At AIST we are the first to point out the increased burdens, fiduciary and administrative, that arise from the never-ending introduction of new regulations.
We support calls for more trustee training, and for formal recognition of ongoing training because we know that trustees find specific training helpful. On many occasions, we have suggested to government that it join with us in trustee education activities.
Despite all this pressure, I would say that the representative trustee system — trustee boards comprised of equal representation of employers and employees — should be maintained. These kind of boards run the not-for-profit government, industry and corporate funds, and have an outstanding track record. Whether we are measuring returns to members, cost control, or compliance with SIS, representative trustee funds have done extremely well. There have been no collapses and no major problems.
In contrast, Commercial Nominees, run by a professional trustee, went under and has left its many members stranded.
With large and complex not for profit funds, the appointment of an independent trustee director has been an effective way of reinforcing the strengths of the representative trustee system.
Susan Ryan — Australian Institute of Superannuation Trustees (AIST), president
Australia’s equal representative trustee structure represents world’s best practice in providing a structure for managing people’s accumulated retirement savings. It provides cost effectiveness, greatest transparency and membership accountability. It has delivered high levels of prudent control.
The introduction of professional trustees would rupture the measure of trust that currently exists and provides the greatest safeguard against malfeasance and fraud, and which has largely protected the superannuation sector from the corporate excesses of recent years.
It is difficult for trustees, who take on their responsibilities in addition to their usual full-time occupations, to necessarily come to the job with skills in overseeing experts, assessing multi-dimensional financial risks and making decisions under uncertainty that have long-term consequences. It is absolutely essential that they are able to take the time and training to develop their expertise.
But representative trustees have perhaps the most important asset for the funds and for the members. They are unquestionably acting in the interests of the members, not in furthering their own personal financial advantage.
Diana Olsberg — UniSuper, employee elected representative trustee
Research by our fund indicates that members’ confidence in Sara Lee Super is underpinned by their vote and ability to elect half the board. Member elected trustee directors have a day-to-day contact with the members. Members like that.
My experience of what some public figures call ‘amateur trustees’ is that they are prudent, intelligent and conscientious. They know their limitations and therefore employ experts to give them advice. Maybe their formal education does not include a degree but I have found their contribution has not been diminished by that. Trustee training and a few meetings give all trustee directors confidence and knowledge to fulfil their role.
Would ‘professional trustees’ do a better job? I suspect the majority would be employed by accounting firms, fund administrators, consulting actuaries or some interest groups. Then who’s interest would they be serving — members of Sara Lee Super or the professional trustee’s employer?
Chris Keys — Sara Lee Super,
Superannuation and share plan manager
Whether every trustee needs to be a professional is debatable, but I personally believe that each board should contain at least one member who holds some form of professional qualification. Whether the trustee has a solid background in finance, commerce or law, their professional input should bring a sense of realism and balance to any board they participate in.
Boards, however, should not lose the benefit of industry participants as a result. The input from members needs to be heard and respected. Never forget to whom you serve on the board.
Bob Lette – BUSSQ, chairman
