As one of a very small number of investment board independent directors who sit on boards in multiple jurisdictions, Marc Saluzzi has a unique insight into how fund governance is playing out across Europe.
We were lucky enough to speak with him earlier this month to chat about his transition from senior industry executive to board director, insights into the positives and pitfalls of a multi-jurisdictional role, his passion for engagement with the investor and more.
Following a career of over 30-years in asset management at PWC, being a member of the CSSF’s Board of Directors (BoD) for four years and two terms as Chairman of ALFI, the Luxembourg fund association, Marc Saluzzi approached becoming an iNED with a sharp focus on opportunity and an ‘empiric approach’ to how he wants his roles to be shaped. Not being comfortable with taking on just one jurisdiction to ensure, in part, he would have ‘access to the entire value chain of an asset manager’, from his first role he took on three boards in the same group in three different countries.
For Marc, this has turned out to be the best of both worlds ‘…you get the full picture, from portfolio management to asset administration. And you have access to the key executives because usually you know when you are sitting on the board of the main ManCo in Europe, all the top guys are around the table, which was very important from my point of view because you want to know who’s running the business and how they are behaving.’
While Marc has been the driving force of his multi-jurisdictional roles, he acknowledges that he was very much aware of the challenge he would have to embrace. He is quick to point out the importance of recognising synergies, as well as the pitfalls, to make the task manageable; for instance, with three ManCo’s in the same group there is the same process, products and distribution footprint, and in countries that have similar regulatory requirements there is manageable scale. ‘You don’t want to underestimate the time that it takes to onboard a group’, but you want ‘to be able to compare, to learn about the best practices of one group versus the other, to be able to benchmark one. Indeed, I believe that working for a single group or on a single BoD is quite a dangerous undertaking’.
These wins on synergy are combined with identifying and staying on top of any differences and general changes in regulation. To do that properly, he advises to limit the geographical footprint of a portfolio of mandates to countries which share the same body of laws and regulations. ‘Do not accept a directorship in a country you do not know from a regulatory or cultural point of view’. Having been immersed in knowledge throughout his executive career, Marc is committed as an iNED to making sure that he has access to the most up to date information. He’s combined this with a high level of due diligence, only taking on mandates with organisations he’s very familiar with and which appoints more than one INEDS on their BoDs, ‘to enable the different perspectives from the group’.
When asked about the differences between the AoV requirement in the UK and the ESMA’s CSA on costs, he points out the differing focus, on costs in Europe rather than investor value in the UK, and to the different outcome of these regulatory requirements. But in both situations, he believes that BoD in general, and INEDS in particular, need to be actively involved. Last but not least, he notes that some fund groups ‘have decided to apply the AoV requirement to their continental funds because it’s a good practice and a great way to communicate with investors’.
Then we hit on Mark’s true passion for focusing on, and engaging with, the retail investor. Even in his other-world post-executive career, the inspiration of his grandfather and uncle, bakers who travelled the countryside to serve remote French communities every day, is heavily influenced by admiration for the deep relationships they nurtured. He believes the industry needs to make ‘significant efforts’ in this respect in all locations. More importantly, “since the enactment of the UCITS directive in the 80s, the only thing that we have done to improve investor protection has been to increase laws and regulation, increase the need for reporting and for disclosure’. But he goes on to make the point that if ‘the retail investor cannot understand those additional laws and regulations, those additional reporting and those additional disclosures, you have not achieved anything.’ He is clear that policymakers have a great role to play in imposing by law a focus on finance in early education. Clearly, this is an opportunity for positive change that comes high on Marc’s agenda.
Mark currently holds iNED roles spanning Luxembourg, France and the UK, including mandates at two asset managers and one asset servicer.
