The Australian Prudential Regulation Authority (APRA) has been urged not to impose specific requirements on the size of superannuation fund trustee boards and to allow some flexibility.
The Association of Superannuation Funds of Australia (ASFA) has used a submission responding to draft prudential standards to caution against placing a limit of 12 on the size of trustee boards.
The submission said that while ASFA endorsed the need for Registrable Superannuation Entity (RSE) licensees to have boards of manageable size in order to ensure they operated effectively and believed the optimal size was actually somewhere between six and 12, it nonetheless recognised that funds needed “the flexibility to determine that a larger number of directors may be valuable given their specific circumstances”.
“In particular, trustee boards need to have a sufficient number of members to enable the effective operation of a trustee board’s committee structure and to ensure that the required skills and a variety of perspectives are incorporated into the trustee board,” the submission said.
“Trustees need the flexibility to be able to create a structure that is the most effective for their fund and its particular circumstances. In order to do so, trustee boards need discretion as to their size.”
The submission said it needed to be noted there were a number of the factors that could contribute to large boards, including when a merger of funds occurred.
