of measures against the proliferation of weapons of mass destruction. Few would say that’s not a good recommendation, albeit that it may not have day-to-day relevance. So this was an international measure that we enacted into our laws.


But when it comes to the codification of directors’ duties and the


database, I take a different view. We aspire to be one of the leaders of the pack in terms of signing up to regulation, but in a competitive environment I think we need to be wary of going too far beyond what has been requested by a majority of stakeholders and clients.


Harris: On that, the government was prompted towards it a few years ago by investor groups seeking more transparency. But those same investor groups are now saying: ‘Wait a moment, we don’t want regulation; we don’t want things any more complicated.’


What they really want is transparency and we can give them that.


Our job is to do due diligence and ensure the information we’re giving is accurate. These are sophisticated investors and they don’t want a huge piece of regulation that makes life more complex or expensive.


Ackerley: We must also be very clear that the jurisdiction should not aim to use regulation as a revenue driver. That is a big issue. Regulatory actions should only ever be appropriate and necessary.


On the directorship transparency initiative, as far as I am aware there


is no equivalent legislation being proposed anywhere else. The whole issue is transparency, or the lack of transparency, around directors’ capacity but there are many ways of tackling that rather than bringing in unwieldy and expensive regulation and systems. There could simply be an amendment to the law to ensure it is a legal obligation to disclose pertinent information to interested parties when requested.


Fagan: There are two separate issues: regulation versus transparency. We’re all for transparency but in our experience investors have always been able to simply ask the question, although not all directors have, historically, responded. It is more important that CIMA has an accurate database of up-to-date information on those providing directorships to Cayman funds, so there is an independent source for investors to rely on.


Ackerley: The problem is that it’s also about perspective: there are commentators in the UK and the US who will state categorically that no-one should be a director of more than five or 10 funds. But those people simply don’t understand what we do and why it’s appropriate in the context of a non-executive position. The other fear is that the public release of this type of data could cause more harm than good.


Harris: They seem to have made up their minds that they want this database. They issued a survey to discover what people thought and it seems they concluded it was a good idea. It would mean all directorships would have to be disclosed.


Ackerley: The fact is that to ask about capacity of a director is a commercially reasonable question for an investor to ask. It gives a sense of whether the individual has time to devote to the business of being a director. But investors should be able to ask that question anyway, with an expectation of receiving a response. There is no good reason for not answering the question.


My concern is that the information being provided widely is going to


put Cayman in a position where we have to defend ourselves over and over again despite having taken extensive and costly action to attempt to address investor concerns. Frankly, there are simpler solutions and there is no need for a database.


Lock: Yes, I don’t imagine any public database is going to be used to send positive messages about the jurisdiction. Implementing a database does seem very reactive and ultimately not very helpful to the jurisdiction.


Windsor: The number of directorships is not what’s important. The level and quality of service should matter more.


6 CAYMAN FUNDS | 2014


“It is more important that CIMA has an accurate database of up-to-date information on those providing directorships to Cayman funds.” Mark Fagan


Ackerley: The focus on the number is an oversimplification of the sector—it’s as if every fund is the same and should have the same governance model. Funds vary so the number of funds that one can satisfactorily oversee varies.


Dickie: The main problem with databases is that they lack any context. An individual won’t get the opportunity to explain their directorship number and to discuss why it is as high or as low as it is. There is a big difference in the capacity available to someone providing this service on a full-time basis, compared with someone who may be semi-retired or otherwise employed.


I’m in favour of transparency to relevant users but some qualitative


context is needed to accompany the numbers. Simply providing raw numbers does not reflect the amount of time you devote to a fund or the services you actually provide.


Ackerley: If any investor calls me, they can have that information. It is not something that one should be sensitive to if the number is justifiable. Carne issues a quarterly summary detailing the number of directorships each director at our firm has, we freely provide this information to investors and consultants on request. We consider this to be best practice in terms of transparency.


Gauk: It looks like we’re all on the same side. We are under pressure from local regulators and international investors to provide this level of transparency. But why are they asking those questions?


Lock: Exactly, who is the public database for? Who is asking for it? I don’t think any of us are completely sure of the answer. Prospective investors can and will get the answers they desire from their due diligence.


Ackerley: I’ve not spoken to a single investor who specifically wants a database. They want to get the information directly from individuals.


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