On January 28, 2010, the Independent Directors Council issued a task force report, “Board Oversight of Subadvisers.” The report discusses: (1) the business reasons for retaining a subadviser and industry trends in the use of subadvisers; (2) board evaluation of the principal adviser’s recommendation and due diligence in retaining a new subadviser, along with resolving any board member independence issues and the process for communicating and reporting to the board; (3) board approval of a subadvisory agreement, including an assessment of the services under the subadvisory agreement and the subadvisory fees (including profitability); (4) the integration of a subadviser into a fund’s business practices and processes, including operations, valuation, proxy voting and soft dollars; (5) a board’s ongoing oversight of a subadviser, including assessing the subadviser’s investment performance and compliance program; and (6) the termination of a subadviser. The report also provides documents, including an outline of various tasks that may be delegated to a subadviser and some of the common provisions found in subadvisory agreements, a sample compliance certification and a sample compliance questionnaire.

The IDC task force report is available on the IDC’s website at

http://www.idc.org/pdf/idc_10_subadvisers.pdf.