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The NED publishes its first comparative review of the quality of alternative fund boards across EU and offshore fund jurisdictions in this issue. It shows that there are some significant differences in fund governance standards by domicile.

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Adoption of ESG standards by institutional investors is now filtering down to fund boards. Managers have to meet investors’ ESG requirements. This has huge consequences for director selection.

The speed at which ESG has taken off, and the affect that it is having across the global investment industry, is extraordinary. In many respects it is surprising that it has taken this long for ESG to have become any sort of an influence in fund board selection.

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We promised an update for subscribers that have given us their feedback on proposals that we outlined to introduce director ratings in last month’s issue. This topic is also being debated at The NED’s events this autumn.

To date opinion has been divided, although slightly more than half have been positive. Investors and individuals wishing to become independent directors are on one side of that divide. On the other side of it are what might be termed the fund director establishment.
 

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The NED hosted an event in Guernsey, the leading international jurisdiction for fund governance (see cover story) in early October. It did this in part to make its case for greater transparency in fund governance. Speaking on the panel were: Rebecca Booth, Client Director, Carey; Max Hilton, Managing Director, Clarus Risk; Christopher Jehan, Managing Director, Midshore Consulting and head of the Guernsey Investment Funds Association and John Whittle, an Independent Director.

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The UK’s 200 authorised fund managers (AFMs) must have their independent directors appointed by the end of September. All the AFMs contacted by The NED said that they have made their appointments but some also added that these appointments have not yet been approved by the FCA. This confirms what many people have known for sometime: many AFMs left their independent director selections very late.

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