Declaration of independence.

ONE mutual-fund executive hailed it as "a major victory for the investing public."

Another commentator called it "lunacy" and "a disaster for small investors."

Quite an orgy of opinion has greeted the U.S. Securities and Exchange Commission's bare-majority decision recently to require that mutual-fund boards be headed by independent chairmen.

Amid the noise, notice that markets haven t been quaking and mutual-fund management stocks haven t fallen out of bed. Most likely, the results will wind up somewhere about halfway between the rhetorical extremes.

There's an undeniable element of "atmospherics" here to use a word applied by Paul S. Atkins, one of two commissioners from the five-member SEC who voted against the new rule. Politics pushed the SEC to adopt the proposal whether it made good business sense or not.

There are big questions to be answered. Where are all the wise, diligent outsiders to be found who can take charge at the thousands of funds that lack an independent chairman now? How much is this going to cost, and what new other problems will it create?

The funds have 18 months to find the answers and chances are good they will work it all out with a minimum of fuss.

After the trading-abuses mess that occurred at Strong Capital Management Inc., with Richard Strong as chairman of both the fund manager and the funds, something had to be done. Said SEC Chairman William Donaldson: "An interested chairman is by definition, trying to serve two masters, and we should no longer abide this divided loyalty."

At the same time, some of the loftiest visions that have accompanied the adoption of the new rule are pie in the sky at best.

Take the idea that fund boards of the future, with outsiders running the show, will be quick to fire managers who perform poorly and replace them with others who can do better.

This overlooks the fact that most investors chose a given fund in the first place because of the manager's particular way of doing things.

Beyond that, outside directors will still be outsiders. At any fund group worth its assets, that means the inside management must remain the center of information and expertise, and power.

The push for reform of the fund industry has prompted talk that top mutual-fund talent may flee for less-regulated pastures, such as hedge funds. Also, new entrants to the business may be discouraged by the increased legal complexities of setting up shop.

Perhaps so. The fund business is still growing briskly, and profit margins figure to stay high. So motivations remain strong for fund managers to work at the business as assiduously as before while adapting to the new rules and taking whatever other steps are necessary to run a clean ship from here on out.