The board of governors for the mutual fund industry's trade group yesterday endorsed recommendations aimed at giving independent fund directors more power.
The Investment Company Institute's proposals include having independent directors make up at least two-thirds of all fund boards rather than the 40% generally required by law, that former officers or directors of a fund not serve as independent directors of the fund, that independent directors have legal counsel, and that they meet separately from management.
The recommendations were drawn up by an advisory group of interested and independent mutual fund directors and unveiled June 24.
The board urged its members to implement the practices as soon as possible and directed the trade group to monitor the implementation. The recommendations are a response to calls by regulators to give independent directors more power.