Bite the bullet on governance

Mon Nov 1, 2004



You heard it here first: corporate governance will be the next big issue to hit hedge funds. The industry is wide open to criticism on this front. Word to the wise - jump on the bandwagon early, because soon you will be hearing about it from institutional investors and regulators.

For hedge funds, corporate governance usually translates to the following: Is there any independent oversight of a fund, and is there any internal or external oversight and standards in important areas such as valuation of assets? Usually this boils down to whether a fund has a board, and whether that board has independent directors. Another issue - does a hedge fund have a compliance structure and procedures that provide genuine checks and balances to the gunslingers out on the trading floor?

When it comes to corporate governance, hedge funds are clearly still in the Dark Ages. Most hedge...

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