Instead, it seems to be simply "Good is enough."

That's the two-sided takeaway from a study released last month by the Independent Directors Council and the Investment Company Institute, reviewing common fund-governance practices.

The study showed that the industry's "best practices" are widely in use, but in praising these now widespread governance procedures, it also seems to be settling for them. They're good, so they're sufficient.

For shareholders, there is no denying that it is good news that nearly 90 percent of fund boards now have at least three-quarters of their seats filled by independent directors. Less than a decade ago, roughly half of all fund boards were at this level of independence; current rules require only that independent directors hold at least half of the available seats on the board, but a move to raise the requirement to a supermajority spurred many fund companies to make the change on their own.

Likewise, nearly two-thirds of the fund complexes surveyed have an independent chairman for their board, a nice step up from the recent past. Throw in "independent lead directors" - a fine-line distinction where the top director does not have the title of chairman of the board - and nearly 85 percent of fund boards have an independent leader.

This, too, is a positive move compared with past numbers; but it, too, was driven by the threat of rule changes that would have required independent leadership.

The other strong positive from the industry study was that more than 90 percent of fund firms have separate legal counsel to serve their independent directors, a huge increase from 2000. It is hard to be truly independent if you get your legal advice from the fund company's attorneys, so this is a big step forward.

The problem is that the industry is so busy touting its best practices that it is not pursuing "better practices."

For example, most fund firms have just one board to serve all of their funds, or may have a few boards, each covering a specific fund type (so that the equity funds have a different directorate than the bond funds). In some cases, that means the board oversees dozens or even hundreds of issues.

When directors get a fat paycheck for overseeing an entire fund family, "independence" comes into question. It's hard to believe they will bite the hand that feeds them; it is equally hard to believe they can serve so many funds with the same kind of diligence they would have if they were limited to a set number of funds - say, a maximum of 20.

Further, the entire definition of "independent director" needs to be called into question. A decade ago, the fund manager's uncle could be granted independent status, provided he did not help his nephew run the fund company; today, he would be considered an interested director. But someone who worked his entire career at a fund company and who then retires is still allowed to be considered "independent," and fund boards are frequently dotted with trustees whose work career came in the family.

The Securities and Exchange Commission has backed off its plans to require an independent chairman for fund boards, but it rekindled that effort, while also redefining what constitutes a potential conflict of interest for trustees. It should also up the independence quotient and make the minimum standard 75 percent; fund companies moved to the higher levels anticipating this change, and they will backslide if they do not believe a change is coming.

Any time there are changes to how fund boards work, the rules must be tweaked carefully, so that they do not add extra layers of costs and concerns to small operators. Some tiny funds have a board made up of just three people; adding a fourth to allow for the three-quarters independent standard would create new costs and problems. That can be tackled with an exemption for funds under a certain asset size.

But for the industry's big firms, having an independent chair, directors whose backgrounds are with the competition (rather than the home team), and who cannot serve on too many funds would be a better practice than what is in place now.

And if you want proof that things can be better, consider the following from the study released last month: "While current rules require only that funds disclose whether or not the audit committee includes a financial expert, 97 percent of participating complexes report having a financial expert on the audit committee."

That's nearly universal acceptance of the best practice, but that best practice is just one "financial expert" on the board, and sitting on the audit committee.

Most fund investors probably believed that their board of directors was made up entirely of "financial experts." Maybe someday it will be.