Go down when the markets go down. And private credit. We expect private credit to generate low teens, anywhere from 912 a year, highly cash, meaning most of the 912 is income, that off sets the liquidity, you have cash flow coming in as markets correct downward. We think joe, the movement you have taken to take some money out of equity markets which in the longterm is your highest growth and return asset and spreading it into other assets that have higher returns, at least higher than assumed rate but lower volatility will give you the opportunity to earn that 7. 5 with less risk of a major downturn. The numbers we developed for you that are part of the Asset Allocation assumption did indicate over the longer term, the more diversified portfolio had an expected return of just below 8 . If we take on more leverage, it will be the result of return. Theres leverage in private equity thats sort of normal. Im looking at the gross leverage amount. And probably more a higher gross exposure, but less net exposure. Commissioner can i add one quick comment, page 35, and so talking about opportunities on where to get return in an expected low beta return market. Youll see here in tracking here, our tracking is low. Its in the 5th percentile low. 10 years its in the 7th percentile. Theres a good selection to boost returns here. Nothing extraordinary in terms of risk but youre swapping some beta for alpha risk. That will show up in the plan youre developing. Thats correct. Extending that comment into private markets, private markets have greater manager dispersian and they have something you dont find in Public Markets, more persistence of outperformance. If you continue to invest in out performing managers in markets, the likelihood of adding alpha is higher. So you certainly have seen that historically in private Equity Program. We would hope to see that in your private debt program and more of it in your real assets and real estate program. Another reason to protect our reputation to become a desirable limited partner. Bringing together two comments from commissioner driscoll and commissioner stansbury about the allocation of private debt, one thing to keep in mind, while our allocation to private debt is lower than a couple of allens clients, our allocation to other assets, real estate, real assets and private equity is higher. We have about 35 between those assets. And a lot of clients are more like in the 2025 range i believe. You said were on the higher side than most . Yes. As we think about answering two questions. Where do we want to take risks and how much do we want to take. Is we are electing to take a more material risk in amount of risk in private equity than many of our peers. So looking at the charts thats Asset Allocation. But that would be true of real asset real estate as well. So if you look at the private debt, about the same going into i think relative to our peers is amongst some of allens other clients, if you bucket the assets together, private equity, real estate and private debt, were probably going to be somewhat comparable. Bucketed together. The allocations are different. We would have more in private equity, we probably have a little bit more in real assets i believe. Im trying to understand the aggregate. Were lagging behind by three years. We were ahead of our peers by 25 years. Theres good numbers here to look at your program, page 39, which im not going to its an eye chart in terms of numbers but what youll see for each Asset Classes is return versus benchmark, what your rank was in the universe and then we go across the page and look at tracking error, which bill indicated is low. The measure of risk adjusted return for Asset Classes is called information ratio and thats what you see to the far right. U. S. Equity, you dont see a ranking because you under performed the benchmark for this period, so you have a negative number for information ratio and you dont rank negative numbers. If you glance on down that page, International Equity top 13 , fixed income top 9 . Merging market top 9 . The asset returns on a risk adjusted basis and absolute have done quite well other than u. S. Equity. If you turn the page to page 40, private equity and real assets because of evaluation issues dont lend them to doing an information ratio. If you look at the private program, the benchmark is incredibly hard to beat, but among your peers, youre in the top 4 . So a very, very competitive private Equity Program and your Real Assets Program in the top percentile of your peers. Both programs have done very well. On the equity side, if we were to go down through the manager levels, there are a number of managers that under performed which i wont go through in detail, but most of the managers are indeed on watch lists. Page 45, page 46 advent. Page 48, slight under performance by fidelity. Page 49, that has been significant under performance for a long period of time. By and large across a lot of managers, you have done very well, but you do have some managers that have been less than competitive in your manager selection. Commissioner makras. You started to talk about whats leveraged and shared private equity. What else is leveraged in our portfolio. Part of the difficulty is defining leverage. An equity portfolio, you put it at risk you would say its unlevered but because youre buying equity, its leveraged. Its hard to get away from it unless youre in cash but traditionally you think of it in absolute return, you have long short managers and private equity where you borrow and certainly in real estate, you might be up to 50 leverage for a prudent fund. Its hard to answer the question across