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.
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.
Through a programme of ongoing proprietary research and events, FBC’s Fund Board Effectiveness and Development programme supports fund board chairs and directors, in the UK and cross-border, as they grapple with critical topics including:
The FBC Database examines the structure of more than 80 Authorised Corporate Director (ACD) boards in the UK, covering over 500 individual directors. This provides valuable insights for firms think to through their own approach to areas such as: clarifying the role of fund board chair (SMF9) and that of the CEO (SMF1), the transition from executive to independent chairs and the appointment of additional independent directors.
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.
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.
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.
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.
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