In trying to get more mutual-fund reform done before he walked out the door at the Securities and Exchange Commission, Bill Donaldson may...

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In trying to get more mutual-fund reform done before he walked out the door at the Securities and Exchange Commission, Bill Donaldson may have inadvertently slammed the lid shut on what he clearly considered a key change for investors.

Donaldson, who left his post as SEC chairman two weeks ago, pressed for his agency to reintroduce a rule — first passed last year — that requires funds to put an independent chairman of the board in place by January. The rule was shot down June 21 by a federal appeals-court review, the result of a U.S. Chamber of Commerce lawsuit that argued regulators had not taken enough time to study alternatives or the financial impact the new rules would have on funds and shareholders.

But Donaldson rushed a new vote — supposedly based on new estimates that the cost of the rule would be minimal and that disclosure would be an ineffectual alternative — and so now the change is back on track.

For now.

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U.S. Rep. Christopher Cox, R-Calif., has been tapped by President Bush to succeed Donaldson, a change awaiting Senate approval.

To get the independent chairman’s rule passed, Donaldson crossed party lines and voted with two Democratic SEC commissioners; the two Republican commissioners voted against the rule.

If the rule again is struck down in court — and the Chamber of Commerce is not giving up easily — it will come back to an SEC where party politics suggests it will go down to defeat.

Moreover, observers on Capitol Hill suggest Cox is less regulation-minded than Donaldson; one way for him to signal there’s a new sheriff in town would be for him to step in and pull the agency back from Donaldson’s pet cause.

Here’s where things get a bit goofy. Some in the media have suggested that the fund industry is fighting the change tooth and nail. Consumer advocates have hinted the rule is necessary to make sure investors are adequately protected against future scandals.

And if Cox steps in to help the change go down, he will be painted as being anti-investor.

It makes good sound bites, but there’s just no proof investors will notice the difference.

The few studies done on the issue have suggested that having an independent chairman makes no dramatic difference in the two areas that matter most to a shareholder: performance and costs. In fact, the tiny difference that does exist actually shows that funds chaired by insiders come out on top.

That might change in the future, as the sample of funds with independent chairs grows.

But the bottom line is that an ordinary investor can’t tell the difference between a fund with an independent chairman and one with an insider at the helm.

It’s hard to suggest that with three-quarters of a board being independent, the chairman would have enough power to railroad the other directors into making decisions not in shareholders’ interests.

While an independent chairman is the right way to go, investors should expect the rule to go down.

It will be a mild disappointment when it happens.

In the end, shareholders buy a fund for its managers, not for the board. No alterations of the rules will change that.

Chuck Jaffe is senior columnist at CBS Marketwatch. He can be reached at jaffe@marketwatch.com or Box 70, Cohasset, MA 02025-0070.