the portfolio consistently victor. Do we track it at all . Its hard to add up. Would you mind providing that from an asset perspective. Great, thanks. Any other questions from the commission . I have one last question. Going back to the sector charts where we have 519. So in the top left, who out performed us in terms of returns with a lower standard deviation. There are only actually two dots above you. I dont know who they are. I can maybe find out. This is the universe of 55. Some of those are napc clients and i can identify those, the other 55 i cant. It will vary. San bernadino theres no ideal as to whether you should have a lot of credit or not. One of the funds with a lot less money than you in equities has old style rules, every time they earn more than 9 in a year they pay out excess. Thats a prescription for disaster. You dont want to take any down side risk. On the upside, it goes to members as a pension benefit increase which is a good thing but kills the fund. That fund is very anti equity because they cant afford a major downdraft. Weve gone through it with you and the asset application Going Forward is appropriate for the status of the plan. I think the mix we ended up with traded off returns and risks across Asset Classes in a way that as bill said, its not that youre not taking risk, youre taking it differently than others. I understand there are a lot of considerations that go into that, i would expect on a five year basis there are funds with a lower standard deviation. They also have lower returns. On a one year basis, im surprised there are a couple that out performed us with lower standard deviation. Ill see if i can find out who those are. That would be great. Data points. Okay. Did we call for Public Comment on this . We did not. Are there members of the public who would like to address the commission on this topic . When it comes to investing in hedge funds, a Public Comment was made, 2008 was the largest down market in stock market history. The average hedge fund lost between 1820 . The five hedge funds have average losses of 21 . So, before you invest one more penny in hedge funds, i think you should listen to warren buffets reasoning. He gave that advice over a year ago. Should he invest in hedge funds, what is the reasoning, he said no, dont do it. That was good advice. You should do what the state of new jersey is doing, new york city, theyre getting out of hedge funds. Why are they getting out of them and youre getting into them. I cant understand the reasoning. All youre going to get, with hedge funds and we can out perform in any other market. Now the new claim to fame, protection in a down market. Your hedge funds manager said that, not one of you asked him what his definition of protection in the down markets is. So let me 30 seconds. Id like to ask that question, what his definition is of protection in a down market. Youre not going to get it. Youre going to spend hundreds of millions of dollars in management performance fees. Are there any other members of the public . I have your card, do you want to go last . Any other members who would like to address who havent submitted a card . Mr. Ferland, youre up. Can you tell me when i have a minute left . So you did 0. 1 access return over the past five years, thats a lot of salary and fees and asset for 0. 1 . Its very, very, very difficult to out perform a raging bull market. Okay . Youre going to out perform the indexes, which i think you should do, index in a bare market. Thats where its very easy. When i ran a hedge fund, i out performed the s p by 90 in a tech bubble bust. I under performed the nasdaq the first two years and tried to be in the strong indexes, which is what you dont do. But then i sold everything you cant do that, okay . You just cant. Which is why you have to hedge beforehand. You cant time the market like that, okay . You cant figure out when the next crisis is going to come. The crisis is going to come, i made this point before, in the Financial Sector. All of the recent bare markets come from the Financial Sector, not the economic sector, which is what bill and allen keep focusing on. The Financial Sector is youre not going to see it coming. The last couple of times the capacity was in the credit sector. Its going to be in china, japan or europe. You guys have no idea what is going on right now. Zero. Thats where the crisis is going to be. I spend a lot of time on that stuff, i cant see it. I would suggest one of the best things about having hedge funds time. Let me read this stuff and ill tell you. Its actually an honest suggestion. I like to read thank to me, is it public if its a leveraged or not . I believe we can, per se. Then how much is the hedge fund leveraged . Yeah. Id need to verify this with david, but im going to guess right now that its 3. 5. Gross exposures i dont believe its that high, but i believe its below that. If david here, he can comment it. And whats the maximum exposure we can get out of it . Yeah, the max is 4. 5, and the reason it is that high is because the most diversefying strategies is macrostrategies, and your net exposures very, very low. The bets are incredibly small. Its like this currency against that currency, and this Interest Rate bond again that Interest Rate bond. The bets are really slow, but the aggregate headline numbers can be really large. The place that has the least amount of exposures is long shore. Thats typically about 1. 5 or 1. 