UK fund board overhaul rules must be stricter to achieve 'substantial change'


Industry commentators (including WOB's Fiona Hathorn) have warned the Financial Conduct Authority's (FCA) requirements for all UK open-ended funds to have at least two or 25% of independent non-executive directors (iNEDs) on their boards will not "transform the industry" and does not go far enough.
Fiona Hathorn, managing director of Women on Boards UK, believes the fight for diversity will be particularly difficult as the FCA will not play any part in the recruitment process.

She said: "Yes, the FCA is encouraging houses to look outside the pool of usual candidates in their search for independent directors, requesting that boards consider diversity in all forms, but if history repeats itself there is no evidence this will happen.

"What really matters is the size of the headhunter's fishing pond and size of their net. Most are fishing in the same C-suite pond, finding the obvious suspects that are the easy, low-risk sell to boards."

Hathorn said she is disappointed the FCA is not doing more to insist iNED vacancies are transparently advertised.

"The time has come to recognise that the current system values who you know more highly than true merit, and that only transparency will enable us to resolve that inequity," she added. 

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