David Brady isn't getting the attention of the board of trustees of Columbia Young Investor. Despite an offer that Brady thought was impossible to refuse (to take over the mutual fund that he formerly ran while charging investors substantially less), the board didn't even blink when rejecting him.
According to a Wall Street Journal report, Thomas Theobald, the independent chairman of the board that oversees the fund said that the board has no plans to consider Brady's offer even though the fund has had subpar performance and could be folded into another Columbia portfolio.
So the WSJ article poses the question: Is the board overseeing their fund doing everything it can to make sure the best possible manager is at the helm?
"I don't think you can simply ignore the proposal," Julie Allecta, an attorney who advises fund boards said.
John C. Bogle, founder of Vanguard Group, said, "It's not Columbia's money, it's the shareholder's money."
Theobald, who sits on the board of 118 Columbia funds said the Young Investor board wasn't obligated to consider Brady because, based on performance numbers provided by Columbia Management, Brady was a bottom performer when he managed the fund from 1994 through to early 2003, according to the WSJ report.
According to Monringstar, however, Younger Investor did better than the competition during Brady's tenure.
So perhaps the question the article poses is a valid one. Are boards doing all they can to put the proper person in charge of a fund?
The staff of Money Management Executive ("MME") has prepared these capsule summaries based on reports published by the news sources to which they are attributed. Those news sources are not associated with MME, and have not prepared, sponsored, endorsed, or approved these summaries.