Time for term limits

Term limits for fund board directors seems to be welcomed by just about everyone with an opinion on fund governance. It was one of the clearest findings from The NED’s research study with investors this spring.  Will regulators introduce term limits for directors of funds in their jurisdictions?

First the case for term limits. This topic has been debated for years by those that specialise in corporate governance, across many countries and indeed in many other industries too.

Those in favour of term limits often talk about stagnant skillsets on boards and insufficient diversity, which can lead to group-think, if the same people are sat around the table year after year. They frequently add that directors serving on boards for long periods of time can lose their independence and objectivity.

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