5 with maybe a net exposure of about 50, but its also the least diversefying. Rick, thank you. Okay. Next item. Item 11, report on managers under review. And you you want to go through this . I we dont really have any material updates. If the board wants to if the board has any questions, wed be glad to answer them. So no material updates from last time . Okay. I was going to say we could take it on submitted. What were you going to say . No, i was going to say [ inaudible ] okay. Why dont we open this up for Public Comment. Any members of the public that would like to address this item . It should be on topic. Its going to be on topic, because its going to be about hedge fund managers. Is that on topic . Thats not on topic. Are there any other members of the public that would like to address the committee . Okay. [ inaudible ] as a clarification for everyone, there was a clerical error on the agenda, and that is the reason items 7 and 8 were taken off. They were generally categorized as a discussion only item, but they had an action. So they need to be i didnt feel it was worth taking action if someone could potentially say that the public didnt get proper notice, so check with staff. Were going to be moving those forward, but that is the only reason that they were taken off the agenda today. Okay. But so going back to my point of reference, those two managers are in this, so thats fine. Okay. Great. Can we move to the next item, then. Great. Next item, please. Item 12, chief Investment Officer report. I had a few item here, commissioners. Another very good month like all the other months this year. Up another 91 basis points. Thats over 200 million in one month. On the calendar year, we are up until 15 , and thats about 3 billion. If you turn to the chat, you will a see that your asserts are at an alltime high, very strong recovery from the trough, and weve recovered well over 100 . You will notice that in the prior year, it during the gfcs we plunged the peak assets were a little over 17 billion, and we plunged to 11. On the narrative, there is annual extended number of graphs, and wed be glad to answer any questions. Im not going to walkthrough them, but the bottom line here is we have a number of action items that we as staff are working through, and we have been having discussion and approval from the board on each of these, and these are the 11 action items on page 3. We were working some of these weve been working on for several years. Others are more recent. And then, youll see a rationale for each of these actions, we wanted to put this in just a brief, cogent form that the board could see in the big picture, our initiatives that are underway, and some of the reasons why. Essentially, you can put it into two reasons as were looking to increase returns, particularly alpha returns, and were looking to decrease risks. In particular, our risk of a large loss in a down market. Allens and any pc has some really good Economic Data that i have here, too. Ive listed it here on page 4. Im going to be making somement coulds on the data on next month. In terms of items that have closed, clearlake, the board approved this is a private debt strategy. The board approved 100 million in october. It closed 100 million in october. The denim is an international strategy. The board asked for 100 million. 100 million has been approved. 50 million was funded in november. The other 50 million will be funded somewhere down the road. Gaw is a private real estate strategy. We asked for 50 million, and we received 50 million. That closed last month. Scout energy was approved by the board last month for 50 million. We did get that 50 million. Stone peak, we got 50 million in the general strategy, we got several million in the other. I do want to alert the board that since the publication of this report, that the rock springs, this is a global primarily u. S. , but Global Real Estate strategy in our u. S. Public equity strategy. The board approved up to 200 million in june. That did close. We funded 100 million of it here on december 1st. Couple other things here, got some great news on personnel front. On january 2nd, kurt brateburg is going to be joining us as managing director of Public Markets. Kurt has a stellar background. He has a tremendous executive presence. He has a very deep and very broad background, you know, across a wide array of assets. Hes a very, very good strat gi strategist. Hes regarded as an exceptional researcher and somebody who has a great deal of poise. In addition, allo martins will be joining hahn and our public equity strategy. And allo is also going to be a great addition to our team. We still do have two ongoing searches. One is for a senior Portfolio Manager of private equity, and another for to assist eunice in private debt. An important headline is that on january 24th, were having a special meeting in order to diverse the fossil fuels in Public Markets will be heard. And on february 3rd, it will be a long one. Total presentation will be an hour and a half or two. We have our managers from pimco as well as any pc, and that will be hosted and led by ellen, and parametric will not presenting to the board a risk presentation strategy to the board. What date is that . That is february 14th, a regular Board Meeting. Yeah. And that concludes the cio report. Okay. Any questions from the board . Commissioner . Just a request. When the exposure chart is readable, please send me a copy. Okay. I believe that well, we will. We will. Are there any members of the public that would like to address the commission on this topic . Seeing one, mr. Perlin mr. Stecil. I would just like to say, you only need four Asset Classes stocks, real estates, stocks, bonds. They are the only four assets that you need, and theyve done very well in the past 100 years. Why do you want to put money in a hedge fund. Why do you