Fund Governance Survey Report

IOB is delighted to publish the Fund Governance Survey Report.

This report, prepared by Prof. Blanaid Clarke, McCann FitzGerald Chair of Corporate Law in Trinity College Dublin, presents insight into the views and expectations of investment fund professionals, identifying current practices and vulnerabilities in the practice of good governance in Irish funds and fund management companies.

Download the Fund Governance Survey Report

The report identifies the ways in which fund governance differs from corporate governance and the challenges that arise as a result. It includes research findings from a survey conducted earlier this year with alumni of IOB's Certified Investment Fund Director (CIFD) programme.

Key survey findings include:

• 76% of respondents agreed that the purpose of a fund is simply to invest its capital in accordance with the particular investment programme directed by its promotor/investment manager and set out in its prospectus;

• the most highly valued attributes on the boards of funds and fund managers are: qualifications, expertise, integrity, behavioural skills (including courage, critical thinking skills and independence of mind), experience in the funds sector, and the absence of conflicts of interest;

• a lack of diversity in various forms including gender and ethnicity was least likely to be identified in a list of impediments to fund board effectiveness;

• despite the previous finding, 60% of respondents supported a voluntary target to achieve diversity (27% favouring a target set by the company itself, 20% favouring a voluntary target set by the Regulator and 13% favouring a target set by an industry body);

• 49% of respondents opined that the conflict of interest which exists between the fund manager and the investment manager could not be successfully managed with only 36% believing that it could;

• apparent support for changes in practice to the fund board appointment process and limits to board tenure;

•  82.2% of respondents considered an updated Fund Governance Code aimed at directors of Irish funds or fund managers published by the Central Bank of Ireland (“the CBI”) and applying on a “comply or explain” basis would be valuable; and

• views on the proposed individual accountability regime were both positive and negative with 60% of respondents considering that it would lead to more risk-averse decision-making from directors, 53% considering it would increase directors’ fees and 53% considering it would render it easier to hold directors to account for misbehaviour. 

For those who are interested in the Certified Investment Fund Director programme you can read more here or contact Kate Walsh [email protected]