Fund governance: What this survey reveals

Fund governance encompasses many issues including boardroom effectivity and outsourcing, and it has numerous touchpoints within ESG. This report visits many of these issues.

With the current Covid-19 pandemic, the action of fund boards has reached a high point of complexity and importance – but even before the outbreak, boardrooms were being called on to step up their level of fund governance under the FCA Assessment of Value regime in the UK.

In this survey, Funds Europe, in partnership with CACEIS, gauges perceptions on the value that independent directors bring to fund boards and how well fund infrastructures, such as delegated authorised corporate directors and third-party management companies – which play a vital role in investors’ protection – are understood.

We also explore diversity and executive pay.

Among our key findings are that:

  • 50% of respondents highlighted people from technology roles as having one of the most desirable backgrounds for directorships
  • 36% felt the asset management industry was responding poorly to the diversity challenge
  • Many feel educational diversity is important for the future of the industry
  • 45% feel asset managers should adhere to the ESG standards they set for other companies they invest in
  • Over a quarter feel executive pay should be linked to average company pay
  • 41% felt the role of the authorised corporate director was not well understood
  • 50% felt the concept of the ‘ManCo’ was understood, but not the detail
  • There needs to be more disclosure on the relationship between fund manager and distributor

The survey’s respondents are based in major fund domiciles across Europe. A clear message is that fund professionals feel there needs to be a more level regulatory approach to fund governance across the EU and the UK.

© 2020 funds europe

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