Board of Director Configurations in Mutual Fund Sponsors: Early Evidence of Board-Level Performance

Abstract

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.

Citation

Besley, S., Fraser, S.P. and Pantzalis, C. (2007), "Board of Director Configurations in Mutual Fund Sponsors: Early Evidence of Board-Level Performance", Hirschey, M., John, K. and Makhija, A.K. (Ed.) Issues in Corporate Governance and Finance (Advances in Financial Economics, Vol. 12), Emerald Group Publishing Limited, Leeds, pp. 203-236. https://doi.org/10.1016/S1569-3732(07)12009-0