Investment Committee Research Articles

IMPLEMENTATION OF SHARIA COMPLIANCE AND GOOD CORPORATE GOVERNANCE AT BANK SYARIAH INDONESIA TEBING TINGGI SUDIRMAN 2 BRANCH OFFICE

Shariah compliance is an integral aspect of the banking sector's sustainability and is closely linked to good corporate governance. This study aims to analyze the implementation of Shariah compliance and good corporate governance, along with the challenges faced in implementing Shariah compliance and GCG principles at Bank Syariah Indonesia KCP Tebing Tinggi Sudirman 2. The research utilizes a qualitative methodology, with data obtained from primary and secondary sources. Primary data includes the Shariah Supervisory Board, Shariah Audit Committee, and Shariah Investment Committee. Secondary data consists of policy and procedural documents from the Islamic bank, as well as previous research and studies on Shariah compliance and GCG implementation in the Islamic banking sector. Data collection techniques employed in this study encompass interviews and documentation. The findings reveal that the principles of Good Corporate Governance (GCG) at Bank Syariah Indonesia KCP Tebing Tinggi Sudirman 2 encompass transparency, accountability, responsibility, independence, and fairness. Bank Syariah Indonesia KCP Tebing Tinggi Sudirman 2 has implemented Shariah compliance in accordance with the rules and principles of Shariah in every transaction, utilizing appropriate contracts such as murabahah, musyarakah, mudarabah, ijarah, rahn, and in fund mobilization, mudarabah and wadi'ah contracts are utilized. The bank's products have received approval from the National Shariah Board-Indonesian Ulama Council (DSN-MUI), the authorized institution for issuing Shariah fatwas. The implementation of Shariah compliance at Bank Syariah Indonesia KCP Tebing Tinggi Sudirman 2 involves transaction procedures based on Shariah principles, internal supervision, collaboration with DSN-MUI, employee training and awareness enhancement, as well as external audits aimed at ensuring the bank's compliance with Shariah principles

P186 Long-term safety of ixekizumab in adult patients with psoriasis, psoriatic arthritis, and axial spondyloarthritis

P186 Long-term safety of ixekizumab in adult patients with psoriasis, psoriatic arthritis, and axial spondyloarthritis

Does investment committee mitigate the risk of financial distress in GCC? The role of investment inefficiency

PurposeThe purpose of this study is to empirically examine how the voluntary formation of a specialised investment committee (IC) and IC characteristics affect financial distress risk (FDR) and whether such impact is influenced by the level of investment inefficiency.Design/methodology/approachThe authors use a large sample of Gulf Cooperation Council (GCC) non-financial companies during 2006–2016. A principal component analysis is done to aggregate and derive a factor score for IC characteristics (i.e. independence, size and meeting) as a proxy for the effectiveness of IC. This study also uses three measurements of FDR to corroborate the findings and partitions sample firms into overinvesting and underinvesting companies to examine the potential impact of investment inefficiency on the IC–FDR nexus.FindingsUsing feasible generalised least square estimation method, the authors document that the likelihood of financial distress occurrence decreases for firms with separate ICs. The authors also find that firms with effective ICs enjoy lower FDR. In other words, the probability of financial distress minimises if the IC is large, meets frequently and has a high number of independent directors. However, the authors find neither any moderation nor any mediation effect of investment inefficiency for the impact of IC and IC attributes on FDR. The additional analysis indicates the expected benefits of an actively performing IC are amplified for firms with risk of both over- and underinvestment. These findings are robust to alternative measures of FDR and investment inefficiency, sub-sample analysis and endogeneity concerns.Originality/valueThis study, to the best of researchers’ knowledge, is the first to provide evidence in GCC firms’ perspective, suggesting that the existence of an effective IC is associated with a lower risk of financial distress, and to some extent, the economic benefits of IC are aggrandised for companies with a high probability of over- and underinvestment problems. These results are unique and contribute to a small but growing body of literature documenting the need for effective ICs and their economic consequences on investment efficiency in the FDR environment. The findings of this study carry valuable practical implications for regulatory bodies, policymakers, investors and other interested parties in the GCC region.

