Ignorance is bliss

It is generally easier to identify the managers who have not put together competent fund boards than those who have. This is because poor fund boards are often small in size. And they usually comprise just a few executive directors. Independents, even if there are any at all, will be in the minority.

However, it is also possible to come across fund boards, that The NED would consider to be well below average, that are large in size. And in one or two cases it is also possible to find fund boards that are majority independent which are also below what should be a requisite standard. (That is because there are question marks over the competency or the ‘independence’ of independents.)

There are many managers whose boards are made up entirely of independents but there are others with no independents on them at all, even though their funds are being marketed to third-party investors. In this category are a few of the very largest asset managers in the global fund industry.

To read more on this story, see the July issue of The NED.