The government recommendation to create the position of ‘trustee director’ has been firmly dismissed by the Association of Superannuation Funds of Australia (ASFA) as doing little to increase accountability.
In a submission to the Federal Government, ASFA stated that the proposal to increase a director’s accountability to members remained a concern for the association’s members, despite Treasury showing signs of not supporting it.
“We are not convinced that increased accountability will be achieved in any meaningful sense by creating a distinct new office of ‘trustee director’,” the ASFA submission stated.
ASFA drew particular attention to the proposal that directors “act solely for the benefit of members”, stating that this would contradict the basic principle that a director’s primary obligation is to the company.
Rather, it suggested efforts to increase accountability would be better served by focusing attention on the “effective enforcement of existing legal duties”.
ASFA said that, currently, super trustee directors are potentially personally liable in six ways, including duty of care, financial services misconduct, trust law proscriptions and more.
If the position were introduced, the association said there could be unintended consequences, such as the need for individual directors to seek independent legal advice on their decisions, and the fact that directors would be reluctant to take risks to achieve above-average returns.
It also said it would become increasingly difficult to attract directors to the superannuation industry, as talented directors would be more likely to take up positions in banks and life companies where personal liability was not an issue.
