation, procurement, risk management, governance, personnel, benefit determination, or other actions that may materially affect beneficiaries or public funds.

4. Guiding Principles

• Fiduciary Primacy: AI tools may support but shall not replace the exercise of independent fiduciary judgment required under NDCC § 54-52-02.9.
• Human Accountability: All material decisions remain the responsibility of identified individuals and the Board acting collectively. AI outputs shall not be treated as authoritative without human review.
• Confidentiality Protection: Confidential investment information, proprietary data, and non-public records protected under NDCC § 44-04-22 shall not be entered into publicly available AI systems unless explicitly authorized and protected by appropriate contractual safeguards.
• Transparency and Documentation: Where AI tools materially inform analysis or recommendations presented to the Board, staff shall document the role of AI in the analytical process consistent with NDCC § 44-04-18 and § 44-04-30.
• Security and Risk Management: AI use shall comply with Board-approved cybersecurity, data governance, and enterprise risk management policies.

5. Permissible Uses

Subject to safeguards in this policy, AI may be used for:

• Research support and background analysis;
• Drafting and editing non-final documents;
• Data summarization and pattern identification;
• Scenario modeling and analytical support;
• Administrative efficiency improvements;
• Education and training purposes.

6. Prohibited Uses

The following uses are prohibited unless expressly approved by the Executive Director and consistent with law:

• Entering confidential investment information into public AI platforms without contractual data protection safeguards;
• Delegating final investment decisions to automated AI systems;
• Using AI to generate official Board positions without human validation and approval;
• Circumventing public records retention requirements;
• Creating synthetic communications that misrepresent Board authority or official positions.

7. Investment Decision Support

Where AI tools are used in connection with investment analysis: AI outputs shall be considered advisory only; material assumptions must be independently validated; documentation shall identify the extent to which AI informed analysis; and final recommendations shall clearly reflect professional judgment and fiduciary review. The use of AI shall not dilute the prudent investor/prudent expert standard required under NDCC § 54-52-02.9.

8. Governance and Oversight

8.1 Executive Director Responsibilities. The Executive Director shall: approve AI tools used for official business; ensure appropriate vendor due diligence and contractual safeguards; integrate AI risk into enterprise risk management; and report material AI-related risks or incidents to the Audit, Risk and Compliance Committee.

8.2 Audit, Risk and Compliance Committee Oversight. The Audit, Risk and Compliance Committee shall: oversee AI-related operational, cybersecurity, and compliance risks; review AI governance practices periodically; and ensure alignment with internal audit plans, where appropriate.

9. Vendor and Third-Party AI Use

Contracts with external managers, consultants, or service providers that materially use AI in connection with Board assets shall: disclose such use when more than incidental; provide assurances regarding data confidentiality and cybersecurity; and confirm compliance with applicable law and fiduciary standards.

10. Records Retention

AI-generated content used in Board business constitutes a public record where required under NDCC § 44-04-18 and shall be retained in accordance with NDCC § 44-04-30. Prompt histories or AI interactions that materially inform recommendations to the Board shall be retained as part of the decision-support record.

11. Training

Trustees and staff shall receive periodic education regarding: appropriate AI use; data confidentiality risks; and fiduciary implications of AI-supported analysis.

12. Periodic Review

This policy shall be reviewed at least every two (2) years or more frequently if significant technological or regulatory developments warrant revision. The Board recognizes that AI tools may enhance analytical depth and operational efficiency. However, prudence is measured by the quality of human judgment exercised in oversight, not by the sophistication of tools employed.

Securities Litigation Oversight & Annual Reporting

Conduct Policy

Oversight of securities litigation affecting the Board's investment portfolios is a fiduciary responsibility of the Board, supported by management. The Executive Director shall provide the Board, at least annually, with a written report on the status of securities litigation matters affecting the System's portfolios. The report shall enable the Board to fulfill its fiduciary duty of prudence in safeguarding investment assets entrusted to it.

The Executive Director’s Annual Securities Litigation Report shall address, at a minimum:

1. Portfolio Exposure & Case Inventory

• Summary of all material securities litigation matters in which the System is participating or eligible to participate;
• Identification of cases involving direct litigation, opt-out actions, lead plaintiff roles, group litigation, anti-trust claims, or class action participation;
• Aggregate market value exposure associated with affected holdings.

2. Participation Decisions

• Summary of participation decisions made during the reporting period (e.g., passive class participation, opt-out, direct filing, lead plaintiff status);
• Confirmation that such decisions were made consistent with the Board-approved Securities Litigation Policy.

3. Claims Activity & Recoveries

• Status of claims filed;
• Settlements received or anticipated;
• Total recoveries during the reporting period and cumulative recoveries to date;
• Estimated costs associated with participation.