일본의 중요토지조사규제법 제정과 쟁점

On the basis of national security and territorial integrity, can the state regulate the use of land and buildings around important defense facilities or on border islands? In response, on June 16, 2021, Japan promulgated ‘Important Land Survey Regulation Act.’ In enacting the Important Land Survey Regulation Act, the Japanese government suggested land acquisition in a specific area by foreign capital as a basis for legislation. Due to the cases of land acquisition in a water source, defense facilities, or border islands, anxiety among Japanese residents and the people is growing. As a background of legislation, the Important Land Survey Regulation Act refers to ‘concerned’ foreign capital and state. It is primarily considering Korea and China as regulatory targets. The Important Land Survey Regulation Act is a regulation law based on the maintenance of the base of national life, maritime sovereignty, and national security. In the future, I think the Important Land Survey Regulation Act will have a direct or indirect effect on Korea. From a national security perspective, laws that regulate direct investment in corporate purchases also exist in the United States and Japan. However, regulations on real estate transactions have recently been introduced from the perspective of national security. In the United States, the Foreign Investment Risk Review Modernization Act (FIRRMA) enacted in August 2018 is a representative law. Real estate transactions are being conducted as a subject of review by the US Foreign Investment Committee (CFIUS). From a national security perspective, Japan is reviewing the case of the United States, which regulates the sale of real estate. However, problems with the bill were pointed out in the process of enacting the Important Land Survey Regulation Act. The issue of unconstitutionality of the Important Land Survey Regulation Act was also raised. In this study, I reviewed the issues and the contents of the law in the legislative process of the Japanese National Assembly : the purpose of legislation and the existence of legislative facts, the subject of regulation and delegation of legislation, forest and water sources, enforcement decree and delegation legislation, resident movement regulation, designation of special zones, and pre-reporting system, etc. The following matters were reviewed on the issue of unconstitutionality inherent in the Important Land Survey Regulation Act : legislative purposes and the absence of legislative facts, violation of the principles of parliamentary legislation, principle of criminal justice, recommendations and orders and criminal penalties, land use investigation and personal information, privacy rights, freedom of thought and conscience, self-denial rights, property rights and compensation systems, etc. The Important Land Survey Regulation Act, like FIRRMA in the United States, is based on national security, Japan primarily aims to protect Japan’s Self-Defense Forces facilities and U.S. military facilities. To this end, ownership and use, and transactions of land and buildings in a specific area are regulated. Second, however, it is a law to prepare for border disputes or maritime disputes between Japan and China, Japan and Russia, Korea and Japan. From the perspective of borders, territories, and maritime sovereignty, the Republic of Korea needs to establish new border protection measures for uninhabited islands and islands.

Participatory Project Cycle Management and Performance of Donor Funded Projects in Mandera County, Kenya

The performance of donor funded projects in the global arena has been linked by previous studies to participatory project cycle management. According to report by senate county public accounts and investment committee report of 2019, 60% donor funded projects in Mandera County did not perform as expected and did not achieve their objectives. The study's particular goals were to evaluate the impact of participatory identification of the project, planning, implementation and monitoring and assessment on performance of projects in Mandera County supported by donations. The research was directed by community action planning theory, Freire’s theory, Arnstein’s Ladder of citizen participation and theory of change.The research was done using a descriptive research approach.. The study's intended audience was 84 donor funded projects in Mandera County. The size of the sample for the study was 16 donor funded projects representing 20% of the total sample size. The selection process used stratified random sampling. 16 project coordinators from the sampled donor funded projects and 344 household heads the households benefiting based on the chosen donor-funded programs in Mandera County. Questionnaires for household heads and interview schedules for the project coordinators were used as the primary data collection instruments. The acquired data was cleaned, coded, and put into the SPSS version 21 statistical package for social sciences. The study discovered that participation of key stakeholders in project identification, planning, implementation and monitoring and evaluation have a significant influence on performance of donor funded projects in Mandera County. The study recommends that organizations executing projects in Mandera County should encourage participation of the community Due to their major impact on the success of initiatives sponsored by donors, they are taken into account in project planning, monitoring, and assessment.. Further studies should be conducted to assess the determinants of low community participation in planning and monitoring and evaluation. The current study only sampled household heads and ignored other stakeholders. Therefore future studies should replicate the current study but widen the scope of the sampled respondents to include other stakeholders. Keywords: Participatory Project, Cycle Management, Donor Funded Projects, Projects Performance, Project Monitoring.

