Fidelity Investments will ask shareholders early next year for permission to split the board of directors overseeing its mutual funds in two. The aim is to better monitor the complex securities its portfolio managers are increasingly gravitating to.
One board will oversee equity and high-yield funds and the other bond, money market and asset-allocation funds.
Fidelity expects that its product mix will become increasingly diverse and that the need for two specialized boards will grow, Ned C. Lautenbach, one of the members of the Fidelity funds board, told the Boston Globe.
Currently, there are 11 people on Fidelity’s board, only two of whom are interested parties, Fidelity Chairman and CEO Edward “Ned” Johnson and James C. Curvey, a longtime Fidelity executive. By splitting the board in two, the company will seek additional directors.
Because Fidelity’s current board oversees 370 funds, which is considered to be on the high end, Morningstar rated Fidelity’s mutual fund board C. Morningstar analysts said they were “not convinced that this board diligently oversees each fund individually.”