4. Outside Counsel & Legal Coordination

• Identification of any special assistant attorneys or outside counsel engaged;
• Confirmation of coordination with and concurrence of the Office of the Attorney General, where required.

5. Risk & Threshold Assessment

• Application of any Board-approved dollar or risk thresholds used to evaluate opt-out or direct litigation decisions;
• Assessment of litigation risks, costs, and expected benefits.

6. Policy & Process Review

• Confirmation that monitoring processes remain effective;
• Recommendation of any proposed updates to the Securities Litigation Policy, thresholds, or procedures.

7. Fiduciary & Governance Considerations

• Assessment of whether current practices align with fiduciary duties of loyalty and prudence;
• Any emerging trends in securities litigation relevant to the Board’s oversight responsibilities.

Governance Clarification

Management retains responsibility for:

• Ongoing monitoring of securities litigation affecting portfolio holdings;
• Timely filing of claims;
• Engagement and oversight of litigation service providers;
• Escalation of material matters to the Board.

The Board retains responsibility for:

• Approval of the Securities Litigation Policy;
• Approval of any material policy changes;
• Oversight of management’s execution of securities litigation responsibilities.

Four Lines of Accountability Model

Accountability Structure

The Board recognizes the 4 Lines Model as the foundation for reasonable assurance and independent reassurance and accountability:

The Board relies on all four lines to support prudent delegation and informed oversight. 1st and 2nd Lines provide reasonable assurance through execution, controls, and monitoring. 3rd and 4th Lines provide independent reassurance through objective review and assurance.

The ND Statutory Framework & Legislature

Framework

The North Dakota Legislature establishes the statutory framework within which the SIB operates. The Legislature's role is one of policy-setting, fiscal authorization, and accountability oversight — not investment management. The Legislature defines the rules, resources, and accountability expectations; the SIB governs and oversees investment activity within those statutory boundaries; and management executes.

The Legislature:

• Sets governing law and public purpose: Enacts and amends statutes (primarily N.D.C.C. Chapter 21-10) that define the SIB's mandate, powers, fiduciary duties, governance structure, and the funds under its care.
• Approves budgets and resource authority: Authorizes the SIB's operating budget, staffing levels, and major expenditure categories through the biennial appropriations process.
• Provides oversight and accountability: Exercises oversight through interim Committees, hearings, reporting requirements, audits, and confirmation or review processes.
• Does not direct investments or operations: The Legislature does not select investments, set asset allocation, hire managers, or manage day-to-day operations.

Reporting Role of the SIB to the Legislature

The SIB has a statutory duty to report to the North Dakota Legislature to support transparency, accountability, and legislative oversight — without compromising the Board's fiduciary independence. The SIB reports what has been done, how public resources are safeguarded, and whether statutory intent is being met — while the Legislature retains oversight authority and the SIB retains fiduciary and operational independence.

The SIB’s reporting role includes:

• Periodic and statutory reports: Providing required reports on investment performance, financial condition, fund status, and compliance with governing statutes and policies.
• Budget and appropriation support: Submitting budget requests, expenditure reports, and staffing information necessary for the Legislature to exercise its appropriation and fiscal oversight responsibilities.
• Audit, risk, and compliance reporting: Communicating the results of independent external audits, internal audit activity, and material risk, control, or compliance matters relevant to legislative oversight.
• Testimony and legislative engagement: Appearing before legislative Committees to explain results, respond to inquiries, and provide factual, non-advocacy information on the SIB’s activities and governance.

The ND State Investment Board

Board Charter

Purpose

1. SIB clients receive investment returns, consistent with their written investment policies and market variables, in a cost-effective manner and under the Prudent Investor Rule.
   1. This objective will be evaluated based on the following:
      1. Comparison of client fund's rate of return net of fees and expenses, to that of the client's policy benchmark over a minimum evaluation period of 5 years.
      2. Comparison of the client fund's risk, measured by standard deviation of net returns, to that of the client's policy benchmark over a minimum evaluation period of 5 years.
      3. Comparison of the risk-adjusted performance of the client fund, net of fees and expenses, to that of the client's policy benchmark over a minimum evaluation period of 5 years.
2. Potential SIB clients have access to information regarding the investment services provided by the SIB.

Board Composition

Members of the SIB are set forth in Chapter 21-10 of the N.D.C.C. The Board comprises the following members:

1. The governor;
2. The state treasurer;
3. The commissioner of university and school lands;
4. The director of workforce safety and insurance;
5. The director of the office of management and budget;
6. Two members of the Teachers’ Fund for Retirement Board, or the Board’s designees, who need not be members of the fund, as selected by that Board;
7. Two members of the Public Employees Retirement System Board, as selected by that Board;
8. Two members, each of whom by experience is familiar with institutional investments, appointed by the governor. One initial appointee shall serve a term of three years, one initial appointee shall serve a term of five years, and all subsequent appointees shall serve five-year terms; and
9. Two members, one from the senate and one from the house of representatives, or the member’s designee, who serve on the legacy and budget stabilization fund advisory board, as selected by that board to represent that board.