Optimal long-term Tier 1 employee pension management with an application to Chinese urban areas

We formulate a stochastic optimization problem from the perspective of an investment committee responsible for Tier 1 social security pension policies and whose decisions are bound to have relevant economic and social consequences. The adopted modelling approach combines canonical multistage stochastic programming (MSP) with dynamic stochastic control (DSC): the first applies to the short-medium term, the second to the long-term. Through the combined framework, we are able to span a long planning horizon without jeopardizing the accuracy of scenario tree based medium-term planning. We apply this methodology to the Chinese pension system, which relies on two large reference areas for rural and urban populations. In this article, we concentrate on the ever-growing urban public pension system, which is facing significant challenges due to a declining workforce and a rapidly ageing population. This welfare area, originally conceived as a pay-as-you-go (PAYG) system, has undergone several recent reforms to enhance its long-term sustainability and reduce the interventions of the central government required to improve its funding condition. Among those relevant in our setting, is the reduction of policy constraints that until 2015 severely limited the possibility to invest in assets other than traditional, locally traded, long-term fixed income securities. We propose an optimization model in which the decisions of the investment management aim at significantly reducing central government interventions as a last resort liquidity provider and progressively improving the system funding condition. A rich set of computational and economic evidence is presented to validate the methodology and clarify its potential benefits to pension system efficiency.

Investment appraisal: Akwaaba university hostel project

Learning outcomes After completing this case, students should be able to: identify and compute relevant cash flows in relation to a real estate project and compute the net present value (NPV). Determine the target return or cost of capital (by looking at historical economic indicators). Design or formulate a sensitivity analysis to determine the drivers of the project value. Evaluate real estate and other investments taking qualitative and quantitative factors into consideration. Demonstrate the computation of a break-even rate to determine the minimum or maximum revenue or cost required for a project to be viable. Case overview/synopsis This case study is about the Golden Beak Securities Pension Fund that wanted to invest in a Hostel Project in one of the universities in Ghana. Most universities in Ghana faced an acute shortage of on-campus accommodation. Also, the Government of Ghana, in 2017, implemented a programme to make Senior High School in Ghana free. This was expected to increase the number of students who will enter the existing universities. The project was therefore seen as strategic, as it would help ease the pressure of on-campus accommodation while providing diversification for the pension fund. As part of the investment committee’s (IC) quest to improve the skill set available to it, especially in relation to real estate investments, Esi Abebrese was appointed as one of the members of the IC of GSB. Her main task was to collect information on key macroeconomic variables, as well as granular information on project costs and revenues and conduct investment appraisal. Esi was scheduled to make a presentation to the IC on the 15th of October 2019 following which the Committee will debate and make a decision. The project had an estimated cost of GH¢52m with a total number of 3,424 student beds and ancillary facilities. Undertaking the project required moving funds from investments in money market securities with one of the banks in Ghana. The investments in the money market securities were currently yielding about 16% a year. The determination of the cost of capital was critical and Esi and Nana eventually settled on a long-term weighted average cost of capital of 14%. This was after considering the trend of inflation, monetary policy rates, treasury rates, stock market returns and a report on returns on commercial real estate properties in Ghana. An exit capitalisation rate of 20% was also estimated for the purposes of determining the value of the property at the end of the investment horizon. Esi also obtained estimates of cost and revenue for the project and proceeded to carry out a feasibility analysis on the project. This consisted of an NPV analysis and sensitivity analysis on various factors to determine the drivers of the project value. The IC had to take several factors (both quantitative and qualitative) into consideration before making a decision. Esi believed that these factors included the diversification of the fund’s assets, the return on investment, potential oversupply of hostel accommodation, the social responsibility of providing student accommodation and the impact of any prolonged shutdown of the university. Complexity academic level Masters/advanced undergraduate. Supplementary materials Teaching Notes are available for educators only. Please contact your library to gain login details or email support@emeraldinsight.com to request teaching notes. Subject code CSS 1: Accounting and Finance.

