“Marvin Mann, the former chairman of printer company Lexmark International Inc., is renowned for his detailed grasp of business facts. But when someone asks how many mutual-fund boards he sits on, it takes him a few moments to calculate. Is it 276? No, that was last summer’s number. The latest tally is 292,” writes George Anders in today’s Wall Street Journal.

“By sheer number of board seats, Mr. Mann is one of the busiest directors in America. He is the lead independent trustee of Fidelity Investments’ mutual funds, overseeing an ever-expanding collection of funds investing in everything from Asian stocks to junk bonds. In other industries, even the most frenetic directors balk at sitting on more than 10 or 20 boards. But in the mutual-fund business, everything is so smoothly choreographed — and the workload so modest — that many directors sit on 100 or more boards and regard that as routine.”

“Until trading scandals surfaced last September, mutual-fund governance didn’t command much attention. Now regulators are portraying fund supervision as disturbingly lax, while many fund trustees worry that their time-honored job definitions are out of date. Some boards are hiring full-time investigators to help spot things they might otherwise miss. Others are caucusing more often apart from management, so they can talk bluntly about possible problems.”

“To change course, the mutual-fund industry must shake free of a governance system built on friendships between trustees and executives, gently administered boardroom reviews and a general belief that top management could be relied upon to get things right. Calls are growing these days for more aggressive oversight, just as boardroom wake-up initiatives swept through the corporate world following the collapse of Enron Corp.”

“In the past six months, fund-industry participants have agreed to pay more than $1.65 billion in fines and fee reductions to settle regulators’ allegations of improper trading. The latest accords, announced Monday, require Bank of America and Fleet Boston to pay a combined $675 million. Both were accused of allowing certain speculators to make rapid-fire trades in their mutual funds, at the potential expense of the funds’ longer-term investors.”

“New York State Attorney General Eliot Spitzer pointedly blasted mutual-fund directors for their role in the Bank of America mess. There’s evidence that those trustees ‘did not live up to the standard of care that they are obligated to live up to,’ Mr. Spitzer said. As part of the settlement, eight trustees on the boards of the bank’s Nations Funds agreed to step down.”

“Fund companies that haven’t been accused of wrongdoing, such as industry leaders Fidelity and Vanguard Investments are fighting to defend their ways of doing things. Fidelity is resisting calls for independent fund-board chairmen, arguing that insiders can do a better job. Fidelity contends that insiders — such as its own chairman, Ned Johnson — know the industry best and often have much of their personal wealth invested in the funds they oversee.”

“For his part, Mr. Mann, the Fidelity independent trustee, this month appeared before the Senate Banking Committee to justify Fidelity’s practices. In an interview immediately after testifying, Mr. Mann portrayed Fidelity’s trustees and top executives as generally working hand in hand.”

” ‘We trustees don’t do drastic things,’ Mr. Mann said. ‘The trustees don’t hire and fire portfolio managers. They counsel with management.’ He added: ‘We rely on the Fidelity staff for the data we get. That works just fine. We have complete confidence.’ “

“One of the loudest agitators for change is Warren Buffett. In the latest annual report of Berkshire-Hathaway Inc., the Omaha, Neb., conglomerate that he controls, Mr. Buffett urges fund directors to be tougher, saying that ‘the blatant wrongdoing that has occurred has betrayed the trust of so many millions of shareholders.’ He earlier had quipped in congressional testimony that if mutual-fund trustees are supposed to be watchdogs, they must have been chosen from the kennels of Chihuahuas.”