“Observing robust governance practices among Luxembourg fund boards is encouraging, significantly contributing to the sector's strength and resilience,” said Andrea Montresori, partner at PWC Luxembourg and ILA Fund Committee Chair, in a press statement on Thursday 23 January 2025. Photo: PWC Luxembourg

“Observing robust governance practices among Luxembourg fund boards is encouraging, significantly contributing to the sector's strength and resilience,” said Andrea Montresori, partner at PWC Luxembourg and ILA Fund Committee Chair, in a press statement on Thursday 23 January 2025. Photo: PWC Luxembourg

The 2024 Luxembourg fund governance survey reveals that 26% of fund boards now include at least one female member, highlighting ongoing progress in gender diversity. That’s up from 22% in the previous edition.

A key finding from the 2024 Luxembourg fund governance survey, on Thursday 23 January 2025, revealed that 26% of fund boards now include female representation, underscoring the industry’s ongoing commitment to diversity. The majority of board members are still male, noted the survey, but the 2024 edition highlights a “positive trend,” with female representation increasing four points.

Now in its twelfth year, the survey was conducted by PWC Luxembourg in collaboration with the Luxembourg Institute of Governance (ILA). Based on data collected from 115 participants between 20 June and 20 October 2024, the survey examined governance practices across management companies (mancos), super mancos, alternative investment fund managers (AIFMs), undertakings for collective investment in transferable securities (Ucits) and alternative investment funds (AIFs).

Board composition

The report highlighted progress in diversifying board membership and refining organisational practices. Independent directors accounted for 41% of board members, an increase from 39% in 2022. Gender diversity also improved, with 26% of boards including at least one female member. Boards demonstrated enhanced engagement, meeting an average of 10 to 11 times annually. The widespread adoption of circular resolutions continued, with 92% of boards reporting their use.

Boards showed increased focus on strategic oversight and risk management. Clearer delineation of roles and responsibilities contributed to enhanced governance and accountability. Conflict-of-interest management practices improved significantly. Among Ucits boards, 95% maintained a conflict-of-interest register, compared to 86% in 2022. For AIF boards, this figure rose from 72% to 78%.

AML and ESG practices

Anti-money laundering measures remained a priority, with 85% of boards implementing stringent policies and procedures. Environmental, social and governance considerations featured prominently, as 65% of boards reported having an ESG committee or dedicated ESG roles, reflecting increased integration of sustainability into governance frameworks.

New regulations

The survey revealed that 90% of respondents expressed confidence in their regulatory compliance frameworks. Boards actively engaged with emerging regulatory challenges, such as the Digital Operational Resilience Act (Dora), information and communication technology (ICT) risk appetite, and updates like the self-assessment questionnaire, which replaced the long form report.

Andrea Montresori, ILA fund committee chairman and PWC Luxembourg partner, acknowledged the resilience of Luxembourg’s fund industry amidst the complex global environment. He noted that boards not only adapted governance practices to align with ESG and regulatory requirements but also committed to continuous education to foster sectoral sustainability.

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