Recruiting directors for mutual fund boards will need to advance to another level to keep pace with regulatory and market demands. Recruiting will need to address specific technical and functional skills, address a significantly greater time commitment from directors, build on the teamwork abilities of the board, and address the ever more critical issue of judgement skills as decision making becomes more complex.
The job of the director is only getting harder. The constant decade-long trend of SEC proposals and rulings, accelerating recently regarding CCOs, liquidity, risk and derivatives, makes it increasingly clear that mutual fund trustees are becoming an extension of the regulatory process. Increased investor, regulatory, and media scrutiny of mutual fund and ETF independent directors is changing the nature of how directors are selected and how they perform as a team. Most importantly, it is nearly impossible to create a “safe harbor” as a fiduciary by simply following the advice of the independent outside counsel. A review of Morningstar’s Fund Stewardship Grade process further clarifies the scrutiny that fund directors are under.;
In light of this, George Wilbanks (pictured) from Wilbanks Partners has written a white paper on best practices boards should consider as they recruit new independent directors. To read the paper, click here.