If they aren't doing this right, there really isn't any point in having fund directors at all.

For example, only an amendment to the 1940 act can tighten the definition of what makes a fund director independent.

Federal law should mandate that fund directors are responsible to their investors, he said.

"You simply cannot parachute into four board meetings per year and call yourself a professional, committed fund director," he said.

He said: "Most mutual fund directors are paid a reasonable amount."

He would require that at least three out of four fund directors and all chairmen be independent.

Mutual fund directors could eliminate these fees if they were so inclined.

Some industry trackers are less concerned about the amount earned by a fund director than how it is awarded.

The firm settled its charges in 2011, but the fund directors would holdout until 2013.

Fund companies have less direct control over fund directors than one might assume.