Governance in asset management: How the role of boards and independent directors is evolving
Across asset management and investment structures, boards are facing growing regulatory complexity, increased scrutiny, and higher expectations from stakeholders. As a result, governance is becoming a strategic function, helping organisations anticipate risks, navigate change, and support better decision-making.
Here Emmanuel Bégat, Partner at ATOZ Governance Services, speaks about the evolving role of governance, the value of independent directors and why anticipation is becoming as important as compliance.
How have governance expectations evolved in asset management and investment structures over recent years?
Governance expectations have increased significantly over the years and now cover a much broader range of topics than they did in the past.
Historically, governance was primarily associated with corporate governance and board oversight. Today, it extends to areas such as FATCA and CRS reporting, VAT compliance, tax governance, and transfer pricing.
This evolution is particularly visible in private equity and real estate structures, where tax authorities are paying increasing attention to transfer pricing arrangements and the level of substance within organisations.
As a result, governance now plays a much broader role in helping organisations navigate regulatory requirements, tax obligations and interactions with regulators and tax administrations.
What does strong governance really bring to organisations?
Governance is often seen as a safeguard, ensuring that organisations comply with their regulatory obligations. But strong governance goes beyond that.
Strong governance is fundamentally about anticipation. It means anticipating regulatory developments, changes in market practices and expectations of stakeholders, including tax authorities.
It can also help identify strategic risks. This is particularly important for startups and growing businesses. Governance can help shareholders think about the next stages of development, the evolution of processes and procedures, and the partners they may need as the organisation grows.
It also contributes to better decision-making by ensuring that decisions are taken with all the necessary information and a full understanding of the facts.
How can firms navigate increasingly complex governance requirements?
As governance requirements continue to evolve, organisations need access to specialised expertise and independent perspectives.
This is particularly true in areas such as tax governance, transfer pricing, regulatory compliance, and board effectiveness, where expectations continue to increase across jurisdictions.
This is precisely where governance partners can add value.
For our Governance Services teams, the objective is to provide clients with experienced independent directors who can contribute strategic insight, regulatory expertise, and practical governance experience across a wide range of structures. By combining independence with operational understanding, governance can become more than a compliance function. It can become a genuine driver of resilience, transparency, and long-term value creation.
What value can an independent director bring that internal teams cannot?
Independent directors bring an external perspective that is not influenced by day-to-day management considerations.
Unlike operational teams, independent directors are able to step back, challenge assumptions and assess situations with a broader view of risks and opportunities.
They also bring experience accumulated across multiple mandates, sectors, and governance environments. This exposure creates opportunities to identify best practices, improve processes and anticipate emerging challenges.
In one example at ATOZ Governance Services, governance discussions anticipated the impact of ATAD and DAC6 regulations before they came into force. This led to the early simplification of an
intermediary structure whose rationale could later have become difficult to justify under the evolving regulatory framework.
Independent directors can also play an important role in facilitating discussions, resolving disagreements, and helping stakeholders reach balanced decisions when different interests need to be reconciled.
Can AI replace a director today?
AI can be a useful tool for governance professionals in the future, particularly when it comes to processing large volumes of information. However, governance environments involve highly confidential information. Board packs often contain extremely sensitive information relating to strategy, compliance, and risk management, which raises important questions around confidentiality and control.
While AI may eventually help directors work more efficiently, human independent directors remain irreplaceable.
Even if AI can help summarise information, directors still need to review it themselves. The reason is simple: Responsibility ultimately rests with the directors, it cannot be delegated.
Ultimately, governance is about people. Boards are made up of people, organisations are built by people and decisions are taken by people. Human judgement, experience, and critical thinking will continue to play a central role in governance.
Strong governance is fundamentally about anticipation. It means anticipating regulatory developments, changes in market practices and the expectations of stakeholders, including tax authorities.
