Open-mindedness (OPM) is a construct that is considered a key foundational aspect of learning in individuals, groups and organizations. Also known as critical inquiry or reflection, OPM is believed to increase learning through examination of prior beliefs, decisions and mistakes, and also through openness to new ideas. Renowned theorists including Dewey and Argyris have emphasized the relationship between OPM and learning, yet little quantitative research has tested it or examined moderators of the linkage. The setting for the current study is that of endowment investment committees at U.S. universities and colleges who need to make knowledgeable and well-reasoned decisions about the composition of investment portfolios. Findings indicate that OPM has a positive, significant effect on group learning capacity (LCAP) and also that shared vision, which represents the group's collective purpose and direction, moderates that relationship. The literature review and discussion offer insights about how OPM is related to the research on group conflict, and how shared vision (SHV) differs from concepts such as interpersonal cohesiveness and conformity that have been associated with groupthink. A review of relevant research from the fields of organizational learning, group dynamics, and absorptive capacity provides context for the development of the hypotheses and the discussion of findings.

Institutional investment portfolios with broad portfolio diversification have been correlated with superior performance, but antecedents to investment committees' asset allocation decisions have received little attention. This research examines the effect of a set of group norms called learning orientation on university endowment committees' knowledge acquisition and implementation. Greater knowledge implementation, in turn, is found to contribute to greater portfolio diversification and higher risk-adjusted returns over a 5-year period. In addition, committee members' expertise in diverse asset classes is found to contribute to greater portfolio diversification, having both a direct effect and also an indirect effect via knowledge implementation.

Purpose – The paper aims to help explain how certain smaller university endowments are able to provide investment results that are more typical of much larger endowments. Investment teams' characteristics and risk-reward perceptions are examined in relation to portfolio composition and performance. Design/methodology/approach – This exploratory study uses a grounded-theory approach consisting of 20 in-depth interviews of financial officers at US colleges and universities with assets between $100 million and $200 million. Ten were conducted from the top performance quartile and ten from the bottom quartile. Interviews were transcribed and coded; afterward, emerging themes and constructs were identified. Objective investment performance over a ten-year period was employed from a well-known industry survey. Findings – Top-performing endowments were described as having endowment teams with greater investment expertise, efficacy, decision-making independence and learning commitment than teams from the low-performing endowments. Teams from top-performing endowments assessed alternative investments more favorably and made greater portfolio allocations to them as compared to teams from low-performing endowments. Research limitations/implications – Because of the chosen research approach, the research results may not be generalizable. Practical implications – The paper includes implications for colleges and universities in the management of their endowments, and particularly in the selection of committee and other team members. Originality/value – The paper is original in exploring certain team characteristics and practices of institutional investment decision-makers and their relationship to portfolio composition and performance.

University endowments with broad portfolio diversification have been correlated with performance, but committees’ decision-making process has received relatively little attention. This study is unique in postulating that the committee’s learning commitment and open-mindedness are significant contributors to a decision process that is based on the principles of Modern Portfolio Theory (or, simply, Portfolio Theory). The use of Portfolio Theory as a decision-making framework leads to greater portfolio diversification, which, in turn, leads to higher risk-adjusted returns. This study also demonstrates that greater committee expertise across multiple asset classes contributes to more diversified portfolios.

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