British Ornithologists' Union

The BOU is dependent upon a number of individuals whose contribution is scarcely visible, but without whom it would not be viable. Nigel Crocker is one such person, having served the Union in two key roles over many years: as Honorary Treasurer from 1984 to 2000, and subsequently as Chair of the trustees who look after the Union’s investments. Council is delighted to recognize Nigel’s 35-year contribution by the award of the Janet Kear Union Medal. Born in Devon, Nigel was brought up in Cornwall. His interest in birds was encouraged from an early age, both by a neighbour and his grandfather, who bought him his first pair of binoculars. At school he undertook a project on Barn Owls Tyto alba, exploring abandoned Cornish mine buildings to collect owl pellets, something that might not now be encouraged in an age of health and safety! After school, Nigel began a long career with the Trustee and Executorship department of National Westminster Bank, eventually reaching a senior management position. Like many bank employees he had to move around the country as he made his way up the bank hierarchy, with postings in Exeter, two spells in Gloucestershire, interrupted by a spell in Sussex where he met his wife Beryl. He eventually ended up working in Bristol and London, and they established the family home in Somerset near Chew Valley Lake and Blagdon Lake, where he and Beryl have lived for over 30 years Throughout, Nigel has contributed to ornithology in many capacities, notwithstanding the demands of career and family life. In Gloucestershire he undertook Marsh Warbler Acrocephalus palustris surveys for the Gloucestershire Trust for Nature Conservation (GTNC), was county wildfowl count organizer, RSPB and YOC group leader, and served on the Council of GTNC and the Gloucestershire Naturalists’ Society. In Sussex he ran birdwatching classes. He has participated in many BTO surveys and undertaken fieldwork for the Somerset Breeding Bird Atlas project. His particular interest is in waterbirds and waterside birds. Living in Somerset he has been able to witness close to home the colonization of Little Egretta garzetta, Great Ardea alba and Cattle Bubulcus ibis Egrets. Nigel joined the BOU at a time when membership applications were by nomination. One of Nigel's colleagues at National Westminster, Peter Wilkinson, was instrumental in Nigel's nomination, following Nigel's work on Marsh Warblers in the Severn Valley. It was Peter who persuaded Nigel to succeed him as Honorary Treasurer of the BOU in 1984. During Nigel's period as Treasurer, prudent action ensured that it was spared the effects of the Black Monday Stock Market crash in October 1987. In 1997, as Hon. Treasurer Nigel was part of the BOU's leadership team which was responsible for one of the most significant developments ever for the BOU; appointing a full-time administrator, Steve Dudley, when the then long-serving, part-time secretary, Gwen Bonham, chose to retire. The decision to invest more of the Union's resources in securing its long-term administration provided the platform on which all subsequent development and successes of the BOU have been founded. Nigel also served as the BOU’s representative on the UK Dependent Territories Conservation Forum. On his retirement as Hon. Treasurer in 2000, he kindly agreed to become one of the Union's investment trustees, and he has now served for over 20 years in this role. The Union is not alone in benefiting from Nigel's time and expertise. He has also served as a trustee of the Herbert Stevens Trust of the British Ornithologists’ Club and as Vice-chair of the Diocese of Bath and Wells and Chair of its Investment Committee. It is particularly appropriate that Nigel's service to the BOU is marked by the award of the Janet Kear Union Medal as Janet was one of the Presidents under whom Nigel served and they shared a lifelong association with waterbirds. Neil Bucknell

Grouped data, investment committees & multicriteria portfolio selection

Little attention has been paid to the necessity of a principal business context, in which the members of an investment committee decide for the optimal synthesis of portfolios, taking into account several and conflicting investment criteria. The underlying gap widens significantly, considering that mainstream portfolio theory fails to accommodate, both additional investment objectives, beyond expected return and variance, and analysts’ forecasts, when these are coming in the form of discrete recommendations. Our central contribution in this paper is associated with the introduction and standardization of a unified decision support business framework, which deals with all the above complexities and facilitates asset managers in their professional practice. Extensive out-of-sample empirical testing, based on the Dow Jones Industrial Average for a 10-year time period, provides evidence that investment portfolios generated by the methodology, appear with, either equal or superior risk-adjusted return performance, against various benchmarks.

