Fund board independence issue still percolating

The debate over fund board independence isn't going away, even though it seems doubtful that the Securities and Exchange Commission will go to the mat regarding a proposal to require independent mutual fund chairman and a 75 percent independent board. Morningstar has sent a letter to the agency in support of such a rule. There are some powerful opponents of such a rule, including the Investment Company Institute. Fidelity in particular has been a vocal opponent. Morningstar raises an interesting point when it suggests that research shows a link between lower fees (thus better performance) and board independence. So while most people doubt that the SEC will resurrect the independence proposals, it would certainly be momentous if it did so. It would certainly clear up some confusion about where Chris Cox is trending as chairman of the agency.

For more:
- here's the letter