The Independent Directors Council (IDC) and Investment Company Institute (ICI) released their biennial report on fund governance practices for and through 2018 based on a survey of fund complexes sponsoring nearly 9,000 funds and in the context of Investment Company Act of 1940 requirements.
Key takeaways include:
- Board independence - Independent directors hold at least 75% of board seats at 89% of fund complexes, compared to a minimum standard of 40% that generally applies to all funds.
- Board meetings - Fund boards most commonly held four regular meetings last year, but one-third held five or more.
- Committee meetings - On average, independent directors participated in 10 committee meetings in 2018 (eight meetings at the median).
- Board leadership - 66% of fund complexes have an independent chair; 27% have an independent lead director.
- Board diversity - The percentage of female directors increased from 20% in 2012 to 28% in 2018.
- Mandatory retirement - 68% of boards have an age-based mandatory director retirement policy - most commonly age 75; just 5% have a policy that considers tenure.
See IDC's release, and additional resources on our Board/Governance Practices and Investment Advisors pages. This post first appeared in the weekly Society Alert!