Investment Committee Voting and the Financing of Innovation

We provide novel evidence on voting practices used by the investment committees of prominent venture capital investors in the U.S. A substantial share of these VCs use a voting rule for seed and early stage investments where a single `champion' is sufficient for the entire partnership to make an investment, even if other members are not as favorable. However, the same VCs migrate to more conventional `majority' or `unanimous' voting rules for their later stage investments. We show theoretically that a `champions' model can emerge as the optimal voting rule when outcomes follow a sub-exponential distribution (resembling the investments of early stage VC), but also requires that partners have sufficiently common objectives to prevent strategic overchampioning for pet projects. More traditional voting rules are robust to overchampioning but are more likely to systematically miss the best early stage investments.

Investure, LLC: Investing in Alternative Assets

In July 2019, Bruce Miller, CEO of Investure, LLC (Investure), an outsourced chief investment office (OCIO), is preparing a proposal for Franklin and Marshall (F&M), a small liberal arts college located in Lancaster, Pennsylvania, with an endowment of $350 million. F&M recently began a search to find a new endowment manager in hopes of improving its investment returns and access to alternative assets (AA), such as private equity (PE) and hedge funds. Investure offers outsourced investment-management services to endowments and foundations (E&Fs) with assets less than $2 billion and is one of several companies competing to win the mandate to manage F&M's assets. Investure's approach is to pool the assets of like-minded institutions and significantly increase their allocations to PE. Miller and his team are preparing to meet with the F&M board's investment committee to describe Investure's services and approach to investment management.This case is designed to introduce students to AA and the distinctions among PE, hedge funds, and private capital within this asset class. It focuses primarily on why PE is a difficult asset class to manage and describes several channels available to small endowments like F&M to access PE. The case introduces students to the core vocabulary of PE investing and limited partnership agreements. To make the concepts and terms more concrete, it provides a simple exercise that asks the students to calculate the expected internal rate of return (IRR) on an investment made through a traditional limited partnership (primary fund commitment) and a fund of funds and compare those to Investure's approach. Students must evaluate and discuss the feasibility and attractiveness of each alternative to F&M. In doing so, the case creates an opportunity for students to discuss the current trends and issues many E&Fs confront as they attempt to increase allocations to PE.The case is appropriate for use in an introductory or early class in courses focusing on PE, venture capital (VC), and entrepreneurial finance, as well as in specialized courses for fund trustees interested in AA. The case can be used for the following purposes:1. To introduce students to AA and how they differ from public equities and fixed income.2. To introduce students to the core vocabulary of PE investing and limited partnership agreements.3. To introduce the channels of access to PE investment and evaluate the advantages and disadvantages of each.4. To analyze the returns to limited partners who choose to pursue PE investment under a traditional limited partnership and a fund of funds and compare those to Investure's OCIO model.5. To familiarize students with the current trends and issues motivating the growth in outsourcing of endowment management. Excerpt UVA-F-1971 Feb. 2, 2021 Investure, LLC: Investing in Alternative Assets In July 2019, Bruce Miller, CEO, of Investure, LLC (Investure), an outsourced chief investment office (OCIO), was reviewing the proposal his team would make in an attempt to gain its newest client, Franklin and Marshall College (F&M), a small liberal arts college located in Lancaster, Pennsylvania. F&M had recently started a process to select a new manager for its $ 350 million endowment. In learning more about F&M, Miller felt it was the kind of like-minded endowment and foundation (E&F) his firm targeted, but knew he would face stiff competition to win the mandate. Miller had been recruited to Investure shortly after its founder, Alice Handy, started the firm in 2003. At her previous position as CEO of the University of Virginia Investment Management Company (UVIMCO), Handy had produced a successful track record by increasing the endowment's investments in alternative assets, such as private equity (PE) and hedge funds. Together they had worked to land Investure's first client, Smith College, with a nearly $ 1 billion endowment in 2004. From there, the firm had grown to 12 clients and $ 14 billion in assets under management (AUM) (Exhibit 1). . . .

