Good Governance for Investment Funds
Recent high profile failures in the financial system and fraud in the funds industry have focused renewed attention on corporate governance and the role of independent directors on investment fund boards.As a result, many institutional investors now require a set standard of governance before they will invest in a fund.
Organisations such as the Association of Investment Companies (AIC), the Alternative Investment Managers Association (AIMA) in the UK and the Managed Funds Association (MFA) in the US have recently published specific guidelines to support and endorse independent fund directors in their duties.
The investment industry is at the forefront of the drive towards better governance in the corporate world. By employing effective, professional independent directors within their own funds, the industry has the opportunity to lead by example.
The presence of an independent director on an investment fund board can be a powerful source of reassurance for potential investors - particularly in the case of smaller and alternative fund operators. But it's much more than a matter of perception.
In successful fund structures, it is increasingly recognised that the input of experienced, qualified, professional independent fund directors can lead to real benefits in terms of improved governance and ongoing due diligence but also very practical benefits of improved operational efficiency, risk control and marketability.
Governance is becoming such an important issue that it is increasingly a requirement of investors that funds have a majority of independent directors on their boards and that those directors are seen to be informed and active.
Independent Fund Director Services can help you to find a qualified, experienced investment professional director who will:
- promote an effective agenda and good governance for the Board
- monitor the holdings and activity within the portfolio
- provide independent market, liquidity and counter-party risk reports
- monitor the business operations of the fund and the activities of the service providers
- keep the Board up-to-date with the latest commercial and regulatory developments that may impact upon the funds
We can also offer advice on marketing and compliance support to investment funds.
These services are particularly valuable to funds established and operated by smaller, highly specialised investment firms which often benefit from being highly dynamic and innovative but which rarely have extensive in-house operations, administration and compliance functions.
Contact us now to find out more about Independent Fund Director Services.
The growing importance of corporate governance and the role of independent directors
In the corporate world, there has been increasing emphasis upon establishing common standards of good governance. The Cadbury, Hampel and Higgs Reports and the current Combined Code of Corporate Governance have all given particular emphasis to the role of independent directors.
More recently, the level of media attention on global financial scandals and failures has further focused attention on the role of corporate and fund boards in protecting the interests of shareholders and investors. Independent board and fund directors are increasingly seen as having a key role.
Corporate governance online
The Institute of Directors publishes some useful general factsheets:
Corporate Governance in the UK
The Revised Combined Code
The AIC Code of Corporate Governance adapts the Combined Code specifically to take account of the particular circumstances of investment companies:
The AIC Code of Corporate Governance
AIMA produce a number of excellent guides, in particular:
AIMA's Roadmap to Hedge Funds (2008)
AIMA Guide to Sound Practices for European Hedge Funds (2007)
AIMA Offshore Alternative Fund Directors Guide (2008)
More links can be found on our useful sites page.
In the corporate world, there has been increasing emphasis upon establishing common standards of good governance. The Cadbury, Hampel and Higgs Reports and the current Combined Code of Corporate Governance have all given particular emphasis to the role of independent directors.
More recently, the level of media attention on global financial scandals and failures has further focused attention on the role of corporate and fund boards in protecting the interests of shareholders and investors. Independent board and fund directors are increasingly seen as having a key role.
Corporate governance online
The Institute of Directors publishes some useful general factsheets:
Corporate Governance in the UK
The Revised Combined Code
The AIC Code of Corporate Governance adapts the Combined Code specifically to take account of the particular circumstances of investment companies:
The AIC Code of Corporate Governance
AIMA produce a number of excellent guides, in particular:
AIMA's Roadmap to Hedge Funds (2008)
AIMA Guide to Sound Practices for European Hedge Funds (2007)
AIMA Offshore Alternative Fund Directors Guide (2008)
More links can be found on our useful sites page.
