Shareholders are increasingly holding Boards to account with regard to Corporate Governance, and regulators are now doing the same for fund managers themselves.
In April of this year, the UK’s Financial Conduct Authority published its Policy Statement PS18/8 which contains a number of measures aimed at improving value for money for investors. From a governance point of view the most significant change is a new requirement that money managers (in FCA parlance “Authorised Fund Managers”, or AFM’s) appoint at least two Independent Directors to their Boards. These Directors’ role is to ensure that each AFM acts in the best interests of its investors, as well as its shareholders – a good step in the direction of transparency and accountability.
As the FCA notes, most AFM Boards are currently populated with employees, and this creates a need to attract suitably qualified Directors ahead of the FCA’s implementation deadline of 30th September 2019. Has the asset management industry woken up to this Board composition challenge? It’s likely to be made more acute by firms requiring, on grounds of confidentiality, that independent Directors hold only one such role.
Fidelio has a deep understanding of shareholders and the asset management industry. We collaborate regularly with leading investors and also have an exceptional network across financial services. For further information on how we can support asset managers in identifying and appointing highly effective Independent Directors, please contact Steve Cheetham on scheetham@fideliopartners.com.