This report from IFI Global, and supported by Jersey Finance, explores how approaches to fund governance are shifting amongst international investors as we move into a post-pandemic ‘ESG era’. The accompanying research was carried out between April and June 2021 and is based on the views of investors and advisors in North America, Europe, Asia Pacific and the Middle East.
The research found that the rise of ESG investing, demands for specific experience and greater expectations on transparency are all shaping the fund governance landscape – but there is still a way to go for managers and boards to align with the governance objectives of investors. Most investors, according to the survey, believe that ESG considerations will have an impact on fund governance and that there is an increasing demand for board directors to have specific portfolio management or industry experience in the underlying strategy, and for them to be independent and have term limits imposed on them.
All those surveyed felt that the purpose of fund governance is protect the interests of investors, rather than to serve the interests of the fund. Meanwhile, gender diversity on the board did not evoke particularly strong feelings, though there was a sense that ESG investing might impact this.
Simon Osborn, CEO of IFI Global, said “This is the first research study we have conducted with investors on fund governance in five years. Attitudes and levels of sophistication are changing, and the findings of this report should act as a benchmark in an area that continues to evolve.”
You can view and download the new research below.