A formal Investment Policy Statement (“IPS”) for the company

Investment Policy Statement (IPS) for Shake Shack Company
Introduction and Purpose
Shake Shack is one of the American fast-casual restaurants in New York City, United States. Fast-casual restaurant has been one of the fastest-growing concepts in the hospitality industry over the last two decades. Shake Shack started as a hot dog visual aid in Madison Square Park in 2001. Since its foundation, the company has continued to grow in popularity. The firm offers residents with New York-style hotdogs, fries, hamburgers, and milkshakes at a subsidized price. Eventually, the company became a public corporation filing for an initial public offering of stock during late 2014. According to Garcia Osma, Scarlat, and Shields (2018), Shake Shack has total cash of $29.7 million and investment of $36 million as at the end of the fiscal quarter that ended on June 26, 2019. The Investment Policy Statement (IPS) is a guideline on asset investment for Shake Shack that provides a framework for the management of the possessions.
Governance
Randy Garutti will be responsible for approval of the investment policy and the various subsequent changes on it as one of the trustees and Chief Executive Officer (CEO) of the company. However, Randy Garutti will work collaboratively with the board of directors in developing the investment policy and suggesting appropriate revisions to the plan continuously. Besides, the team will assess and report the achieved results before implementing the system in less than a month. The board of directors will have an opportunity of suggesting the needed changes to the IPS. Equally, Tara Comonte will be part of the committee in facilitating effective operation and strategic leadership. Importantly, Tara will focus on broadening support and day-to-day operations in facilitating effective execution of the organization’s strategic priorities. The Chief Financial Officer (CFO) will be responsible for executing all the involved risk management policies. He will implement all the associated risk management policies relative to the set budget. Furthermore, the company’s senior auditor will work in collaboration with the other board of directors in enhancing integrity of all the financial statements. Notably, each of the committee members will have financial insight in reviewing all the financial statements.
The Board of Directors will have an obligation to set the overall investment policy, asset allocation strategy, and approve all the revisions to the Investment Policy Statement (IPS). Equally, they will establish and maintain broad objectives and plans for all the aspects of investment. All the company’s finance is subject to short term volatility, and it intends to maintain a long-term focus on investment to prevent revisions of investment policies based on market fluctuations. Therefore, they can allocate responsibilities among themselves and designate others to conduct specific tasks, such as maintaining accounting procedures and policies.
Duties of the Investment Committee
The investment committee will play a significant role in expediting the attainment of set objectives of expanding both domestically and internationally. Besides, the committee will have an obligation to monitor fixed income, real private assets, and other infrastructure investments. Following the commitments, the investment committee will:
* Initiate monthly liquidations of securities in realizing short term divided and expediting appreciation of capital.
* Maintain records of financial transactions regarding the available resources and other cash in and outflows.
* Oversee payment of all the investment-related invoices and any other income-deducted payments.
* Assess each of the manager’s compliance to the set investment guidelines.
* Serve the position of liaison to the department of accounting in providing relevant investment information for external audits.
Equally, the investment committee will serve as advisors to the Board of Directors and provide evaluation and diligence of the investment managers. The committee will assess the allocation of assets, strategic planning, and other investment strategies. Therefore, it will be in a position of making all the needed recommendations to the board. The committee will play an equally significant role in recommending investment policies based on financial statements. Besides, they will assess investment performance and evaluate all the operations on an ongoing basis.
Purpose of the Investments
Shake Shack will have a core objective of increasing its overall revenue through its investment strategies. Besides, the company will have an opportunity of expediting expansion to both domestic and international markets. The Board of Directors will have to control and account for all the involved costs of managing the plan’s investment.
Investment Objectives
The investment top executives will have to establish an appropriate asset allocation and strategy on investment with an overall return of 4%. The investment program under the governance of IPS can be essential in providing the needed funds for day to day expenses. According to the financial plan of Shake Shack Company, the management will have to expedite a real growth rate of 4% to facilitate the attainment of set goals.
Asset Allocation
The company will utilize strategic assets allocation as the principal strategy of designing a portfolio and expediting the process of attaining the set goals over a stipulated time horizon. The board of d...