To protect fund investors against conflicting interests with fund management companies, U.S. funds have mandatory independent directors. That is not the case for funds in Europe, set-up in accordance with the UCITS Directive. Nevertheless, many UCITS funds have voluntarily appointed independent board members. Using a sample of Luxembourg UCITS, this paper finds no consistent evidence that more independent boards have lower costs or achieve better performance. However, there are consistent and significant differences between fund management companies that are part of banks or insurers and independent managers. Funds of the latter category have higher costs, but perform better after costs.