Thursday, August 14, 2008

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UT System Regents Adopt Revised UTIMCO Code of Ethics

AUSTIN – In a move that would keep stringent ethics and compliance rules in place, The University of Texas System Board of Regents approved today (Aug. 14) a revised code of ethics for The University of Texas Investment Management Co. (UTIMCO).

The regents voted to adopt mostly minor editorial changes to the current ethics code.  The most significant revision includes the deletion of provisions prohibiting UTIMCO Board members (directors) from the ability to invest, and consequently, UTIMCO’s inability to invest in private investments held by one or the other.  The deletion effectively allows directors to have up to a 5 percent pecuniary interest in investments also held by UTIMCO, similar to those held by board members at other public endowments in the state – as permitted under the Texas Education Code.

"The adopted change to the ethics rules actually removes potential conflicts by allowing a UTIMCO director to suggest investments to UTIMCO which the director has himself found compelling," said Regents’ Vice Chairman Robert B. Rowling, who also is chairman of the UTIMCO Board of Directors.

The specific change in the code requires UTIMCO board members to annually disclose any investment in which they have a pecuniary interest.  Additionally, board members will recuse themselves from voting on any such investment. 

“We are tremendously proud of the outstanding performance, professionalism, and commitment to transparency and accountability demonstrated under the leadership of the UTIMCO staff and its board of directors,” Regents’ Chairman H. Scott Caven, Jr., said.  “The adopted change simply allows UTIMCO to conform to rules of conduct for other state endowments and removes an arbitrary restriction that reduced the ability of board members to offer their best investment advice.”

About The University of Texas Investment Management Co. 

UTIMCO is a 501(c)(3) investment management corporation whose sole purpose is the management of investment assets under the fiduciary care of the Board of Regents of The University of Texas System. Created in March 1996, UTIMCO is the first external investment corporation formed by a public university system in the nation. It invests endowment and operating funds in excess of $25 billion. UTIMCO is governed by a nine-member Board of Directors. The UTIMCO Board of Directors includes three members of The University of Texas System Board of Regents, one member selected from a list provided by The Texas A&M University System Board of Regents, the Chancellor of The University of Texas System, and four outside investment professionals appointed by the UT System Board of Regents.

About The University of Texas System

Serving the educational and health care needs of Texans for more than 125 years, the UT System is one of the nation's largest higher education systems with 15 campuses – including nine academic and six health institutions – and has an annual operating budget of $11.5 billion (FY 2009) including $2.5 billion in research funded by federal, state, local and private sources. Student enrollment exceeded 190,000 in the 2006 academic year. The UT System confers more than one-third of the state's undergraduate degrees and educates nearly three-fourths of the state's health care professionals annually. With more than 80,000 employees, the UT System is one of the largest employers in the state.

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