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The chief investment officer is a corporate executive that is charged with the responsibility of handling all investment decisions for the corporation. Usually working in conjunction with the CFO or chief financial officer, the CIO often reports directly to the CEO or chief executive officer of the firm, providing periodic updates on the current status of the company’s investment activities.
Along with being part of the corporate structure for many businesses, the chief investment officer is often a part of the leadership for institutions of higher learning. Universities tend to make investments that help to generate revenue to maintain campuses, scholarship programs, and other important functions. Within this environment, the chief investment officer will advise board members as well as the university president and other officers of the current status of the school’s investment portfolio. At the same time, he or she will make recommendations for changes to that portfolio, and be responsible for initiating any trading activity that is considered in the best interests of the university.
The degree of latitude enjoyed by a chief investment office will vary from one setting to another. In some instances, the CIO will be authorized to make investment decisions up to a specified monetary limit without the need to consult any of the other officers. At other times, the officer may function more in an advisory capacity and require the approval of the CEO and CFO before moving forward with any long-term investing commitments. In all settings, the officer is expected to be extremely proficient with understand the nature of various investment markets, and have the ability to accurately project future performance of any holdings currently within the financial portfolio.
For the most part, the presence of a chief investment officer is usually associated with larger corporations. In smaller businesses, the functions of a CIO may be handled by a finance committee composed of other corporate officers, or be overseen by the CFO. It is not unusual for the CIO to also handle investments other than stocks; this would include property, bonds, and any mortgages that the business may acquire.
In order to function as a chief investment officer, candidates are expected to possess a combination of practical experience and educational credentials. The individual will hold at least some sort of Business Administration degree, and often will also have degrees related to accounting and general finance. In terms of practical experience, many companies will not consider an applicant who does not possess at least five years of background in corporate finance or within the financial community in some capacity. The specific qualifications will often depend on the duties that are assigned to the position with the culture of that particular corporation or institution.
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