The Advisory Group released its recommendations on June 24. Listed below are the 15 practices that the Advisory Group on Best Practices for Fund Directors is recommending to all investment company boards of directors. At least two-thirds of the directors of all investment companies be independent directors. Former officers or directors of a fund's investment adviser, principal underwriter, or certain of their affiliates not serve as independent directors of the fund. Independent directors be selected and nominated by the incumbent independent directors.
Independent directors establish the appropriate compensation for serving on fund boards.
Fund directors invest in funds on whose boards they serve. Independent directors complete on an annual basis a questionnaire on business, financial, and family relationships, if any, with the adviser, principal underwriter, other service providers and their affiliates. Independent directors meet separately from management in connection with their consideration of the fund's advisory and underwriting contracts and otherwise as they deem appropriate. Investment company boards of directors generally be organized either as a unitary board for all the funds in a complex or as cluster boards for groups of funds within a complex, rather than as separate boards for each individual fund. Fund boards adopt policies on retirement of directors.