The growing number of independent directors on mutual fund boards has renewed the debate over whether industry best practices should become mandatory, but few believe any regulatory action will be taken soon.

In 2006, the vast majority (88%) of fund companies reported that 75% or more of their board seats were held by independent directors, up significantly from 2004, when it was 71%, according to a survey of boards representing 7,764 funds by the Investment Company Institute and the Independent Directors Council. Also in 2006, 78% of the companies reported having an independent director in board leadership or as chairman, although only 56% had an independent chairman. In 2004, 43% of fund companies had an independent chairman and 18% a lead independent director.

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