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The term "fiduciary" characterizes a variety of relationships in which one party
acts for the benefit of another. Members of the State Investment Board are fiduciaries whose mission is to
manage investments for retirement and public trust funds "with the highest standard of professional conduct
for the exclusive benefit of fund beneficiaries." The primary investment objective and basic fiduciary
responsibilities, as listed below, are the foundation of WSIB's financial integrity and performance.
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"The Board shall establish investment policies and procedures designed exclusively to maximize return
at a prudent level of risk." (RCW 43.33A.110)
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| Prudence |
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The Board "shall invest and manage the assets entrusted to it with reasonable care, skill, prudence,
and diligence under circumstances then prevailing which a prudent person acting in a like capacity and
familiar with such matters would use in the conduct of an activity of like character and purpose."
(RCW 43.33A.140)
"The Board shall consider investments not in isolation, but in the context of the investment of the
particular fund as a whole and as part of an overall investment strategy, which should incorporate risk
and return objectives reasonably suited for that fund."(RCW 43.33A.140 (1))
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| Loyalty |
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Members owe an absolute duty of loyalty to the Board and beneficiaries of the funds. A 'conflict of
interest' and breach of the duty to loyalty exists whenever a member takes any action that is, or reasonably
appears to be, influenced by considerations that are not in the best interest of the beneficiaries. Subject
to the Executive Conflict of Interest Act, voting and non-voting members may not use their position for
personal gain, self dealing, or to receive financial benefit. (Paraphrasing from SIB Code of Conduct
Policy 2.00.100, Pg. 16, and RCW 42.18)
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| Diversification |
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| The Board shall diversify investments, unless, members reasonably determine the purposes of a particular
fund "are better served without diversifying." (RCW 43.33A.140 (2)) |
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