think people like warren bust have 100 million in cash and no hedge funds . Because he knows the stock market is going to drop, probably 20 next year, and hes got 100 billion in cash, and thats what we should do, go into a billion dollars in cash, rather than hedge funds, because youre going to lose your money, whether the stock market goes up or the stock market goes down. Up or down, only two. I notice there are only two items here mentioned that are natural resource. Natural resources investments, can we go a little bit more about denim and scout energy, please. I normally dont address Public Comments, but the Investment Firm website is listed. I would encourage you to go to their website if youd like to know more. Thank you. Miss frillen, please. I want to speak to the february 13th meeting thats coming up. Id like to make another suggestion that ellen and bill let me work with them on it. Y youi know, i know. Its a rhetorical question. Yeah, okay. Right. I dont want to waste my time on this. Any pc and pimco are going to be speaking there, okay . Ellen just spoke about the chiller ratio. Thats off the fricken chart. I sent you a few charts yesterday showing you that and a number of other things. I dont want to get into a discussion about that right now. You have to have somebody at the meeting whos presenting an opposite another point of view how over valued bond and stocks are right now. Bring Goldman Sachs in right now. Bring somebody whos going to bring a dose of pessimism and reality and im not criticizing. Allen and i had a conversation before the meeting. We agree on a lot of things. Specifically that youre going to see the financial crisis over seas, and you guys are never going to see it coming, okay . I think he would agree with me on that. I would suggest, if you dont want to do that, and you want to stay in your cozy little Public Pension Fund that you at least bring his client, san bernardino. Bring his client, because they do have risk hedging. Bring them. Its your own little world. This guy, hes usually right. Hes wrong. 30 seconds. Hedge funds lost 12 in the bare market, not 18 to 22 . But thats not the point. The point is you dont have any choice. Public equities last 50 back then. This is better than they did. With a 2. 3 bond market, you have no choice but to find diversefying assets. Time. Thank you, sir. Are there any other members of the public that would like to address the commission. [ inaudible ] will you please turn offer the mic. Just a reminder to members of the public that were trying to conduct Serious Business here, and please conduct yourselves accordingly. Next item please. Next item is item 13, sfdcc manager report. Good afternoon, commissioners. Before you is the monthly board report. I would like to ask if you have any questions that i can answer on this topic. Any questions from the commission on the deferred Compensation Report . None . Okay. Anything you want to any high points you want to touch on . Well, we had recently completed our last seminar, and we are still looking at the data to compare the results over a 306090 day period. The loan Program Continues to be very popular, and we are continuing to meet the needs of our participants as theyre trickling in before the end of the year to meet their tax deferrals. You can contribute up to april. Is it the same for us. No, tax year only. Tax year only. Okay. One of the presentations that manager joey justgin is getting ready to execute, that will executed during the month of january. That will be a lot of work, and it should be completed before we start the whole tpa search process. Thats a lot of work going on, and i know the chairman is calling our next meeting in january. Okay. I just want to tell you thank you for doing that, the survey tracking. Its something thats really important, but its something that were talking about doing on a larger basis on the other side of the plan. Why dont we open this up. Are there any members of the public that would like to address us on the deferred Compensation Report. Seeing none, well close Public Comment. Any other thoughts or comments from the board . Great. Next item, please. Thank you. Next item is 14, schedule of the 2018 retirement Board Meeting. Members of the board, this is the calendar of the scheduled regularly scheduled Board Meeting, including the special meeting of january 24th. Again, its critical we have confirmed all of your availability to be at that meeting at 1 00 on the 24th, and so we look forward to seeing you at that meeting, as well as the regular meetings during the year. If you have any questions, id be happy to answer those. Okay. I think we can take it as submitted. Why dont we open it up for Public Comment. Any members of the public that would like to address us on this topic . Seeing none, well close Public Comment. Next item. Next item is item 15, city and governance report. I guess thats me, yeah, please, come join us. As youre all aware, going back to our offsite earlier in the year, we were working through implementing all the changes that the board voted on, and were doing it in tiers because theres actually quite a bit of work that is being done, and what you have before you today are the changes, so what we sort of grouped as or, like, the first round, and youll see a second and a third round in the first half of 2018. The first round is really policy level review. Weve identified policies that you currently have that were susceptible to amendment to address some of the issues that have been identified in the fundsten report. So that has gone to the Governance Committee. The Governance Committee has reviewed them, with a