Industry super funds’ high investment returns do not guarantee effective governance, the Australian Institute of Company Directors believe.
The institute is urging the Senate to pass the legislation to ensure independence on superannuation fund boards.
The institute’s chief executive, John Brogden, said super fund governance standards must move close to those that already apply to all other Australian Prudential Regulation Authority (APRA) regulated entities, including banks, and insurance companies.
“One argument being used by those opposing this legislation is that industry superannuation funds have generated higher rates of return for their members in comparison to retail funds,” he said.
“However, current investment returns are not the sole litmus test for effective governance nor is it guaranteed that they will continue if current structures are maintained.
“Good governance practices, including board independence, instead provide for the long-term stability, sustainability, transparency, and profitability of an entity.”
