Organization and Role Definition - Washington State Investment Board

INTRODUCTION: BACKGROUND INFORMATION 

5. ORGANIZATION AND ROLE DEFINITION 

WSIB Members 

The Board is comprised of 15 members. Ten are voting members, which include 

three ex-officio members, two legislators (one from the House of Representatives 

and one from the Senate), and five members from different Washington public 

employee pension plans. Five members are non-voting, appointed by the Board, 

and directed by statute to be “experienced and qualified in the field of investments” 

(RCW 42.52.020). 

Membership on the Board, terms, and nomination or appointment procedures are 

outlined in RCW 43.33A.020. Nominations for non-voting members are submitted to 

the Board by the Administrative Committee, and may be referred or recommended by 

anyone. (See Appendix G for the outline of specifications for non-voting members.) 

A list of current Board members, representation, and terms of appointment is 

included in Appendix B. 

Positions on the Board 

Chair: The Board elects a Chair annually from among the voting members. 

Legislative members and non-voting members are not eligible to serve as Chair. 

Vice-Chair: The Board elects a Vice-Chair annually from among the voting members. 

Legislative members and non-voting members are not eligible to serve as Vice-Chair. 

WSIB Staffing 

The WSIB is a Washington state agency. Senior management, a confidential 

secretary, and investment officer positions are state officers and their positions are 

exempt from Washington’s civil service laws. All other positions are classified civil 

service positions. All WSIB staff are state officers or employees. 

The Executive Director 

The day-to-day operation of the WSIB is under the direction of an Executive Director 

appointed by the Board. The Executive Director is the chief staff person of the Board. 

Statute provides for the selection of an Executive Director by the Board, with 

confirmation by the State Finance Committee. The Board may delegate such 

authority as it deems appropriate to the Executive Director. Subject to guidelines 

established in statute and by the Board, the Executive Director may further delegate 

to Board staff any of the Executive Director’s powers and duties, including the power 

to make investment decisions and execute investment and other contractual 

obligations on behalf of the Board. 

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Unless otherwise determined by the Board, the Chief Investment Officer shall assume 

the duties of the Executive Director while the Executive Director is absent for other 

than business reasons. 

Organization 

The WSIB organization is structured similar to most investment management 

organizations, with the Board and management providing firm-wide leadership; and 

major operating units for investment management; operations, risk control, 

financial management, and administration; and institutional relations or client 

services. 

The Investment Division is comprised of investment professionals making and 

managing investments in five major asset classes: fixed income, public equity, 

tangible assets, real estate, and private equity. The division is also served by a 

senior investment officer who is the primary position analyzing portfolio risk and 

developing asset allocation. The division deploys both internal and external 

investment management strategies. 

The Operations Division provides a number of services in support of the investment 

function, including trade settlement, cash management, private market funding, 

cash and stock distributions, foreign and domestic tax matters, and investment 

compliance monitoring. It provides firm-wide risk management, innovation and 

technology systems management, human resources, finance, and administrative 

services. 

The Institutional Relations Division oversees essential areas of strategic 

communications and related duties that are typically found in a client services 

division of an investment management organization. This includes performance 

reporting, corporate governance, proxy voting activities, and managing interactions 

and relationships with external entities to ensure transparency and dissemination of 

accurate and timely information. 

Legal Counsel 

Legal counsel to the WSIB is provided through the Office of the Attorney General 

(AGO). The AGO is charged with providing legal services including advising and 

representing the WSIB and in defending Board members and employees for actions 

performed while in their official capacity. 

In addition, the AGO and the WSIB contract for outside legal services for investment 

and other specialized services to augment the legal services made available through 

the AGO. 

Consultants, Advisors, Managers 



Reason for Hiring Outside Managers 

Some pension agencies hire outside managers to invest all of their assets. A few 

pension agencies invest and manage all assets with internal staff. The WSIB, like 

most fund sponsors, has found a combination of internal and external approaches to 

be the best solution. 

Outside consultants, advisors, and managers are a source of advice, counsel, and 

services, which the Board and staff use to ensure the best combination of skills and 

advice necessary to maximize the return on the assets of the fund. This gives the 

WSIB a depth of highly skilled persons to perform specific tasks and to extend the 

capability of the WSIB. A list of current key advisors, consultants, and money 

managers used by the Board is periodically distributed to members in Board packets. 

With the assistance of staff and consultants, the voting Board members decide 

whether a certain type of asset, or a portion of that asset can be best invested and/or 

managed by internal Board staff or by hired managers. The advice of consultants is 

considered when making investment decisions. 

If managers are hired, the staff and Board must oversee their activities to ensure 

compliance with contract terms and Board objectives. 

Selection Process 

Selecting investment consultants, advisors, and managers is an open, competitive 

procurement process. The Executive Director oversees and approves all competitive 

procurements. The procurement document lists the requirements and services to be 

provided. Procurements are advertised and sent to a broad number of potential 

bidders. 

After the proposals are received, they are reviewed and evaluated by staff. 

Consultants may assist with the evaluation of the proposals received. Staff selects a 

group of finalists based upon a variety of factors, including cost. Interviews are 

conducted by staff, the Board, or one of the Board’s Committees. The final selection 

is typically made or approved by the Board. 

References: 

Members of the State Investment Board 

State Investment Board Organizational Charts 

Outline of Specifications for Non-Voting Members 

Appendix B 

Appendix E 

Appendix G

Organization and Role Definition - Washington State Investment Board

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