Board of Director Configuration in Mutual Fund Sponsors: Early Evidence of Board-Level Performance
Posted: 15 Jun 2009
Date Written: 2007
We examine the relationship between how mutual fund sponsors configure their board(s) of directors and the performance of the funds under a particular board’s purview. Fund sponsors utilize either one board to oversee all the funds within a fund family or multiple boards that oversee one fund or a subset of the family’s funds. Our results suggest that fund families — that is, sponsors — that use multiple boards have significantly higher objective-adjusted board-level weighted excess returns. But, there are no significant differences in the objective-adjusted board-level weighted excess expenses. These results are consistent with the argument that multiple boards provide superior monitoring.
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