The Federal Government's push to change superannuation fund governance arrangements has received a boost from the Centre for International Finance and Regulation (CIFR).
A study, released by the CIFR this week, has recommended that all funds should have an independent Chair.
The study builds on a report issued last month, "Independence and the Governance of Superannuation Funds", and includes several additional recommendations related to fund governance, including a stricter ‘Fit and Proper' regime to ensure that individuals serving on boards have the technical and personal characteristics required to play their roles.
An author of the study, Dr Suzanne Le Mire from the University of Adelaide said the majority of fund executives interviewed felt their boards were functioning cohesively regardless of the limited number of independent directors.
"Fund executives are still very divided in their views on independence," she said. "Those who already have independent directors on their boards felt that independence was important in resolving conflicts of interest and providing a different perspective on fund issues."
However she said that others indicated independence didn't matter as long as all board members were committed to doing the right thing.
Le Mire said there were some issues on which fund executives were more aligned, including the view that all boards should a have a mix of skills and expertise and that tenure of board appointments should be more secure.
The study came up with six recommendations to improve super fund governance:
In regards to the final recommendation on fees, Le Mire said, "we believe that the retention of director fees by nominating organisations gives the wrong impression to members and could encourage those organisations to misconceive the obligations of the directors they nominate. Further, it has the potential at the margin to distort directors' allegiances."
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