Charge and management of the business: The SIB will have general charge and management of the business of TFFR and the SIB, subject to law, administrative rules and regulations, and governance policies. The SIB will make such policy as necessary to fulfill this obligation.

Representation by Designees: When the statutes allow a designee to represent a member of the SIB or an alternate to represent the TFFR or PERS Board, the Chair will recognize the individual for the record, and the individual(s) will then have the right to vote on matters before the SIB.

Administrative Support for TFFR: The SIB will be responsible for the operation of an administrative office that will provide support services to TFFR and the SIB.

Committee Composition

• Three (3) members serve on each Committee, all drawn from Board membership, except the Investment Committee and the Audit, Risk and Compliance Committee, which each have five (5) members.
• The Investment Committee shall include two external investment professionals, who may be either active or retired and shall have substantial institutional investment experience.
• The Audit, Risk and Compliance Committee shall include a representative of the three groups on the SIB — the Legacy & Budget Stabilization Fund Advisory Board, a TFFR representative, and a member-at-large — together with two members selected from outside the SIB and the RIO.
• Budget and Finance Committee members should be financially literate and statutorily aware, including at least one member with experience in public budgeting or appropriations.
• The Budget and Finance Committee should also include an external, non-voting member to represent TFFR and an external, non-voting member serving as a budget analyst assigned to the agency by the OMB.

The Board Chair will propose a slate of Committee members — based on the match between each Committee’s recommended capabilities and members’ interests — for Board approval. The Board may also form an investment advisory council. External Committee members shall be independent and free from material conflicts of interest, are subject to applicable ethics, disclosure, and recusal requirements, and their independence is reviewed at appointment and periodically thereafter.

Vacancies, Holdovers & Continuity

A vacancy occurs upon: written resignation effective date; removal from an officer role (officer vacancy only); removal from Board membership (member vacancy; statutory); death; permanent incapacity; loss of eligibility; disqualifying legal status, if applicable; or failure to attend (threshold to be defined). The Executive Director will notify the Board within five business days of a known vacancy event; the Chair notifies the appointing authority within ten business days where applicable; and a log will be maintained.

• Resignations: Must be in writing and delivered to the Chair; if the Chair resigns, delivered to the Vice Chair, with the Executive Director receiving a copy for records. A resignation is effective upon Board acknowledgment unless a later date is specified; an immediate resignation between meetings is effective upon receipt and acknowledged at the next meeting. Acknowledgment is entered into the minutes and governance records are retained.
• Removal: Board membership removal is governed by statute and the appointing authority; the Board’s internal authority is limited to officer roles and internal sanctions consistent with law and policy.
• Alleged misconduct: The Chair refers the matter to the GPRC (or designated committee) for review; legal counsel is consulted; and Board action is limited to internal steps (censure, committee removal where permitted, referral to the appointing authority, and the like).
• Holdovers: A member may continue to serve until a successor is appointed and qualified. A holdover should not exceed 90 days without written notice to the appointing authority and Board discussion; the Executive Director and/or Chair will notify the appointing authority at least 90 days before expiration.
• Staggered appointments: Where appointment authority allows, the Board recommends staggered appointments and continuity planning to avoid simultaneous turnover, maintaining a rolling “continuity risk” view of anticipated departures over the next 12–24 months and proactively notifying appointing authorities.

SIB Board Charter

The State Investment Board (SIB) serves as the fiduciary governing body responsible for the long-term stewardship, oversight, and protection of assets entrusted to the SIB on behalf of current and future beneficiaries. Board members collectively assure that investment policies, governance structures, and oversight systems are aligned with statutory mandates, fiduciary duties, and the long-term interests of plan participants, beneficiaries, and the State of North Dakota.

A SIB member is a long-horizon fiduciary steward, governing policy and oversight — not day-to-day management — to protect and grow entrusted assets in a manner consistent with law, purpose, and intergenerational responsibility.

Trustee Duties, Expectations & Continuing Education

Trustee Standards

Each Board member is expected to: prepare for and actively participate in Board and Committee assignments; exercise independent judgment while respecting collective Board decisions; ask informed, prudent questions focused on risk, assumptions, and long-term implications; avoid conflicts of interest and comply with ethics and disclosure requirements (See Disclosure); maintain confidentiality of non-public information; and support a culture of integrity, respect, and continuous improvement.

Committee Service

• Board members may serve on one or more standing Committees.
• Committee service includes deeper research, recommendations and oversight within delegated scopes, while ultimate authority and responsibility remains with the full Board.

