Action Requested- Register to Participate in ICI/IDC Directors Practice Study

[35995]January 24, 2025TO:ICI Members
Investment Company DirectorsSUBJECTS:Fund GovernanceRE:Action Requested- Register to Participate in ICI/IDC Directors Practice Study

The Investment Company Institute and the Independent Directors Council invite your fund complex to participate in the ICI/IDC Directors Practices Study. The Directors Practices Study, conducted since 1996, collects and reports data on fund board practices and independent director compensation.

The annual Directors Practices Study will cover the year ended December 31, 2024. If your firm is interested in participating, please register at https://directors.ici.org/registration.

Study Objectives

The primary objectives of the Study are: (1) to provide participants with data necessary to make well-informed judgments about fund board practices and independent director compensation; and (2) to develop a resource that will permit ICI and IDC to communicate authoritatively on the industry's and directors' behalf with media, regulators, legislators and others on these subjects.

Individual company responses to this survey will be held in strict confidence; however, aggregated survey data, including trend analyses, may be released to the media or regulators to support ICI and IDC policy initiatives. We anticipate release of aggregated industry-level director practices information, including analyses of changes in director practices over time, to support ICI and IDC programs.

Survey results will be shared with each participating complex. Survey results will present analyses of fund board practices and director compensation, including:

board and committee meeting practices, including meeting frequency, meeting length, and the number and types of committees;
board size and the proportion of the board that are not interested persons;
board chair, lead director, and committee chair practices;
mandatory retirement, board self-assessment, and share ownership practices;
use of independent counsel, consultants and dedicated staff;
demographic information including age, gender, race, professional background, and length of service;
types of benefits and services provided to directors; and
structure, type, and amount of independent director compensation, including retainers, meeting fees, and compensation by role (i.e., board chair, lead director, committee chair, and independent director). To facilitate analysis and comparison, compensation data will be provided based on assets served (e.g., less than $1 billion, $1-$3 billion, $3-$5 billion, etc.) and the number of funds served (e.g., 1-5 funds, 6 -10 funds, etc.).

In addition, we will provide opportunity for participants to request customized analyses of Study data. Study participants may request a report describing compensation and practices for a participant-specified peer group. Further, we have developed a regression analysis that can be used to analyze compensation. These opportunities for customized analyses will be available to Study participants shortly after the release of the survey results.

Participation Fee

As noted above, aggregate industry-level director practices data may be released to support ICI and IDC policy initiatives. Director compensation data, however, will be provided only to fund groups that participate in the Study. Fund groups that do not participate will not have access to compensation data or peer group reporting.

Fund groups that elect to participate in the current Study will be expected to participate in the subsequent study collecting compensation data for the year ended December 31, 2025. In order to ensure a comprehensive database on director practices, fund groups will not be permitted to participate on an every other year basis (i.e., those years in which only a limited amount of director practices data is collected).

Fund groups that elect to participate in the Study will be charged an asset-based fee to cover our out-of-pocket costs for performing the Study. The fee rates described below cover participation in both the current study collecting director practices and compensation data for the year ended December 31, 2024 and the subsequent study that will collect compensation data for the year ended December 31, 2025.

Participation FeeTotal Assets of Open-end, Closed-end/Interval, Variable Insurance, and ETFs in Complex (as of 12/31/24)ICI MemberNon-ICI Member< $1 Billion$ 400$ 800$1 - $3 Billion$ 750$ 1,500$3 - $5 Billion$ 1,150$ 2,300$5 - $10 Billion$ 1,525$ 3,050$10 - $20 Billion$ 1,950$ 3,900$20 - $30 Billion$ 2,425$ 4,850$30 - $50 Billion$ 2,925$ 5,850$50 - $100 Billion$ 3,275$ 6,550$100 - $200 Billion$ 3,650$ 7,300$200 - $350 Billion$ 4,100$ 8,200$350 - $500 Billion$ 4,550$ 9,100$500 - $750 Billion$ 5,100$ 10,200$750 Billion - $1 Trillion$ 5,550$ 11,100$1 - $2 Trillion$ 6,050$ 12,100> $2Trillion$ 6,300$ 12,600

Data Collection

Fund groups that agree to participate in the Study will be required to complete a questionnaire that collects data on board practices and compensation. Participants will enter their questionnaire responses through a web-based application on a secure site. Fund groups will be asked to designate an employee of the management company responsible for completing the Study questionnaire.

Timetable

Fund complexes have until February 21, 2025 to register to participate. We expect to provide the survey questionnaire to participants in early March. Participants will have approximately one month to complete the survey questionnaire. We expect to deliver Study results to participants and begin accepting peer-group report requests in August or early September. Participants are expected to keep the Study results confidential as the results are intended for use by participants only.