The Institute has long supported the critical role of mutual fund directors in safeguarding the interests of fund shareholders. Under the Investment Company Act of 1940, the board of directors of a mutual fund is charged with looking after how the fund operates. Over the years, ICI has supported the intent of the 1940 Act by supporting rule changes that maintain strong fund governance, providing the director community continuing professional development and education, and working to develop best practices that better protect fund shareholders.
In 1999, for example, the Institute convened an Advisory Group of investment company independent directors and senior industry executives that recommended a series of 15 best practice recommendations for fund boards. Many of the recommendations first developed by the Advisory Group were later adopted by the SEC and applied across the fund industry.
To help keep the system of governance strong, ICI has engaged in many activities on behalf of fund directors, including long maintaining a Director Services Committee and sponsoring director conferences and workshops. As an extension of this effort, ICI supported the establishment of the Independent Directors Council, a group of independent directors brought together to advance director education, promote interaction and communication among fund directors, and assist in the formulation of policy positions on issues that impact fund boards.
