Mutual Fund Directors Governance Survey: Boards focus on adapting to rising expectations

Eighty percent of mutual fund directors expect changes to the regulatory environment will be a threat to their investment manager in the next three years, according to the results of PwC’s 2023 “Rising Expectations of the Mutual Fund Board" survey – which included responses from nearly 120 independent directors.

The survey is designed to explore the evolving landscape of mutual fund governance, with a particular focus on the rising expectations placed on boards. The survey also identified insights from the boardroom on industry opportunities and challenges, board composition and diversity, as well as boards’ strategy, risk and ESG practices.

Several key themes developed from our analysis of the survey results, including:

  • Investors are demanding more transparency, accountability, and performance from mutual fund boards.
  • There is increasing pressure from regulators to enhance governance practices and ensure investor protection.
  • The oversight role of boards is coming into sharper focus, highlighting the need for robust risk management and strategic decision-making.

As the industry evolves with seismic changes over the next several years, fund managers will need to adapt their investment products, distribution channels and technology to meet the needs of this new generation of investors. This will result in rising expectations being placed on the boards.

Boards also must adapt to the rising expectations of regulators, who have launched fast-paced policy initiatives, focused on increasing data requirements to monitor systemic risk (including more frequent and timely reporting), and heightened enforcement of current regulations to drive behavior.

Key findings include:

64% of directors find the pace at which regulation is emerging to be challenging.
65% of directors believe new technologies represent a significant opportunity, yet nearly half believe the board is not spending enough time on technology/digital transformation.
70% of directors believe increasing regulation is expected to have the most significant impact on the mutual fund industry
Nearly 65% of directors believe new technologies is a significant opportunity, yet nearly half believe the board is not spending enough time on technology / digital transformation

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Peter Finnerty

Registered Funds Leader, PwC US

David Trerice

Asset and Wealth Management Governance Leader, PwC US

Declan Byrne

Mutual Fund Research and Analytics Leader, PwC US

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