In the past 10 years, fund boards have steadily augmented their oversight role on behalf of shareholders without any regulatory mandate to do so, reports a recent survey distributed by the Investment Company Institute and the Independent Directors Council.
Fund boards moved toward greater independence starting in the mid-1990s and are now made up mainly of independent directors. Independent directors account for three-quarters of boards in almost 90 percent of fund complexes, ICI and IDC say. Plus, about 75 percent of fund complexes reported having at least one board led by an independent chairman or an independent lead director, an increase from 22 percent of fund groups in the mid-1990s.
“Clearly, fund boards have increased the depth of their oversight as the industry has grown and the issues affecting funds have continued to become more complex,” explains Robert W. Uek, IDC chairman. “This report indicates that shareholders should be confident that directors are keeping a close watch on their funds.”