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20 Idc Annual.Pdf ANNUAL 1401 H Street, NW, Suite 1200 Washington, DC 20005 202-326-8300 www.idc.org Copyright © 2021 by the Investm ent Company Institute REVIEW The Independent Directors Council (IDC) supports fund independent directors in fulfilling their responsibilities to promote and protect the interests of fund shareholders. Through its mission of advancing the education, engagement, and policy positions of independent directors—and promoting public understanding of their role—IDC advocates for excellence in fund governance for the benefit of funds and their shareholders. IDC also provides practical information and guidance to fund boards about important issues, helping them adapt to industry and regulatory developments. IDC is part of the Investment Company Institute (ICI), the leading association representing regulated funds globally, including mutual funds, exchange-traded funds, closed-end funds, and unit investment trusts in the United States and similar funds offered to investors in jurisdictions worldwide. IN THE UNITED STATES, 1,585 INDEPENDENT DIRECTORS...* OVERSEE MORE THAN 10,837 REGISTERED FUNDS...** WITH NEARLY $27.7 TRILLION IN ASSETS...** AND REPRESENT THE INTERESTS OF MORE THAN 100 MILLION SHAREHOLDERS * Source: Investment Company Institute member funds as of December 2020. ** Data exclude unit investment trusts. Data for mutual funds and exchange-traded funds are as of November 2020. Data for closed-end funds are as of September 2020. CONTENTS PAGE 2 PAGE 12 Letter from the Advocacy—Advancing the Governing Council Chair Director Perspective PAGE 5 PAGE 14 Letter from the Public Understanding— Managing Director Communicating Directors’ Vital Role PAGE 8 PAGE 15 Education—Developing Expertise Governing Council Members and Excellence PAGE 16 PAGE 10 IDC Staff Engagement—Fostering a Director Community PAGE 17 2020 Activities LETTER FROM THE GOVERNING COUNCIL CHAIR That deep commitment in our community to fund shareholders is what sustains my passion for our industry. For more than eight decades, the success of independent directors stemmed from our ability to continue serving fund shareholders no matter the challenges. As the pandemic crisis demonstrates, these challenges continue, often in unexpected ways. I believe the only way to navigate constant change is to stay true to our fundamental duty to fund shareholders. The Independent Directors Council has supported the independent director community in this goal Extreme volatility in the financial since its founding 16 years ago with efforts that were especially necessary and meaningful this markets, a global shift to remote last year. I am grateful that the IDC team, under work, social tensions, and a pivotal the leadership of Tom Kim, worked so tirelessly to US presidential election. The year ensure that we could navigate the crisis effectively. 2020 is unforgettable in so many During this time, IDC remained steadfast in its fourfold mission to support our community— ways, and it put us all to the test. educating independent directors, fostering community and engagement among us, sharing The pandemic was like no other challenge we have our perspective in policy debates, and promoting faced in our careers and lifetimes, singular in its public understanding of our critical role in the fund intensity and scope. I am pleased that, through this industry. Tom and his team quickly adapted their gauntlet, IDC and fund independent directors not efforts to the pandemic environment, whether only persevered but also thrived. We demonstrated advocating for regulatory relief to enable fund that in times of adversity, when director oversight directors to meet remotely or offering virtual matters the most, we would continue to serve opportunities for education and engagement. IDC is the fund industry’s 100 million shareholders with also embarking on the important work of promoting excellence and dedication. With the COVID-19 diversity and inclusion on fund boards, a high crisis, fund independent directors and IDC priority as we progress together as an industry. experienced a stress test in our community and came through with flying colors. With that full plate, IDC continued apace with a renewal of its overall mission, which we at the I have spent nearly my entire career in the fund Governing Council wholeheartedly approved. The business, working in almost every area—in financial timing couldn’t be better, for we have seen proof and regulatory administration; operations and this year of excellence in fund governance at compliance; and distribution, marketing, and risk work in the face of unexpected challenges in an management. For the last nine years, I have focused ever-shifting world. on fund governance. And I am proud of how well fund directors and our industry