Alternative Boards Need To Clarify The Scope Of Their Duties, According To New White Paper From RFG
NEW YORK, Dec. 12, 2012 /PRNewswire/ -- A careful assessment of a hedge fund board's role can help ensure that alternative fund investors receive governance benefits that justify board expenses, according to a white paper by The Regulatory Fundamentals Group (RFG).
The paper, "The Unasked Question: Fund Directors – Worth It or Not? Why Alternative Funds Are Not Receiving the Value They Should from Their Directors," highlights key questions not being asked about the fund governance process. A chief conclusion is that investors and managers who fail to address these issues may not derive sufficient value from their boards.
RFG's paper comes at a time when institutional investors, including pension plans and endowments, are increasing their allocations to alternatives and beginning to scrutinize fund governance more closely. "Operational risk can sink a fund, but who has responsibility for mitigating operational risk – the manager or the board?" Deborah Prutzman, CEO of RFG, asks. "If this is not clear, investors should justifiably ask, 'Who is steering the ship?'"
Prutzman notes that many jurisdictions, such as the Cayman Islands, consider fund boards to be a "best practice," which may include having a complement of independent directors. "Regardless of whether directors are specifically required, investors deserve a clear articulation of what a board is paid to do and how the board intends to achieve its objectives," says Prutzman. "Transparency with respect to fund portfolios is now the norm. Transparency in governance should be equally valued."
A complimentary copy of the white paper can be downloaded here.
About RFG
RFG pioneers cost-effective business solutions for funds, advisors and investors in a heavily regulated world. Through a cloud-based risk management platform, RFG identifies key opportunities and vulnerabilities from business and regulatory perspectives and provides counsel, insights and creative solutions. RFG Pathfinder® uses a business-oriented approach to keep clients up-to-date on regulatory changes while offering an enterprise risk management structure that meets the expectations of investors, regulators, and senior management. RFG Watch® is an interactive regulatory and risk assessment update service that allows clients to determine whether a market change applies to them and, if so, how to respond. For more information, call RFG at (212) 537-4058 or visit www.RegFG.com.
Media Contact:
Ashley Eberhardt
RFG
(212) 537-4058 x3
[email protected]
SOURCE Regulatory Fundamentals Group
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