Time Commitment

• Regularly scheduled Board meetings
• Committee meetings as assigned
• Periodic education, retreats, and special sessions
• Ongoing preparation and review of materials between meetings

Knowledge, Skills and Competencies

Board members are not expected to be investment professionals but are expected to govern prudently and intelligently. Desired competencies include:

• Understanding of fiduciary responsibility and public trust
• Ability to evaluate long-term risk and reward tradeoffs
• Financial, economic, or organizational literacy
• Strategic thinking and sound judgment
• Willingness to engage in continuing education

Continuing Education

Each member shall complete 10 hours annual continuing education (CE) with the curriculum to be based on Board and Committee capability requirements. Credits may be earned through any combination of online or in-person training including conferences and in-house sessions. RIO staff will track completion.

Collective Responsibility

Authority rests with the Board acting as a body, not with individual members. Individual Board members do not direct staff or make unilateral decisions on behalf of the SIB. Board performance is evaluated through periodic self-assessment.

Committee Authority and Role

Committee Framework

The Board holds the exclusive authority to approve policies, delegations, and major decisions, and remains ultimately responsible for prudent fiduciary processes, while Committees serve in an advisory and oversight capacity by conducting detailed research, developing recommendations for Board consideration, and overseeing and verifying that Board-approved decisions are implemented and performing as intended — without exercising independent approval or execution authority.

Standing Committees act as extensions of the Board's fiduciary authority, performing detailed review, analysis, and oversight within scopes defined by Board-approved charters. Committee authority is collective and advisory unless explicitly delegated by Board action.

Committees:

• Prepare recommendations for full Board consideration
• Monitor delegated activities within assigned domains
• Escalate material risks, exceptions, or policy issues to the full Board
• Verify performance and risk through the use of independent third parties

Oversight of Management and Organization

• Appoint, support, evaluate, compensate, terminate and plan for the succession of the Executive Director — take action regarding the Executive Director consistent with statutory authority.
• Monitor organizational capacity, resources, and internal controls necessary to execute Board-approved policies.
• Assure management operates within delegated authority and established limitations.

Risk, Compliance and Accountability

• Oversee enterprise risks, including Investment, liquidity, operational, legal, and reputational risks.
• Assure effective compliance with Statutes and administrative rules and Board policies and ethical standards.
• Promote transparency, documentation, and timely escalation of issues.

Stakeholder and Public Accountability

• Act as responsible stewards of public trust.
• Balance independence of fiduciary judgment with accountability to Beneficiaries, Participating entities and Legislative and oversight bodies.
• Communicate clearly, professionally, and constructively in public meetings and official settings.

Continuing Education — Institutional Investor Standard of Care

Board members are expected to govern consistent with the standards of a large, long-term institutional investor, informed by peer practices, fiduciary norms, and evolving governance and risk oversight frameworks. This includes:

• Awareness of peer governance and investment practices
• Use of benchmarking and external expertise where appropriate
• Commitment to disciplined, evidence-based decision-making over market cycles

Continuing education supports the Board's ability to meet institutional investor standards and evolving fiduciary expectations. Board members are expected to engage in ongoing fiduciary and governance education to:

• Strengthen approval and oversight capabilities
• Remain informed about evolving investment, risk, and governance practices among peers
• Fulfill fiduciary standards of care

Chair and Vice Chair Charter

Leadership

The officers of the SIB are a Chair and Vice Chair, one of which must be an appointed or elected member of the TFFR or PERS Board. The officers will be elected by the SIB to a one-year term at the first regularly scheduled meeting following July 1 of each year. Vacancies will be filled by the SIB at the first scheduled meeting following the vacancy.

The Chair will preside at all meetings of the SIB. In the absence of the Chair, the Vice Chair will perform the duties of the Chair.

Chairperson's Role

The Chairperson's primary responsibility is to assure the integrity of the Board's process. The Chairperson is the only Board member authorized to speak for the Board other than in specifically authorized instances. The duty of the Chairperson is to see that the Board operates consistently with state and federal law, administrative rules, and its own policies.

The Board agenda will be the responsibility and be coordinated by the Chairperson with the assistance of the Executive Director. Meeting discussion content will only be those issues which, according to Board policy, clearly belong to the Board and not the Executive Director, or in a Board member's opinion, may deal with fiduciary responsibilities. Deliberation will be fair, open, and thorough, but also efficient, timely, orderly, and brief. The Chairperson shall appoint a parliamentarian.

The Chairperson is empowered to chair Board meetings with all the commonly accepted authority of that position (e.g., ruling, recognizing). The Chairperson has no authority to make decisions about policies created by the Board. Therefore, the Chairperson has no authority to supervise or direct the Executive Director. The Chairperson may represent the Board to outside parties in announcing Board-stated positions and in stating Chairperson decisions and interpretations within the area delegated to the Chairperson.

The Chairperson is authorized, in consultation with the Executive Director, to grant approval for international travel by SIB members and to keep the Board informed on travel requests.

