Board Assurance Reviews: A useful opportunity to step back and take stock  

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With their work coming under ever-growing regulatory and public scrutiny, fund boards are dedicating increasing amounts of time and effort to reviewing their own performance and overall effectiveness.   

Regulatory expectations about formal board assessments vary by jurisdiction – with the UK, for example, currently having no formal guidance from the regulator in the UK about how fund boards review their effectiveness. However, good board practice and process are central to many discussions during regulator visits and supervisory work, with an expectation that this is something to which boards will have given careful consideration. 

For some firms, effectively assessing the workings of their fund board can mean an annual check-in with directors on an anonymous basis to get insights into the board’s strengths and areas for development. For others, a less frequent, more formal review which independently examines a range of areas from board composition and culture to process and oversight effectiveness, can provide a helpful external perspective on the board’s current efficacy and future development. For others still, it can be a combination of the two.  

As well as assessing how effectively the board is discharging its duties, a fund board review can also provide a useful opportunity to a detailed analysis of the views of directors – both executive and independent – and other executives on a particular issue or challenge facing the board. It also can be a chance to take stock after a significant board initiative, to ensure that lessons learned are embedded effectively into board practice going forward and that directors have an opportunity to think about their own contribution and areas for development as the board’s work evolves.   

Fund boards are a unique element of the governance structure of asset management firms and there are multiple ways firms can get the most out of a fund board review. Fund Boards Council is very pleased to support firms, either in helping them prepare their own internal assessment of their fund board or conducting an external, independent Board Assurance Review (BAR) with insights and examples of good practice from across our corporate membership.  

To arrange an informal discussion about board reviews, please contact Shiv Taneja (staneja@fundboards.org) or Catherine Battershill (cbattershill@fundboards.org).

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