Although many in the mutual fund industry have forcably argued against the independent director chairman rule on the basis of its cost, the Mutual Fund Directors Forum has found,  through a survey to 45 of its 60 members, that the new requirement has driven up board compensation costs minimally.

Those survey participants that currently adhere to these governance enhancements report that their compliance costs have been negligible, with 13 reporting additional compliance costs of $50,000 or less. Some have incurred expenses of up to $150,000, but these have primarily been due to sending out proxies seeking shareholder approval to increase the independent composition of their boards to 75%. And, as the forum notes, these are one-time costs.

Only two respondents said compensating board members has increased between $150,000 and $500,000, directly as a result of the SEC's new independent chairman rule.

The majority of the survey's participants are currently already adhering to these governance rules. Of the 45 fund firms that took part in the survey, conducted in August, 80% have independent chairs and 31% have moved to an independent chair with no additional costs as an effect.

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