Independent directors who are required to head mutual fund boards by 2006 must have enough authority to perform their duties by pushing back against management, according to a newly released report commissioned by an industry trade group affiliated with the Investment Company Institute.
The Independent Directors Council's report clearly maintains that independent directors need a high degree of autonomy to comply with Securities and Exchange Commission guidelines. The council says independent chairmen must differ from their predecessors by demonstrating unwavering leadership qualities and strict oversight capabilities. Regulators are adamant that independent chairmen must serve as dedicated shareholder advocates rather than a rubberstamp for management.
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