Fund boards and managers are under growing scrutiny in Cayman. At wb.group, we help clients benchmark their governance frameworks against CIMA’s latest requirements, making sure policies, procedures, and oversight practices are not only compliant, but also efficient and practical to implement.

The Cayman Islands Monetary Authority’s (CIMA’s) first thematic review under its new Rule on Corporate Governance has put fund boards under the microscope. The findings highlight where best practices are taking root, and where too many funds are still falling short. If you sit on a board, this review isn’t just background noise. It’s a roadmap of what regulators now expect, and where your fund may be exposed.

In its first thematic review under the new enforceable Rule on Corporate Governance, CIMA examined governance practices across regulated sectors, including mutual and private funds.

The findings offer important reminders, and action points, for the boards of fund and fund managers.

What Funds Should Know

The good news – what CIMA found in terms of best practice:

  • Defined board mandates and roles,
  • Active oversight of risk, compliance, and internal controls, and
  • Some entities demonstrating annual policy reviews and conflicts declarations.

The bad news – some common weaknesses were found:

Unfortunately, there were more problems that were found. Might you and your funds fall foul of any of these?

  1. Policy Oversight Lapses: Few boards conducted annual reviews of governance frameworks or policies.
  2. Weak Conflicts Protocols: Insufficient clarity on disclosures, abstentions, and treatment of related, party transactions.
  3. Succession Planning: Largely absent or poorly documented across most entities.
  4. Inadequate Minutes: Board minutes often lacked sign offs, decision clarity, and record of conflicts.
  5. Remuneration Blind Spots: Lack of board, approved policies to align executive pay with long, term risk and strategy.
  6. Audit & Strategy Disconnect: Strategy and internal audit planning often not documented or communicated across control functions.

What should fund boards do about this?

If you’re concerned about any of these highlighted governance issues, here’s what you need to put in place:

  • Conduct annual reviews of policies and governance frameworks, with documented outcomes.
  • Establish and enforce robust conflicts of interest procedures.
  • Formalize and communicate succession planning, especially for independent directors.
  • Ensure board minutes are complete, signed, and capture key risks, approvals, and abstentions.
  • Align remuneration structures with governance objectives.
  • Define strategic objectives clearly and link them to board oversight and risk functions.

Why does this matter?

CIMA has moved from guidance to mandatory compliance. Funds must not only have sound governance, but they must also be able to demonstrate it.

As the bar for governance accountability rises, firms should use this review as a benchmarking tool to assess their own practices.

Need help reviewing your governance framework against the new Rule? Reach out to our regulatory advisory team for support. We can help you improve your governance and keep you on the right side of the regulatory framework.