7 Governance Issues in Offshore Companies Used as Private Investment Funds

2018 ◽  
Author(s):  
Spangler Timothy
Keyword(s):  
Board Of Directors ◽  
Private Investment ◽  
The United States ◽  
Fiduciary Duty ◽  
Duty Of Care ◽  
Cayman Islands ◽  
Investment Funds ◽  
The Board Of Directors ◽  
The Uk

This chapter examines issues of governance arising from the use of offshore companies as private investment funds. Funds established in offshore jurisdictions are often structured as limited companies that issue shares to investors. Governance issues can arise in offshore companies when voting rights are separated from economic participation. The chapter first considers the role of the board of directors in private investment funds before discussing taxation issues affecting offshore companies used as private investment funds in the UK and in the United States. It then explains the duties of directors under Cayman Islands law, including fiduciary duty, duty of care, diligence, and skill, and duty of confidentiality. It also describes the composition of the board of directors, its meetings, relationship with the fund manager, and responsibility for approval of fund documentation.

6 Governance Issues in Partnerships used as Private Investment Funds

2018 ◽  
Author(s):  
Spangler Timothy
Keyword(s):  
Board Of Directors ◽  
Private Investment ◽  
Fiduciary Duty ◽  
Investment Funds ◽  
Limited Partnership ◽  
Advantages And Disadvantages ◽  
The Board Of Directors ◽  
Partnership Agreement ◽  
The Uk ◽  
Limited Partnerships

This chapter examines issues of governance arising from partnerships used as private investment funds. A limited partnership has two categories of partner: general partners and limited partners. The chapter first considers the role and duties of general partners and limited partners before discussing the English law vs Delaware law on limited partnerships, focusing on the advantages and disadvantages of Delaware law. It then looks at the UK legal reform on limited partnership and how the limited partnership agreement can be used to address the governance challenge presented by private investment funds. It also explains the duties of partners with respect to the governance challenge, taking into account the fiduciary duty in Delaware partnerships, the fiduciary duty of the board of directors under Delaware law, the Delaware Court of Chancery’s ruling in USA Cafes, and developments following USA Cafes.

5 The Regulatory Duties Arising from the Provision of Investment Advisory and Management Services

2018 ◽  
Author(s):  
Spangler Timothy
Keyword(s):  
Financial Services ◽  
Public Investment ◽  
Private Investment ◽  
The United States ◽  
Fiduciary Duty ◽  
Regulatory Regime ◽  
Investment Funds ◽  
Investment Advisers ◽  
The Uk ◽  
Management Services

This chapter examines the regulatory duties of investment managers arising from the provision of investment advisory and management services. Managers of private investment funds that are authorised or regulated as investment advisers or managers can owe regulatory duties arising under the Financial Services and Markets Act 2000 (FSMA) in the UK and the Investment Advisers Act of 1940 in the United States. The chapter begins with a discussion of the UK Financial Conduct Authority’s (FCA) regulation of the conduct of firms authorised under the FSMA, including collective investment schemes, public investment funds, and fiduciary duty in the financial services regulatory regime. It then considers the FCA’s regulatory response to private investment funds as well as the U.S. Securities and Exchange Commission’s compliance programme for investment advisers and managers primarily under the Advisers Act. It concludes with an analysis of financial services regulation of fiduciary duties.

15 Litigation and Enforcement involving Private Funds after the Global Financial Crisis

2018 ◽  
Author(s):  
Spangler Timothy
Keyword(s):  
Financial Crisis ◽  
Hedge Funds ◽  
Global Financial Crisis ◽  
Private Investment ◽  
The United States ◽  
Regulatory Regime ◽  
Investment Funds ◽  
The Subject ◽  
The Global Financial Crisis ◽  
The Uk

This chapter focuses on the increase in the amount of litigation and enforcement actions against private investment funds in the United States, the UK, and across the globe as a result of the global financial crisis. As more disputes arose during the course of the global financial crisis, the legal and regulatory regime impacting private investment funds has been the subject of closer scrutiny than has been seen in previous decades. The chapter first considers the Securities and Exchange Commission’s (SEC) enforcement actions against hedge funds as well as U.S. civil litigation prior to the financial crisis before discussing Dodd-Frank and its effect on enforcement. It then examines the SEC’s enforcement actions regarding broker-dealer registration, along with some of its key enforcement actions after Dodd-Frank. It also analyses the Financial Conduct Authority’s enforcement priorities after the global financial crisis and key litigation in the UK involving private investment funds.

