The reforms announced by the Commission today reaffirm the important role that independent directors play in protecting fund investors. They are intended to strengthen independent directors' hand in dealing with fund management, reinforce their independence, and provide investors with greater information to assess directors' independence. Although no regulation can ensure director independence and effectiveness, the initiatives announced by the Commission today represent a significant step in providing fund directors with the tools, the access, and the power to faithfully fulfill their legal duty and moral mandate as the shareholders' representative. The initiatives announced by the Commission include the following. Fund Governance Changes.
Independent directors select and nominate other independent directors.
Any legal counsel for the fund's independent directors be an independent legal counsel. Fund Disclosure Changes. Information about the board's role in governing the fund. Encourage the development of independent audit committees by exempting funds that have these committees from seeking shareholder approval of the fund's auditor.