PP498 Decision Support Tool For Investments In Health Technology Replacement: Experience Of A Public Teaching Hospital In Brazil

IntroductionBased on the needs assessment of the medical and non-medical departments, the Investment Committee of the Hospital de Clínicas de Porto Alegre (HCPA), a teaching hospital in Brazil, recommends on which technologies the limited financial resources should be invested. Technology inclusion requests are evaluated by the hospital's technology assessment unit. For technology replacement, we have found models to assess the criticality of medical equipment, but they were insufficient to support the decision, which involves all departments of our hospital. This study aimed to develop an automated tool to support decision making regarding investments in equipment replacement in the hospital.MethodsA working group was set up with professionals from healthcare administration, clinical engineering and research departments. From the hospital's inventory database, we developed the tool using Google SheetsR. We have defined three departments for pilot testing of the tool: hemodynamics, laundry, and basic research. These departments represent the areas of healthcare, support services, and teaching and research in the hospital.ResultsThe criticality of medical equipment is assessed based on the criteria of function, physical risk, impact, remaining equipment life cycle, intensity of use and number of corrective maintenance actions performed. For the equipment in the administrative, support and research areas, the function and physical risk criteria were replaced by the safety and by the risks to the quality of service criteria. The evaluation is carried out by a multidisciplinary team. The tool categorizes the equipment into low, medium and high criticality.ConclusionsThe tool prioritized the equipment based on objective criteria evaluated by the departments’ multidisciplinary team comprising experts who use the equipment in their activities, the department administrator and clinical engineers, and provided transparency regarding the decision-making of the hospital's Investment Committee. In 2019, the limited financial resources were invested only in the replacement of highly critical equipment. We believe the tool can be reproduced in hospitals in low and middle-income countries.

Investment Board Committee and Investment Efficiency in a Unique Environment

ABSTRACT This study investigates the associations between investment efficiency and both the existence of a board investment committee (IC) and its expertise. Using a sample of industrial firms from six Gulf Cooperation Council (GCC) countries across the 2005–2018 period, we find that IC existence reduces both under- and overinvestment by these firms. We also find that financial expertise among committee members affects firms’ investment efficiency positively. These findings are consistent with the assertion that ICs assist with the monitoring and control of firms’ investments. We also find that ICs reduce over- and underinvestment in firms with high levels of foreign ownership concentration. Our finding that reliance on an investment committee enhances investment efficiency is consistent with the tenets of agency theory in firms dominated by government and family ownership structures. These results are robust to a battery of additional tests that use alternative measures of investment efficiency, and to tests for self-selection bias and endogeneity.

Investment committees and corporate cash holdings

We investigate the association between the voluntary formation of a board investment committee (IC) and corporate cash holdings for a large sample of Gulf Cooperation Council (GCC) firms over the 2005–2013 period. We provide evidence that the existence of a specialized IC increases corporate cash holdings. We also find that several IC characteristics, i.e., member experience, independence, number of meetings, and committee size, are associated with an increase in firms’ cash holdings. Furthermore, the local and foreign institutional ownership of GCC firms moderates the IC-cash holdings relationship. These results remain robust to alternative specifications of cash holdings and endogeneity tests. We contribute to the literature on firms’ incentives to hold cash and to the literature on governance in emerging market contexts.

Investment Committee's Role In Promoting Endowment Gifts

Investment Committee's Role In Promoting Endowment Gifts

Efforts to Increase the Fisherman Income Through Financial Management of the Independent Fisherman Group in Village Mattiro Bombang, Pangkep Regency

This article aims to provide a practical picture to strengthen understanding of the concept of investment plans and the process of preparing a follow-up plan for the design of a village investment committee design and enhancing the knowledge and skills of participants in implementing financial management at the scale of fishermen groups. The method to be used in this training is a participatory method, considering that this method is the most relevant for adult learning methods (andragogy) and the most suitable also for discussing community empowerment programs in development. Training with participatory methods is characterized by respect for the participants. Through training on the financial management of fishermen groups, it is hoped that they can provide understanding to village officials in knowing and carrying out management of fishermen groups. The results of the activity showed the enthusiasm of the participants in the lecture material and discussion session because their views which had been difficult to keep in bookkeeping and governance could be delivered simply and applicatively to the fishing community level. This strategy is to anticipate the fulfillment of the necessities of life, among others by saving and investing, forming a social gathering group, borrowing money, and migrating to other places outside the waters around where they live.

