Studies indicate importance of independent mutual fund boards

This probably isn't a shocking revelation, but it seems that yes, independent mutual fund boards are good (free WSJ Digg link).

A recent study by researchers at Binghamton University and Cornell University found that funds that received good Morningstar governance grades outperformed those with bad grades by 1.2 to 1.9 percentage points a year between late 2004 and the end of last year. Another study indicated that more independent boards have less patience with poorly performing funds, and are more likely to merge them with other funds.

Another interesting thing is that the SEC has started to require boards to explain why they hired a particular fund manager. I can see it now, "Yes, we kept The Vanguard Group as the manager of the Vanguard 500 fund, because, err, the name of the frickin' fund is the Vanguard 500 fund, and they've been running the fund for the last couple of decades." I'm going to have to see if I can track down how often a mutual fund board actually drops an advisor.