Morningstar analyst Christopher Traulsen wants members of Fidelity's board to name an independent chair and split the board up. "I hardly expect [CEO] Ned Johnson to listen, but on the off chance that a board member or two has a spare minute to actually think in between reviewing data points on more than 300 funds, here's what I'd like to see," Traulsen says in Morningstar's monthly newsletter the Fidelity Fund Family Report.

He says having an independent chair is a no-brainer. "Fidelity's fund board has repeatedly allowed Fidelity funds to grow too large to manage efficiently," Traulsen notes. "Having an independent chair responsible only to fund-owners might help avoid some of these problems." The board oversees 322 funds and has formed committees to split up the work, but Traulsen does not think this is enough. "I think it's nearly impossible to undertake a detailed, independent analysis of every single fund when you're tasked with overseeing so many," he says. Fidelity believes the board should have the discretion to appoint any individual of its choosing, a spokesman said. Traulsen did not return calls when asked to elaborate on the report or respond to Fidelity.

Traulsen also suggests Fidelity close funds that are suffering from asset bloat. While the management company has said asset size is not an issue, the board is ultimately responsible for deciding to close a fund. "We monitor cash flows and asset size in all of our funds carefully and have closed a number of funds over the years when we've believed it to be in the best interest of shareholders," the spokesman said. "The board should commission an independent study of the firm's capacity, with a specific focus on additional costs--including opportunity costs of forgone investments, market impact costs, etc.--imposed by fund size on investors, and close any funds that are in danger of having their performance eroded," Traulsen says.

Morningstar has assigned a "good" rating in board quality for all of its stewardship-rated Fidelity funds and a majority of the funds have a "B" overall rating.