Fund Board Effectiveness and Development
- Home
- |
- Fund board effectiveness
FUND BOARD EFFECTIVENESS AND DEVELOPMENT
Fund Board Effectiveness and Development
Primacy of the Fund Board
Fund board directors – both independent and executive – and the teams that work closely with them are facing ever-increasing regulation, scrutiny and direct accountability, extending far beyond the original requirements of the Asset Management Market Study.
The Financial Conduct Authority is very clear about what it terms the ‘primacy’ of the fund board in an asset management firm’s governance structure – leaving directors in little doubt of its expectations that they will appropriately and robustly challenge the wider firm to deliver on its responsibilities to investors.
Examining Fund Board Effectiveness
With this unique and increasingly demanding role, many fund boards are examining their own effectiveness at discharging their duties, upholding high standards of governance and how well prepared they are to tackle both imminent and longer-term product governance challenges.
FBC’s Fund Board Effectiveness and Development programme recognises the specific dynamics of product governance and the unique role of the fund board within their firm’s overall governance structure and aims to support the whole board in delivering the highest possible standards of fund governance on behalf of their investors.
FUND BOARD EFFECTIVENESS AND DEVELOPMENT
Effectiveness in fund governance (and where it differs from corporate governance)
Focuses on fund governance-specific regulation and accountabilities – for example Assessment of Value, Consumer Duty and wider Product Governance topics.
Enables fund boards to clarify their roles and responsibilities in important wider industry issues such as ESG (Environmental, Social & Governance) and Responsible Investing
Acknowledges the potential conflicts of interest between the AFM and the Investment Manager, and with other entities in the organisation
Reflects the specific circumstances of individual AFM directors: for example the role of the iNED (independent non-executive director) on a fund board, the potential conflict between Executive Directors’ board roles and their ‘day jobs’ and for board members who sit on other boards in the group/company.
Recognises that fund boards do not work in isolation and considers fund board effectiveness in the context of the firm’s entire governance structure
FUND BOARD EFFECTIVENESS AND DEVELOPMENT
FBC's Fund Board Effectiveness and Development programme
Board Structure and Composition
Effective Board Process
FBC supports chairs and company secretaries in addressing key challenges around effective board process – for example, the effectiveness of board meetings, optimum engagement with iNEDs, harmonising and streamlining of board packs, efficiencies around minutes, to name but a few areas.
We are developing a programme of activities for company secretaries in the UK and cross-border, including meetings looking at emerging opportunities such as the use of Artificial Intelligence (AI) in effective board process.
Board Purpose and Responsibilities
Many discussions with FBC’s corporate members centre around the role of the fund board in the overall governance structure of the firm and the accountabilities and responsibilities of its directors.
FBC’s Fund Board Effectiveness Barometer covered this topic in detail – exploring how the role of the fund board is evolving, the challenges facing board directors if that role is not well understood more widely in the firm and outlining key considerations and examples of good practice for directors to take back to their own boards.
Extent of Independence
The role of the independent director has grown in scope and complexity in the years since the Asset Management Market Study. FBC’s work includes a range of initiatives that support both the iNEDs themselves in discharging their duties and the firms that appoint them.
In 2023, we launched the FBC iNED Remuneration Study – which provides detailed insights into the compensation arrangements firms have in place for the ACD iNEDs. The study provides participating firms with benchmarked analysis on their own fees and remuneration structures and is included free of charge in FBC corporate membership.
Conduct and Culture
The primacy of the fund board and the importance of a culture that supports robust challenge and effective decision-making is not only a key area of discussion for FBC member firms and the board itself but also an area of considerable focus for the regulator. FBC supports chairs and the full board through research and insights, member discussion events and our Board Assurance Reviews.
Get started
Find out more about FBC’s Board Effectiveness and Development and Board Advisory Services
If you’d be interested in finding out more about FBC’s Board Effectiveness and Development and Board Advisory Services or how it supports fund boards, contact us today.
Membership, Consultancy, Training and iNED Services for Fund Boards
