STEWARDSHIP
GOVERNANCE & RISK
Governance & Risk Management
The Stanford Management Company operates under the oversight of a Board of Directors,
which includes university trustees and outside investment professionals. This structure
ensures fiduciary alignment and institutional discipline.
Fiduciary Oversight
The SMC Board approves the strategic asset
allocation and monitors performance, while the
investment team handles day-to-day manager
selection and capital deployment.
Risk Stress-Testing
The portfolio is regularly stress-tested against
historical scenarios (e.g., 2008 Financial Crisis, 2000
Dot-com Bubble) to ensure that the university
maintains sufficient liquidity for operations during
market distress.
Key Risk Categories:
Liquidity Risk:
Managing the high percentage of illiquid private assets against the
need for annual cash payouts.
Concentration Risk:
Ensuring exposure to any single manager or sector (e.g., Tech)
does not threaten overall portfolio stability.
Inflation Risk:
Utilizing Real Assets (Real Estate, Natural Resources) to protect
purchasing power.
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Section 7: Fiduciary Responsibility
