Desperately Seeking Directors

You are paying them, but it's not so simple finding out who they are.

Lately, the opaque role of your mutual funds' directors has garnered more attention than usual. This week, the Securities and Exchange Commission convened a two-day roundtable to discuss the subject. (See our coverage of the event.)

Maybe the SEC should first make it easier to find out who serves on these boards. If you own stock in a public company, a list of directors is easy to find. It's usually in the annual report. That's not always the case for directors of mutual funds.

There are a few ways to go about unearthing information on fund directors. You can call the toll-free number on the back of a fund's prospectus and ask the company to mail you the statement of additional information, or SAI. Remember those words.

A statement of additional information is different from a fund's prospectus. For one, the fund company is not required to deliver the SAI to every investor; it merely has to provide the document upon request. And it is, quite frankly, an ugly legal document that is no pleasure to read. However, it does contain information on your mutual fund's board of directors, including their names, backgrounds, addresses and compensation.

If you call a fund company to request an SAI, you should know to ask for that document by its full name.

I called a few mutual fund companies and inquired, "How would I go about getting information on a particular mutual fund's board of directors?" That general question led to loads of confusion at some firms. Some of the phone reps had absolutely no clue what I was talking about.

At T. Rowe Price, a rep responded with the following: "I can give you a manager's name or I can send you a prospectus." I asked about the statement of additional information. "There is something called that, but the board of directors is in the prospectus," he said.

Well, at T. Rowe Price, it's not. "The prospectus gives the investment advisory committee," says a T. Rowe Price spokesman. "I think he probably confused the board with the investment advisory committee. It is better to make it crystal clear when you call."

At Janus, I also encountered complete befuddlement when I asked the above question. The four people to whom I spoke had no idea what I was talking about. Does it have to be this hard?

Part of the problem may have been that I was asking for the board of directors. At some firms, the same body of people is called the board of trustees.

At Fidelity, this search is not so exasperating. The board of directors is listed on each fund's annual and semiannual report. If you want the finer details on the boards, again, you will have to look in the SAI.

I also looked on the Web sites of the three abovementioned firms, but none of them posts the funds' SAIs online. I suppose if they saw enough investor interest in the documents, they would start delivering them on their sites.

You can find statements of additional information on the Internet, but they are in the SEC's EDGAR database. And that's where a lot of fund companies will direct you.

When I downloaded a prospectus for the (PRGIX Quote - Cramer on PRGIX - Stock Picks)T. Rowe Price Growth & Income fund from the T. Rowe Web site, I immediately saw the following message: "If you would like to electronically access additional information about the fund after reading your prospectus, you may do so by accessing the Securities and Exchange Commission Web site (at http://www.sec.gov) that contains the Statement of Additional Information regarding the T. Rowe Price Funds."

That sounds a lot less complicated than it is.

Using the SEC's own EDGAR site, you can go to "Special-Purpose Searches" under "Search the SEC Database." Once there, go to the prospectus search. The SAIs are lumped in with the fund prospectuses.

You may have to fiddle with the fund's name. Often, the filings will appear under a slightly different name than the actual fund or the fund company. For example, filings for the Oakmark funds appear under Harris Associates, the funds' adviser.

Your search will likely turn up a lengthy list of documents, particularly if you are searching within a large family like T. Rowe Price. (For this family, you should use the keyword "Price.")

Here's one helpful hint: Use your browser's Find tool. Plug in the words "statement of additional information." That way you can quickly search each document to see if it's the one you need.

If you are using other sites for searching the EDGAR database, such as FreeEDGAR and EDGAR Online, you can look for Form 497 or 485.

Once you've uncovered the SAI you are looking for, you will have to wade through the legalese of the documents themselves. That is another trauma altogether.

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Do you even care about your funds' directors? Tell me what you think, and please include your full name. You might also want to read Anne Kates Smith's recent column on the role of fund directors.