12 Board of Directors Composition as a Means to Mitigating the Governance Challenge

2018 ◽  
Author(s):  
Spangler Timothy
Keyword(s):  
Board Of Directors ◽  
Private Investment ◽  
Independent Directors ◽  
Investment Fund ◽  
Executive Directors ◽  
Fund Manager ◽  
Investment Funds ◽  
Key Factor ◽  
The Board Of Directors ◽  
Executive Decision Making

This chapter explains how the composition of the board of directors can mitigate the governance challenge in private investment funds. The dependence of a private investment fund on the fund manager is a key factor in the governance challenge. Directors of the fund vehicle must ensure that their fiduciary duties are adequately fulfilled, especially in circumstances that put them in direct conflict with the fund manager. The inclusion of directors who are independent of the fund manager can serve to better address the governance challenge for all participants in a particular investment fund. The chapter first considers the two complementary functions of independent directors—providing specialized advice and expertise to the executive directors and monitoring executive decision-making—before discussing their duties as well as their effectiveness. It also examines the role of directors in general partner vehicles and the limitation on the effectiveness of independent directors.

scholarly journals Composition and Activity of the Board of Directors: Impact on ESG Performance in the Banking System

2018 ◽  
Vol 10 (12) ◽  
pp. 4699 ◽  
Author(s):  
Giuliana Birindelli ◽  
Stefano Dell’Atti ◽  
Antonia Iannuzzi ◽  
Marco Savioli
Keyword(s):  
Board Of Directors ◽  
Fixed Effects ◽  
Critical Mass ◽  
Banking System ◽  
The United States ◽  
Fixed Effects Panel Regression ◽  
The Board Of Directors ◽  
Corporate Social ◽  
The Impact

A growing body of research suggests that the composition of a firm’s board of directors can influence its environmental, social and governance (ESG) performance. In the banking industry, ESG performance has not yet been explored to discover how a critical mass of women on the board of directors affects performance. This paper seeks to fill this gap in the literature by testing the impact of a critical mass of female directors on ESG performance. Other board characteristics are accounted for: independence, size, frequency of meetings and Corporate Social Responsibility (CSR) sustainability committee. We use fixed effects panel regression models on a sample of 108 listed banks in Europe and the United States for the period 2011–2016. Our main empirical evidence shows that the relationship between women on the board of directors and a bank’s ESG performance is an inverted U-shape. Therefore, the critical mass theory for banks is not supported, confirming that only gender-balanced boards positively impact a bank’s performance for sustainability. There is a positive link between ESG performance and board size or the presence of a CSR sustainability committee, while it is negative with the share of independent directors. With this work, we stress the key role of corporate governance principles in banks’ ESG performance, with relevant implications for both banks and supervisory authorities.

4 The Legal Duties Arising from the Provision of Investment Advisory and Management Services

2018 ◽  
Author(s):  
Spangler Timothy
Keyword(s):  
Private Investment ◽  
Fiduciary Duty ◽  
Duty Of Care ◽  
Fund Manager ◽  
Investment Funds ◽  
Fund Managers ◽  
Legal Relationship ◽  
Legal Structures ◽  
The Impact ◽  
Management Services

This chapter discusses the legal duties owed by investment managers to their clients arising from the provision of investment advisory and management services. It first considers the key documents that establish the legal relationship between fund managers and investors before explaining the investment manager’s duty of care and fiduciary duty of loyalty to the client. It then examines the contracts involved in private investment funds between the fund vehicle and the fund manager, along with the fiduciary duties of directors of limited companies. It also analyses the impact of structure of investment management firms on legal duties, taking into account multiple management vehicles, the effect of fund management economics on legal structures, and the dividing line between fund manager and investors.

