Managing Conflicts with Independence
Sabrina Foster outlines the ways in which independent directors can help manage potential conflicts of interest in HFM Global.
Conflicts of interest exist everywhere, in everyday life and in all types of businesses. However, when you are operating an investment advisory business, the issue of conflicts of interest is at the heart of so many things that an investment adviser does. Getting it wrong can result in serious reputational damage, not to mention major fines and penalties.
The management of conflicts of interest is both a regulatory issue and a fiduciary one, imposing duties on investment advisers to act in the best interests of its clients and to make full and fair disclosure to its clients of all material facts relating to the advisory relationship.
This article will identify key areas in investment funds operations where conflicts most commonly arise. We explore how professional independent directors can assist investment advisers in building and maintaining a robust governance framework for managing conflicts of interests and offer some best practice considerations for funds in mitigating and reducing exposure to common conflicts.
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