couple of recommendations here and there, and whats been presented to you has been submitted for your adoption. Why dont well jump forward to that when we get to items 16 and 17 16, i believe zwr oh, sure, yes. Okay. So this was just a report out from the committee, so youre going to see on item 16, youre actually going to see these changes, youre also going to see it on 17 and 18. With that, why dont we call for Public Comment. Are there any members of the public that want to address us regarding the Governance Committee . Seeing none, well close Public Comment. Why dont we move onto item 16 so we can discuss these actual changes. Item 16, amendments to approval terms and policies, so it can be approved by the board at its 2017 board retreat. So in an effort to be efficient, this has been presented identifying all of the recommended edits in one item as to 16, and perhaps its most efficient if Board Members have questions on particular items, that we go to those directly. [ inaudible ] on part of the motion would be to rescind the terms of the esc committee, which we werent amending other than to site if the board takes action, it would have been rescinded as of today. Yeah, and all of the duties of the hg committee have been transferred to this committee. Yeah. It just rolls up. What were doing on esg doesnt change, per se. Its just now what were being done is done with investments so we can get the plan to move all in the same direction at once. I want to say that nothing in here should be much of a surprise to the board. Its things that we have already seen a couple times this year. Once at the offsite, and then, once again when it came before the board. So i guess why dont we just open it up to the board for questions. Commissioner bridges . I do have a question about this at the offsite, and this is regarding the first recommendation, where youre changing it the fiduciary title, recommendation to change it from commissioners to trustees, and i couldnt remember in we came back. Did we check the terms of reference with the city policy . I dont know how its listed on the San Francisco city and county policy and procedures. So what we we came to sort of the im sorry, ashley. I may have cut you off. But the conversation we had was we were in fact all trustees, however, we do have a formal title of commissioner, and that we decided to leave the title for public purports as commissioner. But well use both, is what youre telling me. Theyre interchangeable. Okay. It wasnt stated here. Thats why i was a little confused. In most of the policies, and most importantly, i think the code of fiduciary conduct, there is a reference to the california constitutional provision that identifies all of you as trustees, and refers to there as trustees, and in fact, there were already provisions in some other policies that referred to you as trustees, so that actually wasnt new. Its been a little bit more reiterated through these policies, but there are some such as operations policies where youre referred to as commissioners, and that was deliberate. Because you see that when when you attend city council meetings, youre referred to as commissioners. Yeah, and thats not unusual to have dual titles. On the election ballot, it says trustee. I skbrust want to make sure i just want to make sure that it says thats how its used. But when your appointment when youre coming to the city and the county to the mayor, youre referred tos as a commissioner. From the legal perspective, youre all of the above. Youre a commissioner, a commissioner of a trust, a trustee, a board member. So i think the point is to focus on the fiduciary nature of your roll. And then, you can use the other title in your conduct. Yes. Any questions . Id like everyone to go to page two of the code of conduct, item number i, and if you all can just read through it. I just want us to be practical about page 2 on the code of conduct. Middle of the page is number i. Yeah. Its relative to the affairs of sfers solely through the decision of the executive director. Thats j. Oh, thats j, and thats charter language. Okay. I just want the practical part in the middle of that sentence. It says even the suggestion has to go through the executive director. Thats the charter. Thats charter language. How do we practically do that . Say, we just had a conference. If alans there, wupt to talk to him, and we want a free flow about Asset Allocation at an example. I dont have your permission, but im at a conference that alan is attending. Am i breaking the rules with that simplicity, am i breaking the rules just with that discussion. Charter deals with ad stiff matters only, so if youre at a conference with alan, and you have a suggestion or an investment related, theres certainly nothing that would prohib prohibit, under the charter, you from having that discussion. This has been expanded to include investment, and so i think it was the committees thats the way it was presented to the committee, and thats how the committee voted it out. But from a practical perspective, the charter, i believe, only states administration. Correct, charter. The bare answer suggestion or dictation relates to administrative issues would be done through the executive director, so i think your points well taken. I just wanted to i just want us to be practical about that in the real world. I think the point [ inaudible ] because we have a chair that will work through the executive director with everything, but we also have the investment chair thats the interface with our consultant, and i see a clear difference with our executive director and, say, many managers, and our consultant, who works