General Policy 404: "Prudent Person" Standard

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All library investment activities shall use a “prudent person” standard of care. This standard shall be applied in the context of managing an overall portfolio and specifies that investments shall be made with judgment and care, under circumstances then prevailing, which persons of prudence, discretion and intelligence exercise in the management of their own affairs, not for speculation, but for investment, considering the probable safety of their capital, as well as the probable income to be derived. Any investment firms hired by the Library, acting in accordance with this policy and the written procedures of the Library, and exercising due diligence, shall be relieved of personal responsibility for a security’s credit risk or market price or value changes, except in instances of fraud or gross negligence, provided deviations from expectations are reported in a timely fashion and appropriate action is taken to control adverse developments.

 

Adopted by the Board of Trustees December 13, 1999; Revised June 12, 2006; Updated December 11, 2017


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