The Chair may call recess, enforce agenda/time rules, and refer disputes to the Governance Policy Review Committee (GPRC) for follow-up. The Chair assures deliberation remains within fiduciary scope.

The Chair is the initial point of contact for in-meeting conflict of interest (COI) disclosures and may request temporary recusal pending GPRC/legal review. The GPRC will make the final recommendation to the full Board.

The Chair reviews draft minutes for accuracy/completeness before approval.

The Chair supports leadership bench development with the GPRC (encourages continuing education participation; orients new members; identifies future officer candidates).

The Chair should assure committee outputs reach the Board with clear decision points, cross-committee coordination issues are identified, and follow-ups are assigned.

If the Chair is unable to serve, the Vice Chair will serve as Acting Chair until the Board elects a replacement at the next meeting (or sooner at a special meeting).

Vice Chair's Role

The Vice Chair works with the Chair on agenda planning; supports meeting process integrity; participates in governance self-assessment review; attends key briefings as appropriate. The Vice Chair does not act as spokesperson except in Chair absence or Board authorization.

The Budget & Finance Committee (BFC) and the Audit, Risk & Compliance Committee (ARCC) together provide treasurer-equivalent oversight. They will define handoffs (budget → financial reporting → controls/audit findings).

See also — Travel Policy

Executive Director Charter

Executive Role

As the Board's single official link to the operating organization, the RIO's total performance will be considered to be synonymous with the Executive Director's performance. It is the responsibility of the Board to establish and maintain a job description for the Executive Director.

Statutory “Investment Director” and the Executive Director

In 2021, SIB split the role of the investment director into two roles: Executive Director (ED) and Chief Investment Officer (CIO) with the CIO reporting to the ED. However, the legislation does not reflect this change.

Given that the title of Investment Director no longer exists, the policy should reflect the new titles and roles within RIO. Since the legislation cannot be changed in the short term, the following policy proposal is designed to clarify these relationships (ED and CIO).

References in N.D.C.C. § 21-10, including the “investment director” identified in N.D.C.C. § 21-10-02 and 21-10-05, are understood for purposes of this Governance Policy System to refer to the office held by the Executive Director of the Retirement and Investment Office.

Under the current structure of the Retirement and Investment Office, a single officer serves as the agency head of RIO under N.D.C.C. § 54-52.5 and holds the statutory investment director authority described in N.D.C.C. § 21-10-05, including the authority to sign and execute investment-related contracts and agreements relating to funds under the management of the State Investment Board, subject to the limitations established by law and by Board policy.

The Executive Director has delegated the day-to-day exercise of this investment director authority to the Chief Investment Officer, who signs and executes investment-related contracts and agreements relating to funds under the management of the State Investment Board within the scope of that delegation and consistent with the delegation framework established elsewhere in this Governance Policy System. The Executive Director retains the statutory authority and remains accountable for its proper exercise; the delegation does not relieve the Executive Director of that responsibility.

Chief Executive Authority: Execution Within Delegated Authority

The Executive Director is responsible for executing Board-approved direction within the scope of delegated authority. Execution responsibilities include:

• Implementing approved strategies, policies, and plans.
• Managing operations, resources, personnel, and risk.
• Maintaining appropriate controls and professional standards.
• Providing timely, insightful reporting to Committees and the Board.

Executive Director Role and Authority

The Executive Director will be retained by the SIB, serve at the SIB's pleasure, be responsible for keeping the records of the SIB and TFFR Board actions and perform such duties as the SIB prescribes. The Executive Director will make out and give out all notices required to be given by law, procedures, or rules and regulations of the two Boards.

The Executive Director, as chief executive officer, is accountable to the Board acting as a body. The Board only will instruct the Executive Director through these written policies, delegating to the Executive Director the implementation and administration of these policies. The Executive Director is accountable for assuring compliance with laws, bylaws, and policies.

The Executive Director has the authority to:

• Approve expenditures within approved budgets
• Approve Hiring/Termination of Chief Investment Officer, Chief Retirement Officer, Chief Financial and Operating Officer
• Approve Hiring/Termination of External Managers
• Approve all contracts unless delegated by the Executive Director
• Approve Material Contract Amendments within budget
• Approve Securities Monitoring and Litigation

The Chair speaks on behalf of the SIB. The Executive Director is the spokesperson for RIO.

