The recommendations are focused on practices that enhance the structure and operations of fund boards. The Advisory Group concluded that the adoption of practices that enhance the overall independence and effectiveness of fund boards will help assure that individual issues are addressed and resolved in the best interests of America's 77 million mutual fund investors. Recommendations Listed below are the practices that the Advisory Group is recommending to investment company boards of 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.