Andrea Montresori, ILA Fund Committee Chairman and PwC Luxembourg Partner; Credit: PwC Luxembourg

On Thursday 23 January 2025, PwC Luxembourg, together with the Luxembourg Institute of Governance (ILA), presented the twelfth edition of the Luxembourg Fund Governance Survey at the ILA and PwC Luxembourg co-hosted Annual Fund Day, which took place at PwC Luxembourg’s Crystal Park premises (Cloche d’Or). 
 
Over 150 stakeholders from across the Luxembourg fund industry attended the event. 
 
As in previous years, the 2024 edition of the Luxembourg Fund Governance Survey addresses a number of subjects and issues, such as the board composition, board organisation, remuneration, directors’ lifecycle, roles and responsibilities of the board, conflicts of interest and liabilities, anti-money laundering (AML) and environmental, social and governance (ESG). 
 
The results of the survey underscore a positive trend towards enhanced governance structures, driven by diversity, accountability, and strategic oversight. Trends include a clear movement towards performance-linked remuneration and regular director rotation to foster dynamic leadership, with the integration of ESG considerations and rigorous AML measures reflecting a commitment to sustainable and ethical governance practices. 
 
Andrea Montresori, ILA Fund Committee Chairman and PwC Luxembourg Partner, said: “Amidst the 2024 election super-cycle and significant geopolitical shifts, Luxembourg’s fund industry shows strong governance practices. Despite these challenges, boards continually refine their practices and engage in their education. They align ESG strategies with business goals, fostering sustainability and complying with SFDR and taxonomy criteria. Observing robust governance practices among Luxembourg fund boards is encouraging, significantly contributing to the sector's strength and resilience. This underscores the ongoing relevance of the Luxembourg Fund Governance Survey as a key resource for understanding governance practices, challenges, and opportunities. I extend my sincere appreciation to the survey respondents for their valuable insights, and I invite you to deep dive into its contents and analysis.” 
 
New issues highlighted in this year’s survey include: the preparedness of boards for the Digital Operational Resilience Act (DORA), board consultation on Information and Communication Technology (ICT) Risk Appetite, board involvement on Self-Assessment Questionnaire (SAQ) (replacing the Long Form Report (LFR)), and board engagement of new resources for regulatory compliance.
 
Key highlights of the Luxembourg Fund Governance Survey 2024
 
Board composition
- A significant increase in the appointment of independent directors is noted, up from 39% in 2022 to 41% in this edition.
- Data reveals that 26% of boards now have a female member, reflecting progress in gender diversity. 
 
Board organisation 
- Enhanced board organisation practices are evident, with boards now meeting an average of ten to eleven times per year. 
- The use of circular resolutions remains widespread with 92% of boards reporting their use.  
 
Roles and responsibilities of the board 
- Clear delineation of roles and responsibilities has improved, ensuring better governance and accountability.
- There is an increased focus on strategic oversight and risk management. 
 
Strengthening of conflict-of-interest policies in 2024 
- The 2024 survey reveals positive trends in conflict-of-interest management among UCITS and AIF boards. The percentage of UCITS boards maintaining a conflicts-of interest-register increased from 86% in 2022 to 95% in 2024, and AIFs from 72% to 78%. 
 
Anti-Money Laundering (AML) 
- AML measures are a priority, with 85% of boards implementing stringent AML policies and procedures. 
 
Environmental, Social, and Governance (ESG) 
- ESG considerations are increasingly integrated into board discussions, with 65% of boards having an ESG committee or dedicated ESG roles. 
 
New regulations 
- Boards are proactive in adapting to new regulations, with 90% of respondents expressing confidence in their regulatory compliance frameworks. 
 
As reported by PwC and ILA, the survey provides insightful information which is important in assisting, directing and improving governance processes in Luxembourg's fund business. Between 20 June and 20 October 2024, 115 participants filled out the survey, with respondents falling into five categories: Super ManCo, UCITS ManCo, AIFM, UCITS, and AIF.