Irving Straus thinks he can help fix what ails the mutual-fund industry, or at least come to the aid of a few funds.

Mr. Straus wants to be an independent director on fund boards. In January, he took out a "position sought" ad in an investment-industry publication to offer his services, noting his decades of experience in the fund industry as a manager and consultant.

In addition, Mr. Straus sent out 10 letters directly to fund boards seeking a position, and he plans to send more. So far in reply, he has received only polite refusals, including a few from companies that noted their boards have a maximum age of 72 for directors. Mr. Straus is 83 years old.

As allegations of improper and illegal fund trading continue to rattle the mutual-fund industry, fund boards are drawing fire for not having properly policed the actions of fund companies. As a result, some directors face being replaced. Bank of America Corp., for example, pledged that it would try to replace eight of the 10 directors sitting on the board of its Nations Funds group as part of a settlement of civil fraud charges with regulators. The bank didn't admit nor deny wrongdoing as part of the agreement.

Demand for new directors also is expected to increase because a Securities and Exchange Commission proposal would require that independent directors -- those considered not to have ties to the fund-management company -- make up 75% of fund boards, up from the current majority requirement. Most observers think the move, if approved, will force fund companies to post a "Help Wanted" sign for board members.

"When push comes to shove and they have to get to 75%, the timing might be better to continue my campaign," Mr. Straus says. "There's a need out there. I'm a guy who can fill that need."

Executive-recruiting firms have had similar thoughts regarding the potential demand for directors. Heidrick & Struggles late last year set up a new practice specifically targeting candidates for fund boards.

As Mr. Straus has discovered, though, so far the most frequent message from boards has been either that they don't need new directors or that they can find candidates for any vacancies themselves. Heidrick & Struggles has been hired for just two board searches. There are more than 2,600 directors serving on fund boards, according to Management Practice Inc., a Stamford, Conn., consulting firm.

Changing the makeup of their fund boards is one of the most daunting tasks facing fund companies. For years, board members often have been picked for their connections to fund-company executives or for their prestigious experience in other fields, rather than for their understanding of how mutual funds work. Recruiters say fund companies have preferred tapping personal connections to find independent directors over sifting through résumés or hiring firms to search for outside applicants.

Some wannabe independent board members are hoping that will change. Frank Rachwalski, a former fund manager at Deutsche Asset Management, sent out 30 résumés a year ago, and another 30 or so in the fall, hoping to land a board position. His inquiries netted one reply -- from Monetta Funds, a small Chicago firm with $100 million under management. The message: We're not interested at this time.

Robert S. Bacarella, chief executive of Monetta, says the company gets board-application letters periodically and files them away for when a board position becomes available. He says that if the requirement for board composition shifts to 75% outsiders, the company will more likely eliminate an insider position than add an outsider.

"It's still a crony network," says Mr. Rachwalski. "You can't crack it. You've got to be recommended to a board by someone they know. The independence is shot."

Why even bother trying to get on a fund board? One big draw is the money. At larger fund companies, it isn't uncommon for directors to sit on dozens of boards and to receive a total of more than $100,000 a year for their services, according to Management Practice.

Joseph S. DiMartino, chairman of the Dreyfus funds' boards, was paid more than $800,000 last year by the funds. Mr. DiMartino is on the boards of nearly 200 Dreyfus funds, and is considered an independent director despite the fact that he was president and chief operating officer of Dreyfus Corp. from 1982 to 1994. A Dreyfus spokeswoman says Mr. DiMartino is on 11 board groups, each of which is comprised of a number of funds and determines its own compensation, independent of Dreyfus.

"They do pay for this stuff," says Mr. Rachwalski, who, as a money-market fund manager for Deutsche's asset-management arm and its predecessors, oversaw as much as $40 billion in assets. "The board of directors' fees would be a nice income for essentially a part-time job."

Mr. Straus, a longtime public-relations consultant to fund companies, agrees that money is part of the reason for seeking directorships, but only part. Since 2000, he has been on the board of two Atalanta/Sosnoff funds, for which he earned $8,000 last year.

About looking for additional board jobs, he says the money "is obviously interesting, but it wasn't my first consideration."

Mr. Straus's letter to fund boards notes that his experience with funds stretches back to the 1950s, when he was an executive with the Energy Fund. He founded the No-load Mutual Fund Association in 1981, now called the Mutual Fund Education Alliance, and earlier this year published the first issue of the Headstart Funds Report newsletter.

