The Effect of Board Structure on Egyptian Mutual Fund Fees: A Structural Equation Model Analysis

Abstract

Mutual fund governance has been a great concern among practitioners and has received considerable attention in the finance literature. This paper aims to assess the impact of mutual fund board structure and ownership structure on mutual fund fees. This study fill the gap on the literature by focusing on the Egyptian mutual funds during the period of 2007 to 2013 with using a final sample of 48 mutual fund. This paper applies a Structural Equation Modelling to solve the potential endogeneity problem between internal governance measures and fees. The results reveal that board size, proportion of professional directors, and proportion of audit committee are negatively correlated with mutual fund expenses ratio.

Keywords: Corporate Governance, Mutual Fund, Endogeneity.