The Investment Company Act requires that at least 40% of the board of directors of an investment company must be outsiders to:

Question

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The requirement that at least 40% of the board of directors of an investment company must be outsiders is intended to reduce possible conflicts of interest. By having a significant portion of the board made up of individuals who are not affiliated with the investment company, there is less likelihood of decisions being made that benefit insiders at the expense of investors. This requirement helps to ensure that the board is acting in the best interest of the investors.

The Investment Company Act Requires That at Least 40% of the Board