With an ambitious programme of works lined up for 2022, Fund Boards Council is seeking to support fund boards in answering questions such as what are the key indicators that a fund board is performing well? Conversely, what warning signs should fund board directors be looking out for that that may not be well in and outside the boardroom?
SIX key areas form a strong basis for monitoring and measuring fund board effectiveness over time. This was the conclusion from a group of experts who shared their insights and experiences at FBCs inaugural meeting of Fund Board Effectiveness programme.
The meeting, held in October 2021, convened more than 40 investment professionals from across the fund management industry, with a specific representation of board directors, to explore the key factors that contribute to a high-performing fund board. These included, amongst others:
- The quality of discussion
- The robustness of the challenge of directors, and importantly
- How that challenge is received, documented and addressed?
The group also examined the role of the company secretariat and the important part co-secs play in supporting high-performing boards. Also prominent among the criteria discussed were an ability to access and effectively use external perspectives and a commitment to continuous development and improvement of the fund boards operations.
The discussion also drew on the panel’s expertise to define some of the warning signs directors need to look out for that all might not be well in the boardroom. If a board is overly focussed on regulatory box-ticking, feels unable to challenge the rest of the business, or conversely is too independent of the thinking of the rest of the firm or if directors are seeing an increased incidence in surprises, these can all be signs that the fund board may need to reassess its workings.
With the majority of fund boards now well-established in their third or more year of operation and with a couple of cycles of Assessment of Value under their collective belts, many firms are now turning their attention to the wider effectiveness and opportunities of their fund boards.
This has been brought into sharp relief by the increasing scrutiny that the Financial Conduct Authority (FCA) is placing on the work of fund boards and the unique function they fulfil in firms’ overall governance structures. Given the specific challenges faced by fund board directors and the distinctive nature of their work, FBC is developing a programme of initiatives dedicated to supporting fund board directors through board effectiveness reviews, monitoring tools, support with recruitment and onboarding of iNEDs and training and mentoring. Watch this space for more information on the FBC Fund Board Effectiveness programme coming in the New Year and in the meantime, FBC Corporate Members can access the full discussion from this event via Member Portal.
Details of FBC’s Fund Board Effectiveness programme will soon be available on fundboards.org, and if you’d like more information on how FBC may be able to assist your fund board in operating at its very best, get in touch at contact@fundboards.org
