Irish directors are in danger of becoming ‘micro-managers’

The CBI is accused of wanting to turn fund directors into micro-managers by some Irish based iNEDs. It expects them to have more hands-on oversight of managers’ investment strategies in future. And directors will also be required to determine whether the fund strategy is right for its investors.

The push for more portfolio management oversight, by the board, follows on from the CBI’s thematic review into closet indexing. 62 Irish domiciled funds are now under further formal investigation by the CBI as a result of this review.

Requiring boards to determine whether the fund’s portfolio management strategy is the right one for its investors is controversial; it is also likely to have a substantial long-term impact on Irish fund governance practices. If other jurisdictions were to follow Ireland’s lead it could have a transformative impact on fund governance. The CBI says boards must consider whether the fund has delivered on its stated objectives, and ‘remains a viable and suitable investment for investors’.

To read more on this story see the August issue of The NED.