Are mutual fund directors required to invest in the funds they oversee?
No, directors are not required by law to own shares in funds they oversee. Many boards, however, have adopted policies requiring or encouraging their directors to do so. The SEC requires disclosure of the dollar value (in ranges) of a director’s investment in any funds that he or she oversees. While fund ownership may help to align directors’ interests with those of fund shareholders and enable them to learn more about the quality of the services from a shareholder’s perspective, there is no evidence that requiring director ownership leads to improved investment returns for the funds.
