Fund Boards Council

This event provided a forum to discuss some of the key Responsible Investment questions facing Authorised Fund Managers (AFM), including the current responsibilities of both AFM board members and senior executives. Responsible investment is defined by the UNPRI as the strategy and practice of incorporating environmental, social and governance (ESG) factors in investment decisions and active ownership.

The questions included:

• What role does the AFM play in deciding if and how RI is applied within the funds for which it is responsible?
• Do AFMs specifically monitor RI considerations today and if so, how do they do so?
• How can and should investment governance arrangements be evolved to incorporate RI / ESG into the purpose of the committees and what is monitored and how it is managed?
• Is applying RI just good investment management in terms of managing long term risks and seeking to optimise long term returns? Are trade-offs of short term increased risk or lower returns inevitable?
• When it comes to target market considerations, is it sensible for us to talk about customers who ‘choose’ RI investments, which suggests there are other customers who do not want RI investments?
• Where are the limits to the role of the AFM vs. the investment manager (especially as distributor) and are these roles and responsibilities different in a vertically integrated firm?

In this session, we spoke to leading fund governance practitioners – both board directors themselves and those involved in board evaluation – to examine the key attributes and characteristics of an effective fund board. In this highly practical session, the panel discussed the types of benchmarks and criteria that firms are using to determine the effectiveness of its fund board, explore the key areas that boards need to address in order to be considered ‘high performing’ and examine the warning signs that chairs and board directors should be looking out for.  Attendees at this first FBC Board Effectiveness meeting will come away with practical considerations and steps to take back to their own boards.

This session forms part of Fund Boards Council’s brand-new series of events and content focused on the practical steps fund board directors can take to ensure both they personally and the board collectively are operating as effectively as possible. The FBC Board Effectiveness series will explore effective structure and composition of these boards, how to optimise the processes that support the running of the board and the behaviours of effective boards and the executive teams that surround them.

Ensuring the voice of the customer is heard effectively in the boardroom is not an easy task, particularly in a heavily-intermediated industry such as asset management. And yet, in the course of FBC’s Board Advisory work, we’ve been pleased to uncover many positive examples of how fund boards are endeavouring to put the customer at the heart of decision-making.

In this Digital Meeting, we looked at examples of good practice in this area and examined how the effective use of research, data and customer-centric processes are influencing the work of fund boards.