Mutual fund directors are getting older and wiser as they oversee a growing amount of assets and number of funds, according to a governance study published by the Investment Company Institute on October 27, 2015.

The ICI’s study, which tracks governance practices from 1994 to 2014, identified a number of trends that would not surprise many fund directors.

The report shows that average net assets overseen by independent fund directors increased to $116 billion, up from $7 billion in 1994.  Similarly, the average number of funds overseen by independent directors increased to 57 from 26 in 1994.

Independent directors are getting older, too.  The average age of independent directors increased to 66 from 62 over the past 20 years.  The percentage of fund groups that established mandatory retirement policies increased to 69 percent from 45 percent, while the mandatory retirement age for those boards crept up to 75 from 72.

The survey’s other key findings included, among other things:

  • The percentage of fund boards consisting of at least 75 percent of independent directors increased to 83 percent from 46 percent in 1994.
  • Nearly two-thirds of all fund boards have an independent chair.
  • The percentage of fund complexes reporting that independent legal counsel serve their independent directors increased to 92 percent from 64 percent in 1998.
  • 97 percent of fund boards have one or more audit committee financial experts.

Our take.  Mutual fund boards are getting older, busier and wiser.  It seems that this trend will continue as fund assets, the number of funds and the complexity of issues continue to grow.