Communication and Counsel to the Board

With respect to providing information and counsel to the Board, the Executive Director shall:

1. Provide monitoring data required by the Board in a timely, accurate, and understandable fashion, directly addressing provisions of the Board policies being monitored.
2. Keep the Board informed of relevant trends, anticipated adverse media coverage, material external and internal changes, and particularly changes in the assumptions upon which any Board policy has previously been established.
3. Advise the Board Chair and GPRC if, in the Executive Director's opinion, the Board is not in compliance — particularly in the case of Board behavior which is detrimental to the work relationship between the Board and the Executive Director, and Executive Director and staff.
4. Provide the Board with varying staff and external points of view on issues and options as prudent for fully informed Board choices.
5. Present information in a short and simple form.
6. Provide a mechanism for official Board, officer, or Committee communications.
7. Deal with the Board as a whole except when (a) fulfilling individual requests for information or (b) responding to officers or Committees duly charged by the Board (c) as otherwise delegated in accordance with Board policies.
8. Report in a timely manner an actual or anticipated noncompliance with any policy of the Board.
9. Inform the Board Chair and the full Board in a timely manner of any changes related to the resignation or hiring of the Chief Retirement Officer, the Chief Investment Officer, Director of Audit, or the Chief Financial Officer/Chief Operating Officer.
10. Keep the Board informed concerning the delegation of fiduciary authority to any staff member. Every person to whom such fiduciary responsibility authority is delegated is ultimately accountable to the Board as to the exercise and execution of the delegated authority.
11. In the absence of a Chief Risk Officer, the Executive Director serves as the senior accountable officer for the operational risk program and is responsible for reporting operational risk matters to the ARCC and the Board.

1st–4th Lines: Staff and Advisor Charters

Execution Lines

1st Line — Investment Services

The RIO’s management is responsible for financial and other reporting, internal controls, and compliance with laws, regulations, and ethics. The RIO 1st and 2nd Line unit supervisors are responsible for seeing that corrective action on reported weaknesses is either planned or taken within 30 days from the receipt of a report disclosing those weaknesses if known or applicable. The unit supervisors are also responsible for seeing that a written report of action planned or completed is sent to the Executive Director. If a plan for action is reported, a second report shall be made promptly upon completion of the plan.

Chief Investment Officer Charter

1. Participate on the IC and report to the Board as required.
2. Advise and then implement investment policies approved by the IC and the Board.
3. Provide research and administration for SIB client funds and client projects.
4. Recommend investment policies and procedures appropriate for governing the investment of entrusted funds.
5. Lead the development of asset allocations, investment strategies, manager mandates, manager guidelines, investment implementations and investment policies to be approved by the IC and Board.
6. Negotiate manager contract terms and conditions as delegated by the Executive Director.
7. Evaluate money manager adherence to investment objectives, mandate requirements, and guidelines.
8. Provide performance reports to the IC, the Board and Boards of participating funds as a representative of the IC and the SIB.
9. Select, hire or terminate money managers, custodians, consultants, and other outside services needed to effectively manage the investment funds.
10. Recommend to the IC new investment strategies (both internal direct and external), portfolios, and the use of new investment instruments prior to their implementation.
11. Manage direct investment strategies approved by the IC including the allocation of capital within the strategies, as well as security selection, weighting, and trading.
12. Provide rebalance instructions to the fiscal team that comply with client policy statements.

Chief Retirement Officer Charter

Purpose: Assure the Teachers' Fund for Retirement (TFFR) program is administered prudently and in accordance with applicable statutes, administrative rules, and policies adopted by the TFFR Board of Trustees. The Chief Retirement Officer (CRO) supports the governance responsibilities of the TFFR Board by implementing Board policies, providing analysis and recommendations on retirement program matters, and ensuring the effective administration of benefits and member services. The CRO operates within the Retirement and Investment Office (RIO) under the direction of the Executive Director, with the position's primary governance connection to the TFFR Board.

Evaluation Criteria: Compliance with applicable state and federal laws governing the retirement program; effective implementation of TFFR Board policies; accuracy and timeliness of benefit administration, member services, and contribution processing; quality and reliability of information provided to the TFFR Board; responsiveness to plan members, stakeholders, and oversight authorities; and the successful coordination of actuarial, legal, and consulting services supporting the retirement program.

Policy Development and Program Administration: The CRO assists the Executive Director and the TFFR Board in developing administrative rules, policies, and procedures necessary to administer the retirement program. The CRO provides analysis and recommendations on retirement program issues, legislative proposals, and operational matters affecting the plan and supports the Board in carrying out its statutory responsibilities.

Retirement Program Operations: RIO staff, under the direction of the CRO, are responsible for the administration of the retirement program including the collection and processing of contributions, maintenance of member records, calculation and payment of retirement and disability benefits, and coordination with actuaries, legal counsel, and other service providers. Staff will provide the TFFR Board with accurate and timely information necessary to support the Board's oversight responsibilities and fiduciary duties.

2nd Line — Middle/Back Offices and Enterprise Services

Fiscal Services

Purpose: Assure the funds and accounts of SIB clients and TFFR beneficiaries are managed prudently under applicable accounting standards and practices.

Evaluation criteria: Internal and external audit reports, internal compliance controls, the publishing of timely and accurate performance reports and financial statements, and responsiveness and accuracy of reporting to oversight authorities.