continued to serve their shareholders in 2020, the 80th anniversary of the Investment Company Act. KATHLEEN BARR PAGE 2 2020 IDC ANNUAL REVIEW “ For more than eight decades, the success of independent directors stemmed from our ability to continue serving fund shareholders no matter the challenges. ” KATHLEEN BARR GOVERNING COUNCIL CHAIR 2020 IDC ANNUAL REVIEW PAGE 3 “ Our recent experience demonstrates that, in an era of unpredictable and rapid change, IDC’s commitment to advancing excellence in fund governance is more important than ever. ” THOMAS KIM IDC MANAGING DIRECTOR PAGE 4 2020 IDC ANNUAL REVIEW LETTER FROM THE MANAGING DIRECTOR IDC also converted in-person activities, such as our annual conference and chapter meetings, into virtual events to maintain the peer-to-peer learning that is so vital to the IDC member experience. Indeed, our virtual Fund Directors Conference in October 2020 saw record attendance. Our work to enhance engagement among independent directors has taken on further significance, as we elevate our efforts to strengthen diversity and inclusion within the independent director community. On the policy front, IDC was proactive in early engagement with regulators to ensure that fund Nearly overnight, COVID-19 directors could continue to serve shareholders without interruption. We took a leading role in drastically changed how we live successfully advocating to the Securities and and work, raising new uncertainties Exchange Commission for emergency regulatory relief from in-person fund board meeting for all, including the independent requirements, and we worked with the SEC staff on director community. many ongoing regulatory actions of importance to fund governance. But this unparalleled global crisis has been highly instructive, showing independent directors and At the same time, IDC continued to build upon IDC at their very best. Fund independent directors our four-part mission to advance education, continued to demonstrate their strength, resilience, engagement, advocacy, and public understanding. and steadfast commitment to fund shareholders, To underscore our commitment to promote carrying out their oversight duties in difficult excellence in fund governance, IDC embarked on circumstances without missing a beat. a timely effort to renew our mission statement in 2020, which was ratified by our Governing Council, From the outset of the crisis, IDC pivoted quickly and we launched a new brand and communications to address the challenges posed by the pandemic, initiative in the fall. providing resources to independent directors to enable them to continue serving fund shareholders. IDC is seeking to learn from and respond to all the challenges presented by the events of IDC took action to provide the director community this momentous year. Our recent experience with programming on the unfolding crisis and demonstrates that, in an era of unpredictable and its impact on the markets. At a time of many rapid change, IDC’s commitment to advancing unknowns, educational events with respected excellence in fund governance is more important economists and other experts helped independent than ever. Building on this foundation, we look directors make sense of highly volatile markets. forward to our collective work in service to shareholders in the coming year. THOMAS KIM 2020 IDC ANNUAL REVIEW PAGE 5 IDC MISSION STATEMENT The Independent Directors Council (IDC) represents independent directors and trustees who serve on the boards of mutual funds, closed-end funds, exchange-traded funds and other registered investment companies. IDC’s activities and advocacy promote excellence in fund governance for the benefit of shareholders. IDC’s core mission is to: » Deliver education and programming to enhance the effectiveness of independent directors in service to fund shareholders; » Foster community and engagement among independent directors, including through peer-to-peer exchange and learning; » Advocate for public policies from the independent director perspective in support of fund shareholders; and » Promote public understanding of the vital role and responsibilities of independent directors and the operations of fund boards. IDC WELCOMES ICI PRESIDENT AND CEO ERIC J. PAN IDC welcomes Eric J. Pan as the new president and CEO of the Investment Company Institute. A veteran capital markets regulator with deep experience in international financial regulation and a recognized scholar and expert on financial regulation, he took office on November 9, 2020, as the 10th chief executive of ICI and its predecessor organizations. The ICI Board of Governors unanimously elected Eric on October 8, 2020, on the recommendation of a search committee composed of seven members of the Board’s Executive Committee and led by ICI Chair
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