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(December-2003) The man who keeps the corporates honest
One of the biggest themes over the past 12 months, according to our panel, has been corporate governance and it is here that Steve Gibbs stood out. One panel member says he has “taken corporate governance an extra step further”.
Not only has he introduced pioneering governance practices at his funds, but Gibbs has spoken widely on the topic and has played a key role representing the Committee of the Australian Council of Superannuation Investors on the ASX Corporate Governance Council.
Gibbs says his involvement in governance goes back to “almost the first day” he joined PSS/CSS in February 2000. After examining a host of social responsibility issues, he says the PSS/CSS boards concluded that these issues are just forms of investment risk that need to be managed similarly to other important risks.
This led to PSS/CSS starting a governance overlay program which now falls under the BT Financial Group. So far, this program has identified and publicly highlighted governance issues, in Australia’s S&P/ASX200, in the areas of auditing, environmental disclosure, workplace health and safety, energy use and executive remuneration.
In recognition of the work done, the PSS/CSS-BT Governance Advisory Service was recently one of only three recipients world-wide to be given a prestigious first tier United Nations Royal Award for Responsible Investment.
So far, two other super funds have joined this service but Gibbs hopes to attract more “so that when we engage companies, we engage them with much more weight”.
Additions to PSS/CSS’s own governance practices include a decision not to leave proxy voting in the hands of investment managers. Instead, the boards vote on every issue concerning a company PSS/CSS has invested in and never abstains.
Perhaps uniquely, the boards have also established their own governance committees which examine both the governance of companies that the funds invest in and PSS/CSS’s own internal governance.
Believing that it’s important to make a contribution through industry bodies, Gibbs is a CMSF director, a member of ASFA’s ACT Division Committee and a member of the Australian Institute of Company Directors (ACT Division).
For Gibbs, the UN award, being named the FEAL’s Fund Executive of the Year for 2003 and most importantly, a return to the black in PSS/CSS’s results have rounded off “a pretty hectic but pretty satisfactory year”.
With plenty still to keep him busy — including getting the structures in place for PSS to start a new accumulation fund on July 1, 2005 — Gibbs doesn’t have much spare time. Weekends, however, are spent watching his two sons’ sporting activities and sometimes fitting in a game of golf.
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