Management Practice Inc. (MPI), a professional consulting firm specializing in
mutual fund governance and the publisher of 15 consecutive years of independent third party research into mutual fund director compensation, would like to highlight several facts about the proposed Independent Chairman rule.

Cost of Independent Chairs

On average the annual additional cost of compensating an Independent Chair is approximately $30,000. There are about 500 fund complexes which would be required toappoint an Independent Chair. Therefore the incremental cost would be approximately $15 million, a miniscule percentage of both the $70 billion in total mutual fund fees and the $9.5 trillion in mutual fund assets. While the Independent Chair may choose to increase the use of consultants, staff, and analytical resources, the incremental cost should not be attributed to the proposed rule, but rather to other new or pre-existing regulations or legislation, such as Sarbanes-Oxley.

Guidance to trustees about how to comply with the SEC's new requirement that Mutual Fund directors annually evaluate the board's performance. This SEC requirement follows an earlier ICI recommended “best practice”.