U.S. Chamber Criticizes SEC Mutual Fund Ruling

WASHINGTON, D.C. – The United States Chamber of Commerce found fault with today's SEC ruling requiring mutual fund company boards of directors must be led by an independent chairman, unconnected with the firm and separate from the CEO.

"Placing restrictions on mutual fund companies' board decisions and management is harmful to the interests of fund shareholders," said David Hirschmann, Chamber senior vice president. "Boards of directors are in the best position to judge the fitness and merit of candidates."

The Chamber, in its earlier comments opposing the proposed rule, said a one-size-fits-all regulatory approach could have negative, unintended consequences: "A rigid, rules-based approach to corporate governance does not strengthen the board and, on the contrary, may calcify behavior and encourage directors to avoid responsibility by relying on a checklist of duties instead of using their own best judgment in their actions as directors."

To be effective, a chairman should be intimately familiar with the operations of a company. A management representative is often in the best position to carry out the responsibilities of a chairman, according to the Chamber. Forcing a mutual fund to utilize a chairman not familiar with the operations of a company could severely impact its progress and success.

"There is no independent study, research or analysis that supports this regulatory change," said Hirschmann. "Policymakers should not impose rules that are based on a regulator's opinion."

The U.S. Chamber of Commerce is the world's largest business federation representing more than three million businesses and organizations of every size, sector and region.

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