for us. But yet, this clearly states everything has to go through the executive director, and im okay that. He can keep a list, and he can either give us global permission to talk to people, or you can give us selective permission to talk to people. Its going to be an administrative issue, and i just want it to be known and call it out if thats what it is. And then, the next step is, will it be implemented equally among everybody . If were all trustees, we should all have the same access to everyone beneath the executive director. So if joe gets permission to talk to alan on a subject matter, are the rest of us excluded from that or do we all get that . So i just want to be practical about the implementation of that, because virtually, at every single Board Meeting we have, were asked to do something offline, have that conversation offline. So once we go offline, this kicks in. So one of the things that we had talked about is having a separate section specifically addressing what undue influence is and specific rules around that so that its clearly laid out for the board what it means. And correct me if i am wrong, ashley. Thats something that weve discussed about we discussed. And i intend to bring that forth to the committee because i think it has to be clear for the board. It shouldnt be left to interpretation. And victor, to your point, i mean, youre right. No one should be getting more access than another person, and to the extent of information, its really just to ensure the proceed priority of the process. Yeah. I mean, i think its well intentioned. I just think its a complicated thing to implement. I would agree with that. So if it is, and were going to vote on something, then, i want to know what the implementation is of today. Not tomorrow, not next week, i want to know what it is today. Because when we hired our consultant thats sitting here in front of us, i asked for a calendar item, the first day we hired her, to have her come into this commission for a q a on her service to us, whether shes working for the commission, whether shes working for staff, what comes out, and that was never calendared, so and im at least ill just say for me, we hired a consultant, and his contract took effect on july 1. On july 1, i picked up the phone and i wanted to make sure the contract was tidy and in order and we were on the right track with our new consultant. As chair, when i need permission from the executive director just to read him up and see if the contract was signed. You read that, i have to call up jay and say, give me permission to talk with our consultant. Is our consultant, deputy director, city director, want to address that . Inside is, i dont believe, anything dealing with the administrative repairs, other than dealing with a piece of information. I mean, picking up the phone, asking him if it was a tidy contract, i think, gets more to the substantive matter of is he happy with what were paying him or those types of things. I think that crossed the line, which would need to be addressed through me. So in your kpamping, if it would be is it just the contract signed on time, i see the connection between is everything signed and are you happy and satisfied with the contract, which is something that really needs to be coordinated through the executive director, so i see a distinction between the two examples that you gave. So under the charter, mr. Bryant, can you maybe tell us what undue influence is. The charter generally describes undue influence is not the charter term thats at issue here is official misconduct, which but the charter itself doesnt define undue influence. I think generally speaking, undue influence means that youre wrongfully influenced, but it be by political concerns or money concerns, but thats not a charter concept, thats a general common law principle, eightics principle, contract principle. From your perspective, is there any reason why the legal principle of undue influence should only be limited to the administrative portion of sfers as opposed to investment portion . Well, i think thats really a policy decision as to whether or not you want to control your body that strictly with your rules. I cant think of any legal reason why you couldnt apply it to investment principles. Its very important in that regard because youre dealing with transactions and the investment of funds, so it makes sense, but its a policy decision as to whether or not you want to lay it out in your rules. Okay, but colleagues, im clear, and id like to focus where im talking about. I dont want the extremes of undue influence. I think we all sort of get that. Im focusing in clearly on even just a suggestion needs the permission, and authorization. If thats what we are, then, i just want to know the answers were all going to play by, and i want to know if theyre going to be implemented equally among all of us. Thats all. So the word suggestion, thats not new. Thats already in the terms of reference, am i correct . The only new part is the reference to undue influence and its application in investment matters. Can i ask you a question . What page are you on . You last me a couple times going back and forth. [ inaudible ]. So its probably about halfway through, and its the very first section after the powerpoint presentation. [ inaudible ] the first red line. I can speak to the perspective of the Governance Committee. If we had this incident feerns for administrative matters, and we said why is it only limited to administrative matters, the fact that were interfering with investment matters, and so we thought it should encompass both sides, and we thought it was just a policy gap. In terms of