From the Editor...

July 8, 2016

By Hillary Jackson

From the Editor...

 

Like many in the financial services industry, chief compliance officers have seen their compensation packages tick up in recent years as the markets and economy have emerged from the financial crisis. With CCOs, there is a wide variance in the amounts of comp—from $110,000 to more than $1 million, according to new data from Management Practice Inc. A number of factors come in to play when setting CCO comp, and MPI examines many of them in its newest report, which also goes through bonus and benefits trends and duties and backgrounds of CCOs.

 

Fund boards' oversight of compliance doesn't just involve providing input on compensation, of course. Compliance touches every part of the adviser and is an area vulnerable to regulatory scrutiny, so it's important to maintain strenuous checks and balances. In our latest 10 Things list, we provide some conversation starters for fund boards beginning a compliance program review process. One area the SEC currently is focused on is business continuity planning, and the compliance department is right in the thick of that. The agency's Division of Investment Management has published guidance on how fund firms can prepare for an unseen disruption in business, and this too is a tool for boards to use when reviewing policies and procedures in place at the adviser. 

 

Understanding the processes of the compliance department and ensuring compliance personnel have adequate resources are key, as is continuing to work toward an overall tone throughout the organization that supports compliance. Our 10 Things lists are designed to stimulate conversation and guide directors through a process; please let us know if there's a topic or issue you'd like to see covered this way.

 

Despite the slowdown that is typical of summer, some boards are being kept busy with personnel issues. The Nuveen Funds board has seen a few new faces at the table in recent years and now has added two more: independent director Albin Moschner and interested director Margo Cook. With two sitting directors in their 70s, these might not be the last additions to the boardroom. The board of Arrow Funds, a small adviser based in the Washington, D.C., metro area, also may be searching for a new director soon as one of its original members has stepped down.

 

Where might the Arrow Funds board and others find candidates? There are a variety of ways to identify potential directors, but one researcher in Singapore maintains that it might be worth hitting the links. In Sumit Agarwal's new paper, he draws a line between women who play golf and women who sit on corporate boards. It's a fascinating approach to figuring out ways in which the issue of gender diversity can be approached, and though it focuses on the corporate world, many of its themes can easily be applied to the fund world. Agarwal's piece is featured in our Added Perspective section, an area for readers to access interesting, relevant research, surveys and other previously published material. If you publish, or read something good, send it our way and we'll add it to the library.

 

The heat has finally hit the East Coast. Enjoy it—or enjoy the comfort of air conditioning—and all the fun and beauty that comes with summer.  

 

For now,

 

Hillary Jackson, founding editor, Fund Board Views

 

 

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