Board Independence and Mutual Fund Manager Turnover

This paper studies the relationship between board independence and manager turnover in the mutual fund industry. Using the Lipper 2003 mutual fund board data, we find that manager turnover is more likely to happen to funds with poor prior performance and more independent boards. Consistent with previous studies such as Tufano and Sevick (1997), our research provides new evidence in support of the Securities and Exchange Commission's approach of improving fund governance by promoting board independence.