Women ‘significantly under-represented’ on money market boards, says Fitch

Industry grapples with greater scrutiny as new regulations take effect

Fitch ratings agency. The agency said  diversity “can support effective and robust decision-making”.

Fitch ratings agency. The agency said diversity “can support effective and robust decision-making”.


Ratings firm Fitch said that women are “significantly under-represented” on the boards of Ireland’s €479 billion money-market funds industry, as the sector grapples with greater scrutiny as new regulations take effect.

Money-market funds (MMF) are mutual funds where banks, companies and governments can place money in the short term to get marginally higher income than putting cash on deposit in banks. The funds are also an important source of short-term funding for such entities.


Ireland, as home to more than a third of the European Union’s €1.3 trillion money-markets industry, is the most affected by the new European rules, which follow years of political wrangling, that aim to improve the transparency and resilience of the industry. The reputation of the sector was rattled a decade ago by the implosion of the $62.5 billion Reserve Primary Fund, which was caused by losses sustained on debt issued by Lehman Brothers, the investment bank that collapsed in September 2008.

The Irish segment of the market had been built up around types of funds that had to maintain a fixed share price – known as a constant net-asset value, or CNAV. Under the changes, such funds have to convert into public debt CNAVs, a low risk fund made up of government borrowings, and low-volatility NAVs.

Among the new rules, boards of funds must consider applying fees or restrictions on investors withdrawing cash if the entities do not have the ability to convert at least 30 per cent of their assets into cash within five days – or if more than 10 per cent of assets are redeemed by investors.


With the new rules placing additional responsibilities on money-market fund boards, Fitch went about assessing the governance of a sample of funds in Ireland and Luxembourg, which has been the second most-popular European location for CNAV funds.

It found that while all of the funds had independent directors, only a few had boards where independent directors made up the majority. “Women are significantly under-represented on MMF boards: in more than half our sample, there were no female directors on the board,” Fitch said.

The ratings agency said that a strong presence of independent directors on money-market fund boards can “allay” potential conflicts of interest, while diversity “can support effective and robust decision-making by adding varied backgrounds and perspectives, helping to ensure that investors’ best interests are served”.