Digital Medicine – The New Frontier for AI in Healthcare

Digital Medicine – The New Frontier for AI in Healthcare

Insight: Calling ERISA Ghostbusters - The Rise of Independent Fiduciaries

Settlement of ERISA lawsuits are increasingly including the hiring of an independent fiduciary to oversee plan processes. With a nod to the movie Ghostbusters, two fiduciary experts examine the reasons for the trend, the role of an independent fiduciary, and how ERISA investment committee activity likely changes when they’re required.

Features of financing NATO's armed forces

The aim of the article is to investigate the peculiarities of financing NATO's armed forces. The following methods were used in the study process: comparative analysis method, correlation analysis, content analysis. The current state of defense financing in the world and in NATO countries has been clarified. Sources of funding for civilian and military budgets and NATO security investment programs are highlighted. The civilian budget covers staff costs, operational costs, capital expenditures and expenses for the International Secretariat's programs at NATO Headquarters. The military budget covers the costs of operating and maintaining the structure of NATO military management bodies. The procedure for the payment of direct and indirect contributions to NATO content by the Allies is disclosed. The tasks of the bodies responsible for financial control over the formation and use of NATO finances are described: the North Atlantic Council, the Resource Policy and Planning Council, the Budget Committee, the Investment Committee, the NATO Independent International Audit Board. Shares of financing of civilian and military budgets, as well as NATO programs by NATO member countries, the ratio of defense expenditures to GDP in NATO countries, the share of capital expenditures in the structure of defense expenditures of NATO countries are analyzed. The volumes and structure of defense financing expenditures in Ukraine are compared with NATO countries. It is revealed that during 2014-2018 Ukraine significantly increased the amount of defense financing, at the same time the share of capital expenditures in the structure of defense spending in Ukraine remains insignificant. It is proposed to increase the share of expenditures on military investments and innovations, purchase of armaments and military equipment, construction of military facilities and, at the same time, limit the share of current expenditures on the maintenance of the armed forces.

Divestment as an ESG Tool: Calpers and Tobacco Stocks (a)

This case uses the California Public Employees' Retirement System (CalPERS) to set the stage for unfolding an analysis of economics and values in the decision to divest tobacco stocks and bonds from the internally managed portion of the CalPERS portfolio. Written from public sources, it offers a discussion about fiduciary responsibility for long-term retirement security and investment policies around environmental, social, and governance (ESG) strategies for the public pension fund. The material includes financial data that further allows calculations and discussion on tobacco investments outperforming the broader market. This A case opens with the CalPERS investment committee having made a decision to recommend removing tobacco investment restrictions. The CIO reflects on whether supporting investment in tobacco firms conflicts with CalPERS's member health and health care mission. Did supporting continued divestment mean CalPERS was putting its own social priority and ideals ahead of its clients' investment goals? The case data should lead most to conclude the fund was breaching its fiduciary duty. Excerpt UVA-F-1948 Rev. Jan. 22, 2021 Divestment as an ESG Tool: CalPERS and Tobacco Stocks (A) As he prepared for the December 2016 Investment Committee meeting, Ted Eliopoulos was conflicted. As the chief investment officer (CIO) of the California Public Employees' Retirement System (CalPERS), he oversaw an investment office of over 300 employees and was responsible for investment policies, risk management, corporate governance standards, and environmental, social, and governance (ESG) strategies for the public pension fund. At a time when some worried that the rising numbers of California retirees put significant burdens on pension funds, Eliopoulos was under pressure to shore up long-term retirement security while also staying true to the state's ESG principles. He knew this would require some difficult decisions. California's promise to pay pension benefits in future decades entailed a fiduciary obligation to ensure that as market conditions changed, the balance between risk and return on CalPERS's investments was appropriate. In 2014, CalPERS had initiated an investment strategy review under the Policy Revision Project, and by the spring of 2016, this had led the investment committee to revisit the organization's restrictions around tobacco investments. Over 15 years earlier, tobacco stocks and bonds had been divested from the internally managed portion of the CalPERS portfolio, though they were still permitted in externally managed portfolios. The belief at the time was that the tobacco industry would not survive the heavy regulation headed its way, nor would it recover from the immense litigation against tobacco companies. Despite these threats, by 2016 the tobacco industry had outperformed the broader market substantially, with significant cumulative returns. . . .