Regarding the SEC requirement that at least 75% of a fund's board including its chairman be independent, I strongly support that rule. I would go further and state that in my opinion the board should be 100% independent since they represent the shareholders who own the funds not the managers who are mere employees with no ownership in the fund. Board members should be prohibited from receiving any compensation or other so called "gifts" and "perks" from the funds they manage. The board members should only receive compensation in the form of a "reasonable" stock option. The stock should have to be held 100% until 5 years after a board member has resigned from the board of the fund he is a director of. No board member should have any outside relationship with the fund management members and company. That would exclude relatives, stockholders in the fund management company, officers of firms whose shares the fund owns, and former employees of the fund or fund management company.
I also believe there need to be stronger penalties including mandatory jail time and full restitution for fund managers and employees engaging in questionable and illegal practices detrimental to the best interests of the fund's shareholders. Anyone convicted of such offenses should be barred for life from the securities industry. No one should be allowed to manage a fund who does not retain a substantial portion of his net worth in the fund he manages.
In electing members to the board the election should count only shares actively voted by the shareholder, not by the street holding company. No one can be elected to a board unless he receives 51% of the shares voted. All elections to the board should include more that one candidate to choose from and shareholders can submit their own slate of candidates to oppose the existing board.