IDC/ICI Report Shows Increasing Board Independence
A recent report titled “Fund Governance Practices 1994-2008” highlights the increasing independence of fund boards and directors. Among the most significant findings in the empirical data: (a) 96% utilize independent counsel; (b) 88% of fund boards include at least 75% independent directors; (c) 84% utilize an independent board chair or independent lead director; (d) 98% of fund directors have never been affiliated with the sponsor or the complex; and (e) 97% have an audit committee financial expert. The Report was commissioned by the Independent Directors Council and the Investment Company Institute.
OUR TAKE: While the data is somewhat skewed toward large fund complexes, even small funds should understand that the SEC and investors are looking for the indicia of board independence.