Independents: the UK goes from famine to feast

The FCA published its Final Report into the UK’s £7 trillion asset management industry at the end of June. The biggest change proposed is that the UK funds should have at least two independent directors– and that 25% of the board should be independent, at minimum.

Should the FCA’s proposal be adopted, as seems likely, it will lead to a revolution in the provision of independent fund directors in the UK. At present there are remarkably few independents on the boards of UK funds. In fact most British based funds do not have any independents on their boards at all.

The majority of UK funds do have large numbers of directors, typically somewhere in the range of five to eight. But in most cases the board is made up of members of the firm that is promoting the fund. Rarely are external, non-executives invited to be part of this group. That is what the FCA wants to correct.

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