On Tuesday evening, the Association of British and Irish Accountants in Luxembourg (ABIAL) and the Ireland Luxembourg Chamber of Commerce (ILCC) invited guest speaker Dr. Margaret Cullen to discuss funds governance at the Luxembourg Chamber of Commerce in Kirchberg.
On this occasion, Dr. Margaret Cullen, CEO and Academic Director of the Certified Investment Fund Director Institute (CIFDI), addressed the topic "Can a Director Serve Two Masters? Exploring the unique characteristics of the governance of funds versus companies".
Dr. Margaret Cullen is a specialist in the areas of corporate and investment fund governance. She holds a BA in Economics from University College Dublin, an MSc in Investment and Treasury from Dublin City University and a PhD in corporate governance from University College Dublin. Her doctoral research explored the role and effectiveness of boards of directors in investment fund governance. Prior to completing her doctoral research, Dr. Cullen worked for twelve years in the investment fund industry.
During her presentation, Dr. Margaret Cullen compared the funds industry of Dublin and Luxembourg and emphasised the importance not only of regulatory compliance in the funds industry, but especially investor protection. She argued that investment funds and management company (ManCo) boards risk getting so "obsessed with the race for regulatory compliance" that they may ignore other important factors and potential risks. Dr. Cullen particularly touched on the need for good governance at the core of an investment fund or ManCo board that can "twin regulatory compliance and investor protection".
Dr. Margaret Cullen then presented the CIFDI's Investment Fund Governance (IFG) toolkit, which is aimed at helping such companies develop good governance. The toolkit features seven key components: (defining) governance objectives; investment fund profiling; risk management; outsourcing; investment fund policies; documentation; gap analysis vs local regulatory requirements.
In her concluding remarks, Dr. Margaret Cullen cited what she believed to be the three top characteristics of a good investment manager: not letting anyone insult one's intelligence, bringing independence to the board and never compromising one's integrity. She recalled that regulatory compliance is certainly important, but that there is also the need to protect investors as well as jurisdictions such as Ireland and Luxembourg.