application, ashley, from your perspective, what issues do you see with applying this . I think this is an important statement about the relationship between a board and the executive to whom you delegate or through whom you delegate authority, and thats your executive director,. So it clarifies that youre a policymaking board. You communicate to your executive director your intentions, your goals, your ideas, and your executive director executes, or responds, addresses how to figures out how to respond, and may, in fact, direct you to a designee. That may be your cio or a different designee, but it clarifies that with respect to the two prongs of your authority, which are administration and investments, thats the way the delegation works, and you monitor, and you monitor through the executive director. And the executive director and his designees reporting back to you, rather than having conversations with people who serve the executive director or who serve you. Now, it doesnt mean you cant talk with your executive consultants, talking with your director, as well, its not meant to be a gag order, but it is intended to be the policy approach and peb spective of the board. I dont see these types of policies invoked to address simple conversations that are innocuous. Theyre typically invoked where theres a more egregious say an undue influence situation, and that is where the policy is identified where the executive director can have a conversation with that trustee about what is and is not appropriate, and why, and if that doesnt work, then, you bring it to a higher level. So as a normal course of business, if a commissioner has a question about a particular item or wants to talk to staff, is it normal to go through the Commission Secretary . No. No. Through you. Well, no. In fact, what we say is once the board packet has been distributed, we invite your questions directly. Now, commissioner makros always, i believe, copies me, sends it only to me. I think theres been a few exceptions where he hasnt sent it directly to me. I refer it to staff, everyone answers back. Everyone has a live style. But certainly, if you have questions or need additional information, if we sent out emails, basically, welcoming, asking you to get in contact with us. What this is intended to do is where you are trying to influence or interfere with the administration of the department, both on the administrative side or on the staff recommendation or consultant recommendation side where youre trying to dictate or suggest or interfere with a normal staff and consultant process of coming up with a staff recommendation. And i think the confusion in the language was the undue influence suddenly triggered this idea that undue influence is not limited to administrative issues. In fact, its probably more, you know on the investment side. On the investment side, and so it might have been just a not necessarily skillful way to incorporate the idea that undue influence in trying to influence an investment, a staff, or the consultants recommendation is a violation of this code, as well as could be construed as official misconduct. So i think its sort of an attempt to consolidate it neatly into one paragraph, and i will go back to what you said earlier, which is other plans are looking at separate undue influence policies, and we just i mean, thats the direction i think we intend to go, also. Thats the direction the committee intends to go, for sure. I mean i mean, commissioner makras, what would you propose . I just want to know the rules when we go forward, how we can talk to staff, and an example. I want to have a deep discussion. I dont want to have a soft hello. If i see alan, or i see a manager, i want to ask how are we doing here . Your numbers arent good. Why . Explain to me. This is almost Due Diligence in a positive way for us to understand whats happening with our managers in our companies. So do we if we do a site visit, are we going to take a staff member with us . If thats what we want to do, im okay with it. I just want to know how we implement it because our role is to bring information back, and that means we get it from outside the room. I dont think thats the intent of the policy. I think the intent of the policy is to prohibit not to prohibit you have getting information or having conversations or asking questions, but to use your role can you explain undue influence. Well, i was just going to say, trustees shouldnt be having site visits without the permission of the executive director. Thats just not the role of the trustee. I think that was an example. But a trustee can ask whatever questions is in the Due Diligence with the contractor and the cio that are pertinent to that. Undue influence, perhaps, pushing a particular manager on the consultant with in a private conversation in a context where thats it hasnt been addressed with the executive director first, that that may be undue influence. You know, im not trying to steer away anything by saying, you can still get permission to speak to a manager, and still discuss something inappropriate. We all know from watching other boards that there are circumstances that arise that there are not no compliance wi in compliance with policies, so we cant do it this is just an effort to identify the rules from a board perspective that everyone is supposed to follow, and if theres misconduct, then, thats also identified at the end of this policy as so what can be done, with ke withcensuring. It was anwith censuring. It was an interesting discussion. We are trustees, and it is incumbent on us to shape the policies. So in my mind, i think the tangible next step, if victor wa