Why Have Mutual Fund Independent Directors Failed as “Shareholder Watchdogs”?

Abstract

This article discusses the four basic reasons why mutual fund independent directors have failed in their roles as “shareholder watchdogs” under the Investment Company Act of 1940.There is a current case before the Supreme Court that could find that an adviser charged its mutual funds’ shareholders excessive advisory fees. The author believes that without relief from the Supreme Court,mutual fund shareholders must continue to depend on inadequately empowered, motivated, and informed independent directors to do what they can as shareholder watchdogs.