Webinar Archive: Mutual Fund Director Risk Oversight Responsibilities and Trends

This webinar focused on the two primary types of risks in the investment management business – intended risks, which are necessary to achieve the fund’s investment objectives and create shareholder value and uncompensated or undesirable risks that are best avoided, if possible. As part of their overall oversight responsibilities to the funds, mutual fund directors should understand these different types of risk and the policies and procedures used by the adviser to appropriately manage these risks. Having an open and transparent dialogue between the mutual fund board and the adviser and service providers about the types of risks their organizations face, their appetite for those risks, and the programs and processes in place for managing those risks can facilitate this understanding. 

Our discussion focuses on the mutual fund director’s role and duties in risk oversight for the funds for which they are responsible, set forth common risk management program elements to help directors to understand how investment advisers and service providers manage risks related to the funds they oversee and discuss specific areas of existing and emerging risks that impact the investment management industry.

The Mutual Fund Directors Forum recognizes that a “one-size-fits-all” approach to risk oversight and risk programs is not possible given the diversity among funds and fund families as well as the evolving nature of risk in a dynamic environment and industry. Consequently, our discussion will discuss factors relevant to various fund complexes, such as the characteristics of the funds they oversee, the fund’s investment objectives and asset size, as well as complex specific factors including size, disparity of fund types and number of funds. We will seek to assist mutual fund directors in understanding the governance and management structures in place along with the nature of third-party service arrangements and the existing programs in place to manage risk of such services.

This webinar originally aired on Tuesday, October 27, 2020.