Unless the SEC does require more independent members, there may be a dearth of demand for new blood on boards.

Normally, board members stay on until "they reach mandatory retirement age or they die," says Jon Zeschin, a member of the Wasatch Funds fund boards and president of Essential Advisers Inc., an investment-advisory firm in Denver.
Mr. Zeschin says his duties include attending two-day quarterly board meetings and being on call for board-related activities. Recently, those activities have included evaluating liability insurance quotes for the funds and bids from outside service providers that handle administration, accounting and pricing for the funds. "There's a lot more that goes into it than showing up for a quarterly meeting," he says.

Mr. Zeschin, who received one of Mr. Rachwalski's résumés, says it is a mistake to think board slots pay well or require little time, as critics contend. Last year, Mr. Zeschin was paid $28,000 to sit on the boards of nine Wasatch funds.

Technically, candidates to fill independent-director spots are nominated by the current independent directors and elected by the full board. Recruiting firms say they are rarely, if ever, hired to do searches for directors by a fund board itself.
"I don't think anybody's been doing them for decades," says Rick Lannamann, vice chairman at Spencer Stuart, a leading executive-search firm. "I'm aware of only one retained search for a fund board in the 25 years prior to 2003."

Candidates put forward by fund-management companies typically weren't chosen for their knowledge of the industry. "Heretofore, there's been minimal interest in recruiting people who have strong investment backgrounds," says Mr. Lannamann. The investment companies were more likely to find those they knew "who were respectable citizens and wouldn't embarrass you. Or try to put on a couple of people who had fairly illustrious reputations but not necessarily investment expertise."

Mr. Lannamann says it isn't necessary for board members to know how to pick stocks or manage portfolios. But "it is helpful for a trustee to know what 'soft dollars' are all about," he adds, referring to the practice of using fund brokerage-commission dollars to buy research from brokerage firms. He says having a director with an understanding of securities valuation would have been helpful for a board considering whether to launch an Internet fund in 1999, near the peak of the technology-stock bubble.

Some expected that the scrutiny of the Sarbanes-Oxley Act of 2002, which places additional obligations on executives and board members, coupled with the fund industry's own scandal, would have decreased interest in fund board jobs.

"Several years ago, every early retiree in the mutual-fund industry wanted to cop one of these jobs along with $150,000 pay for four days of work," says Lawrence Lieberman, managing director of the Orion Group, an executive recruiter specializing in asset-management firms. "If you played your cards right, you could milk this into a pretty long-term gig." Mr. Lieberman says that some of the better-qualified candidates now want nothing to do with the liability exposure that a board spot brings.

And not everyone applying for a board spot is qualified, he says. "Some of the résumés we see are from the same guys who years ago wanted to be fund managers" because they'd had success investing the money of a few friends or co-workers, Mr. Lieberman says. "Now they want to be directors."

But seemingly qualified candidates are seeking board slots as well. In January, after reading about the SEC's push for independent directors, Bentley Myer decided his experience in the fund industry could be of benefit to a board.
"I thought I could be a candidate if a fund board said 'we have too many cronies here, we need some independent people, someone with some financial background,' " says Mr. Myer, who has a master's in business from the University of Pennsylvania's Wharton School and who managed bond funds for 10 years at William Blair & Co. before leaving the company last year.

Mr. Myer says he has sent e-mails to his contacts at several recruiting firms and is beginning to get in touch with fund companies directly. "I've tried to target it so I'm doing it at the size level that is more appropriate -- not Fidelity or Vanguard," he says, noting that those firms are more likely to seek out higher-profile candidates.

Mr. Rachwalski, likewise, thought his experience as a manager would be a selling point for fund boards. "I reported to both the Kemper and Scudder boards," he says, naming two money-management firms acquired by Deutsche. "Money-market funds are the most regulated funds around, which means I got very involved with the lawyers."

Dealing with boards taught Mr. Rachwalski how crucial it is to have truly independent board members. "There were some board members that management liked; they went along with management," he says. "There were others who were sticklers for detail. They asked a lot of tough questions and expected good answers."

While waiting for his shot on a board, Mr. Rachwalski has been teaching investing courses at Lewis University, a suburban Chicago school with 4,400 students. He also was an expert witness in two lawsuits against investment firms.

"I'm going to try [to find a board position] for another year," he says. "I was looking for something that was mentally challenging. Teaching fills that bill, too."