Corporate governance at mutual funds Perhaps another reason for being cautious about the benefits of institutional ownership is that institutional investors have their own governance problems. As you are no doubt aware, such problems at mutual funds have been manifest in headlines over the past year.
I would now like to discuss both the conflicts of interest that lie at the heart of many of the recent mutual fund scandals and the responses by investors and regulators. Arguably the most fundamental conflict of interest at mutual funds occurs because the compensation of mutual fund managers and management companies is generally tied to the value of the assets they manage.