Compensation and Benefits

Compensation and benefits, or employment terms for staff shall comply with applicable state and federal law.

Accounting

The master custodian will provide RIO staff with such accounting detail and at such frequency as the staff deems necessary to fulfill the SIB’s reporting requirements. From this information, RIO staff will generate monthly and annual financial statements for each of the trust funds managed by the SIB. RIO staff is responsible to assure the proper valuation of all assets. Formal valuation policies must be developed and implemented utilizing industry best practices and GAAP accounting requirements.

3rd Line — Internal Audit Services Charter

The purpose of the internal audit division is to provide an independent, objective assurance and advisory activity designed to add value and improve North Dakota RIO’s operations. The mission of internal audit is to enhance and protect organizational value by providing risk-based and objective assurance, advice, and insight.

The Director of Audit (DA) will report directly to the SIB typically through the ARCC. Administrative matters will be coordinated with the Executive Director.

The audit staff shall have full, free, and unrestricted access to all RIO activities, records, property, and personnel relative to the subject under review.

The internal audit division will assist RIO in accomplishing its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control, and governance processes.

Functions and units within RIO will be reviewed at appropriate intervals to determine whether they are effectively carrying out their responsibilities of planning, organizing, directing, and controlling in accordance with SIB and management instructions, applicable laws, policies, and procedures, and in a manner consistent with both the RIO objectives and high standards of administrative practice.

The Internal Audit Services Unit is responsible for developing and directing a broad, comprehensive program of internal auditing within RIO. The Internal Audit Services Unit will report administratively to management and functionally to the ARCC.

The Internal Audit Charter requires a QAIP (Quality Assurance and Improvement Program), including (1) ongoing internal monitoring, (2) annual internal assessments, and (3) external quality assessment (EQA) at least every five years.

4th Line — Independent External Auditors and Advisors

The Fourth Line consists of independent external professionals engaged by the Board to provide objective assurance, expert judgment, and independent validation across critical fiduciary, financial, investment, and governance functions. These parties do not manage or execute operations; their role is to independently assess, test, advise, and opine—strengthening Board oversight, reducing blind spots, and reinforcing accountability.

• Investment Consultant — Provides independent advice on investment policy, asset allocation, risk, benchmarks, manager structure, and performance evaluation; challenges assumptions and validates staff recommendations.
• Independent External Auditor — Performs independent financial statement audits and internal control assessments; provides assurance on financial reporting integrity and compliance.
• Governance Advisor — Assesses governance structure, policies, delegation, board effectiveness, and fiduciary practices; benchmarks against leading practices and statutory requirements.
• Master Custodian — Independently safeguards assets, settles trades, reconciles holdings, and provides independent books and records supporting valuation, performance, and control assurance.
• External Legal Counsel — Provides independent legal advice on fiduciary duties, statutory authority, contracts, litigation, ethics, and regulatory compliance.

Collectively, the Fourth Line enhances the Board’s ability to verify, challenge, and validate information and decisions, reinforcing trust, transparency, and long-term fiduciary integrity.

Decision Register Overview

Decision Architecture

Decision Register: Key Board Approvals, Cadence and Reporting (Organized by Committee)

The GPS introduces a Decision Register — a catalogued inventory of the major decisions the Board makes, organized by type, frequency, and required authority level. The Board makes at least 60 major governance decisions over any five-year period.

To support each major decision, the GPS introduces Just-in-Time Peer Intelligence Reports and curated board insights — providing relevant context and suggested questions to ask in advance of each significant vote or action.

The Decision Registry — Purpose & Functions

Decision Architecture

The Governance Policy System is designed to assure that the State Investment Board exercises its fiduciary authority in a disciplined, transparent, and repeatable manner across multiple years. At the core of the Governance Policy System are two reinforcing governance tools:

1. The Decision Registry — a structured inventory of all recurring and non-recurring Board decisions.
2. The Governance Cycle — a calendarized multi-year cadence of Board and Committee activities through which policies are set, decisions are approved, authority is delegated, performance is overseen, and results are verified.

Together, these tools establish a five-year governance cycle that organizes the Board’s fiduciary responsibilities into a structured sequence of decisions, oversight activities, and policy refinements. This approach assures that the Board governs proactively rather than reactively, maintains disciplined oversight of delegated authority, and continuously improves the governance framework over time.

The Decision Registry is the central operating instrument of the Governance Policy System. It is a structured record that identifies, documents, and schedules all key Board decisions required to govern the investment program and the organization.

The Decision Registry serves several governance functions

• Provides clarity regarding which decisions belong to the Board;
• Establishes decision ownership and delegation;
• Schedules just-in-time intelligence and insights (continuing education) in preparation for decisions;
• Assures that decisions are made with adequate preparation and due diligence;
• Aligns Board activity with the organization’s strategic and fiduciary responsibilities;
• Enables multi-year governance planning.

