On mutual fund directors and multitasking…
We don’t spend a lot of time looking at mutual fund filings here at footnoted, mostly because there’s really only so many hours in the day. But yesterday was a big day for mutual fund proxies and one of our regular searches — we have about 150 of them running now — turned up an interesting tidbit that raises some serious questions about just how many boards any one individual can sit on.
The answer, at least when it comes to Lee A. Ault, 73, the chairman of the CIA’s venture capital arm, In-Q-Tel, is 30. Actually, it’s more than 30. That was just yesterday’s filings. Ault’s name actually turns up in a whopping 371 filings — almost all of them mutual funds — just in the past year as an independent director.
We don’t mean to take anything away from Ault, who was the former Chairman of Telecredit. Nor do we mean to imply that serving on a mutual fund board is as hands-on as serving on a public company board. Indeed, Ault also serves on the boards of Office Depot (ODX) and Anworth Mortgage Asset (ANH). Still, even in an age of massive multitasking where some people follow thousands of people on Twitter, it’s hard to imagine any one individual being talented enough to adequately keep track of the doings at 350-plus funds and two public companies.
Ault is hardly the only one serving on dozens (or more) mutual fund boards here. One time last year, we did a similar search for Michelle Obama and turned up a bunch of results. But it seems as if someone at the SEC, which announced a series of new rules on proxy disclosure, needs to pay a bit more attention to the number of boards that some of these folks sit on. Especially if investors are really supposed to believe that these board members are independent.
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Posted in Tags: directors, mutual funds, soapbox |
 5 Comments » |
July 14th, 2009 at 11:00 am
The average number of board corporate meetings is something like 8-10/year. If you attend only 75%, that’s maybe 6/yr/board. (not including committee meetings)
Some years back, when I was paying more attention, Vernon Jordan sat on 12 boards. With a 75% attendance rate, he had 6 meetings a month to attend – all over the US. He didnt come close to that 75% mark, but you could argue he was worth his seat if he picked up the phone once or twice a year on behalf of those companies…
Oversight aside, maybe another valid measure of board member worth is is how much juice you have. Michelle Obama can sit on the board of any company I own stock in.
July 14th, 2009 at 3:22 pm
Well its comforting to know the conurbation of financial fat cats are all twiddling thumbs making ‘decisions’ together. [sarcasm]
July 14th, 2009 at 5:48 pm
@DCiFlCare: Just to be clear, Michelle Obama no longer sits on any of these boards. She gave them up awhile ago. Was just trying to prove a point that you can pick any mildly well-known name — this was long before she was First Lady — and it wouldn’t be too hard to have them turn up as a so-called independent director on a mutual fund. And while I tried to make a clear difference between public company boards and mutual fund boards, since the former clearly involves a lot more work, it still calls into question how any one individual can sit on so many boards and provide anything approaching independence.
July 15th, 2009 at 9:15 am
There is the teensy possibility that the multi-taskers are more expert than anybody else in the world about issues to come before funds’ boards, so that even minutes of their asking, “what about X?” is of tremendous value.
After all, the whole idea of a Board is to bring in a well-reasoned range of viewpoints on what protects investors’ interests. Nothing wrong with a little cross-pollination, as long as no specifics cross company lines, and investors’ interests could be inferred to be VERY generic.
July 19th, 2009 at 11:26 am
I suspect the reason that he is on so many boards is that he is usually going to vote management’s way. Not looking out for the investors is the only reason one person could be so popular.