[农林牧渔]An Empirical Examination of Mutual Fund Boards.pdf

An Empirical Examination of Mutual Fund Boards * FELIX MESCHKE First Version: December 15, 2004 This Version: March 15, 2007 *Department of Finance, Carlson School of Management, University of Minnesota, 321 19th Ave. South, Minneapolis, MN 55455. Email: meschke@. I thank my dissertation co-chairs, Jeff Coles and Spencer Martin, and my committee members Stuart Gillan and Mike Lemmon for their unwavering support. I also thank Raj Aggarwal, George Cashman, Susan Christoffersen, Rich Evans, Ying Huang, Patrick Kelly, Laura Lindsey, and seminar participants at Arizona State University, Georgia Institute of Technology, HEC Montr´eal, McGill University, University of Cincinnati, University of Miami, University of Minnesota, Uni- versity of Notre Dame, University of Oklahoma, University of Toronto, and especially at the Securities and Exchange Commission (SEC) for their helpful comments and suggestions. An Empirical Examination of Mutual Fund Boards ABSTRACT This paper examines how board independence and director incentives in the mutual fund industry affect fund expenses, performance, and compliance. It is based on a novel panel dataset of mutual fund governance characteristics from 1995 through 2004 which covers about 60% of assets listed in the CRSP mutual fund database. The results show that funds overseen by an independent chair charge fees that are 12 basis points lower, while the relation between fund fees and the fraction of independent directors varies through time. Yet both these measures of board independence af- fect fund performance negatively. With respect to compliance, this paper