Each entry in the Decision Registry typically identifies

• The decision topic;
• The timing or cadence of the decision;
• The Board authority being exercised;
• The committee responsible for due diligence;
• The intelligence and insights needed in advance to make a prudent decision;
• The information, analysis, and independent advice required;
• The expected outcome or approval.

The Decision Registry assures that every significant Board decision is prepared through an appropriate governance process, including committee due diligence, expert analysis, and independent verification where appropriate.

Complete Decision Register

Full Register

The Governance Cycle

Timing Philosophy

The Governance Cycle is the structured multi-year timing and cadence through which the Board fulfills its fiduciary responsibilities. The Governance Cycle is designed to span five years, with individual decisions occurring on annual, biennial, or multi-year intervals depending on their importance and statutory or fiduciary requirements.

The cycle organizes governance activities into a continuous decision-making loop, assuring that policies remain current, delegated authority is monitored, and performance outcomes inform future decisions. The Governance Policy System organizes the Board’s activities by its powers:

1. Conduct the business of the Board and its Committees

Subject to governing statutes, the Board determines how it will conduct business, make decisions collectively, and delegate to committees and the Executive Director. This stage is where agendas and calendars are set, committee assignments are made, and self-evaluations are scheduled.

2. Set Direction and Policy

The Board establishes policy direction and strategic objectives, defining its expectations regarding organizational mission and strategic priorities, investment policy and risk appetite, governance policies and the delegation framework, and fiduciary standards and performance objectives. Committees may assist in developing policy proposals, but policy authority remains exclusively with the Board.

3. Approve and Delegate Authority

Following committee review and due diligence, the Board formally approves policies and strategic decisions. Once approved, the Board delegates the authority and resources necessary to implement the decision — including authority to the Executive Director and senior staff, implementation responsibility within the Retirement and Investment Office, and defined reporting requirements and performance expectations. Delegation is always accompanied by clear accountability and monitoring expectations.

4. Oversee execution within policy

The Executive Director and staff implement Board policies and decisions. Committees may monitor implementation progress but do not manage operations. The Board and its committees oversee performance, practices, and controls associated with delegated authority, performing oversight within their areas of responsibility and reporting findings to the Board through performance reports, risk monitoring reports, financial condition reviews, operational updates, and strategic progress reports.

5. Verify and Report

Independent assurance mechanisms provide verification of results and governance practices — including internal audit reviews, external audit reports, independent investment performance analysis, governance reviews, and legal and compliance reviews. Committees review independent auditor and advisor reports and present conclusions and recommendations to the Board. The Board evaluates whether policies remain appropriate, whether delegated authority has been exercised prudently, and whether governance practices require refinement. Where necessary, the Board updates policies or governance structures, beginning the next cycle of governance decision-making.

Continuous Governance Improvement

The Governance Cycle creates a continuous improvement loop in which each stage informs the next: Policy Direction → Approval and Delegation → Implementation → Oversight → Verification → Reporting and Policy Refinement. This cycle assures that governance evolves based on evidence, oversight findings, and strategic priorities rather than ad-hoc decision making.

Governance Calendar

The Governance Cycle is operationalized through a multi-year governance calendar derived from the Decision Registry. The calendar schedules Board approvals and oversight activities, aligns committee work plans with Board decision timing, assures that decisions occur with sufficient preparation and due diligence, and distributes governance workload evenly across the year. Some decisions occur annually, while others follow multi-year cycles.

Decision Calendar & Cadence Framework

Timing Philosophy

The decision calendar and cadence was previously undefined. Part 5 of the GPS establishes when decisions are made — creating predictability and preparation time for board members, staff, and committees. The Decision Calendar gives the Board a prospective view of what is coming and when.

Triggers — Event-Driven Decisions

Event Triggers

Triggers That Qualify

• Funding model fundamentally changes
• Liquidity structure permanently shifts
• Regulatory mandate changes
• Internalization model changes materially
• Systemic financial architecture changes
• Inflation regime permanently shifts

Triggers That Do NOT Qualify

• Market drawdowns do not qualify as event-driven triggers
• Short-term performance deviations within expected variance
• Routine operational matters within delegated authority

Benefits of a Defined Cadence

• Adequate preparation and pre-reading time for board members
• Proper committee sequencing before full-board action
• Alignment between executive planning and board oversight cycles
• Consistent pacing that reduces last-minute urgency
• Continuing education linked to the calendar — targeted and just-in-time

Current Governance Calendar

Board & Committee Schedule

Use the explorer below to see what each body decides, and when. Filter by body, year, or quarter, narrow by cadence (how often an item recurs), or search across topics, actions, and rationale. Every item shows the decision or action expected and a short note on why it falls in that part of the year. As-needed, event-driven matters are listed separately, since they activate on a trigger rather than on the calendar.