From the Editor...
Oops...we sent the wrong Editor's Note. Sorry to re-appear in your inbox so soon, but we hope you'll read this, most recent, message:
Whenever the mainstream press covers the intricacies of mutual fund governance and/or the inner workings of fund boards, there is no shortage of reactions among those actually in the business. The recent article in The Wall Street Journal on director longevity is no exception. What independent directors have told us in the days since is that boards handle the issue of tenure as part of routine business, and that by using the Sequoia Fund as an example, the piece did not accurately portray a typical fund board. The conversations sparked by the article have been stimulating and useful, and we've put together a 10 Things list comprised of talking points for directors to review in the interest of making sure all bases are covered when it comes to ensuring their boards are as effective as possible. We're always looking for ideas for 10 Things, so feel free to drop us a line if you've got one.
The way boards deal with director tenure and the host of other issues and challenges that come their way often varies according to a number of factors—including the size of the fund complex they oversee. Those overseeing small fund complexes face certain challenges related largely to the size and available resources at the adviser. These directors get creative when working to overcome those challenges, serving shareholders by tapping personal and professional networks, calling in favors, and choosing where to allocate their own resources wisely. The board of Guinness Atkinson Funds is one such board that recently expanded its size to better serve its constituents, adding former fund counsel Susan Penry-Williams to the tight-knit group that's been together since 1994. She's been instrumental in the education of board members for years, GA Funds CEO Jim Atkinson told FBV.
In the regulatory realm, the fund industry continues to examine the Department of Labor's fiduciary rule and figure out how its implementation will affect various segments of the business. Although it doesn't doesn't immediately touch the boardroom, the rule is something directors should be familiar with and there are likely to be some consequences with which the board will have to deal. Meyrick Payne and Jay Keeshan from Management Practice Inc. have examined the rule and laid out some of the ways in which fund directors may be affected in our latest Viewpoints piece. It's a good primer and a great start to a conversation that is likely to take many twists and turns over the coming months.
Finally, we've updated our piece on the Eaton Vance Funds board to include the news that former Legg Mason CEO Mark Fetting and former BNY Mellon Asset Management COO Scott Wennerholm will join the directors' ranks on Sept. 1. This comes as long-time Chairman Ralph Verni prepares to step down from the helm to serve as an independent director for the year remaining before his full retirement in mid-2017.
Apologies again for the technical glitch (read: human error) that means you're getting a second Editor's Note. Sometimes, Friday mornings are tough...
Hillary Jackson, founding editor, Fund Board Views