Superannuation trustees ought to hold themselves to the same standards of governance that they demand of the companies they invest in, according to Equipsuper chief executive Danielle Press.
Speaking at the 2011 Association of Superannuation Funds of Australia conference yesterday, Press said trustee boards should be taking their lead from the ASX Principles of Good Corporate Governance as a minimum.
“There’s a huge amount of hypocrisy in this industry, where we sit back and we criticise the corporates we invest in or are going to invest in, for poor governance and poor standards and poor disclosure,” Press said.
Trustee governance would also vary from fund to fund, with the size and complexity of the entity determining what was appropriate, Press said. Implementing adequate levels of governance would not be easy, but that should not deter trustees from doing the right thing, she added.
The recently released proposed Australian Prudential Regulation Authority (APRA) standards for superannuation trustees will form the basis for a governance framework over the next 12 to 18 months, Press said.
“APRA is likely to take an ‘if not, why not?’ approach to these things, so we’re all going to have to formulate our reasons and our decisions,” she said.
The onus will be on trustees to explain, for example, why they have not chosen to include an independent director on their board. Similarly, trustees will have to explain to APRA why they think it is reasonable for one of their directors to sit on two boards at once, she said.
Trustees would likely find the new levels of disclosure around director remuneration, conflicts of interest and conflicts of duty confronting, Press added.
“It means that the bonnet’s been lifted and people are actually looking in to what we’re doing. But you know what? We’re fiduciary trusts. We have obligations to our members,” she said.
