Government proposals to improve superannuation governance must stand
In a strong show of support for reforms to improve superannuation governance, including a minimum one-third independent directors and an independent chair, Governance Institute of Australia says the proposals will improve board renewal processes, because they will assist the boards to identify the skills, knowledge, experience and capabilities needed to meet not only the current but also the future challenges of the industry.
Governance Institute will continue to advocate for a majority of independent directors, claiming independent directors need the numbers to be able to influence how the board is operating.
‘’One third is a pragmatic, initial step in ensuring board effectiveness and focusing super fund boards on board composition and the skills needed to protect the funding of the retirement of a rapidly increasing number of Australians,” say’s Governance Institute policy director Ms Judith Fox.
‘’When assessing the skills and competencies needed to align with the strategic objectives of the super fund, the board can also assess the current and desired diversity that it seeks. Improved diversity of thinking has been shown to correlate with high performance,
“Ultimately Governance Institute would like to see a majority of independent directors on the boards of superannuation funds, which would align with the board composition on their investee companies — a much better governance outcome.
“Having said that, we applaud these proposals, as they allow for an orderly transition to a much more effective governance framework which addresses the conflicts of interest currently inherent across the entire industry,” Ms Fox concluded.
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Media contact: Hannah Edwards, firstname.lastname@example.org
About Governance Institute of Australia
A national membership association, advocating for a community of 40,000 governance and risk management professionals from the listed, unlisted and not-for-profit sectors. Our mission is to drive better governance in all organisations, which will in turn create a stronger, better society.