2 Marketing Private Investment Funds

2018 ◽  
Author(s):  
Spangler Timothy
Keyword(s):  
Financial Services ◽  
Private Investment ◽  
The United States ◽  
Investment Funds ◽  
Public Marketing ◽  
Net Worth ◽  
Financial Regulations ◽  
Private Placements ◽  
Investment Advisers ◽  
The Uk

This chapter examines how private investment funds are marketed, first by considering the different distribution approaches for such funds. Private investment funds are distributed mainly through private placements rather than public offers. With limited exceptions, this is generally driven by restrictions on public marketing efforts imposed by financial regulations such as the Financial Services and Markets Act 2000 (FSMA) in the UK. The chapter proceeds by discussing financial promotion restrictions in the UK as well as exemptions to these restrictions, including one-off communications, high net worth individuals, and sophisticated investors. It also explains the promotion of collective investment schemes (CIS) and the consequences of CIS categorisation before concluding with an analysis of laws that govern the marketing of private investment funds in the United States, namely: the Investment Company Act of 1940, the Investment Advisers Act of 1940, the Securities Act of 1933, and the Securities Exchange Act of 1934.

15. Directors

2021 ◽  
pp. 406-453
Author(s):  
Derek French
Keyword(s):  
Corporate Governance ◽  
Board Of Directors ◽  
Court Cases ◽  
Public Companies ◽  
Legal Principles ◽  
Corporate Governance Code ◽  
The Board Of Directors ◽  
The Uk ◽  
The Relationship

This chapter explores the role of directors in corporate governance. Rules on appointment and removal of a company’s directors are considered, followed by public disclosure of the names of directors and their work as a board, their remuneration and their powers of management. The chapter also considers the legal categorisation of directors, whether as fiduciaries, agents or trustees; the relationship between directors and shareholders of public companies; transparency; and general legal principles regarding the board of directors. Relevant legislation such as the Companies Act 2006 and the UK Corporate Governance Code, as well as particularly significant court cases, are mentioned.

3 Taxation of Private Investment Funds

2018 ◽  
Author(s):  
Spangler Timothy
Keyword(s):  
United States ◽  
Joint Venture ◽  
Private Investment ◽  
The United States ◽  
Investment Funds ◽  
Conflicting Interests ◽  
Tax Status ◽  
The Uk ◽  
Limited Partnerships

This chapter discusses the taxation of private investment funds, addressing questions such as whether there are any conflicting interests between investors and/or managers and/or others involved in the fund (including joint venture parties) in relation to any aspect of the tax affairs of the fund; whether any investor could be liable (whether on its own, jointly, or jointly and severally) for any taxation liability of the fund or any of its subsidiary vehicles; or the extent to which the tax treatment of the fund or any of its subsidiary vehicles is dependent on the tax status of investors. The chapter compares the taxation of limited partnerships and offshore companies in the UK and in the United States.

Differences between company officers and company executives

2001 ◽  
Vol 24 (3/4) ◽  
pp. 157-161 ◽  
Author(s):  
Lisa V. Sison ◽  
Brian H. Kleiner
Keyword(s):  
Board Of Directors ◽  
Duty Of Care ◽  
Corporate Structure ◽  
Corporate Executives ◽  
The Board Of Directors ◽  
Duty Of Loyalty

Considers the nature of the modern corporate structure and the divorce of ownership from control. Discusses the board’s role versus the management’s role. Looks at hiring and appointing. Covers specific responsibilities of corporate executives and compares this with the role of corporate officers. Addresses the duty of loyalty and the duty of care. Provides some guidelines for performance of duties by boards and officers. Suggests some initiatives which can build the effectiveness of the board of directors.

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