The ICI says that because most boards have eight members, the requirement that 75% of the board be independent means that the resignation of a single independent director would put the board in violation of the rule. The trade group also does not believe boards should be forced to elect an independent chairman and that this should be left up to its own discretion.
The ICI also argued that the cost of hiring an independent chairman is prohibitively high for smaller fund complexes, since they often are paid substantially more than management-related directors, and again stressed that there is no proof that having an independent chairman produces benefits for investors.
A federal appellate court has twice upheld the U.S. Chamber of Commerce's opposition to the rule, most recently in April, when the court asked the SEC to seek public comment on the rule. The deadline for final comments is Monday.