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Good returns does not mean good governance
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."
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Vanguard Super has reported strong returns across most of its investment options, attributed to a “low-cost, index-based approach”.
The fund has achieved double-digit returns amid market volatility, reinforcing the value of long-term investment strategies for its members.
Australian super funds notched a third consecutive year of strong returns, with the median balanced option delivering an estimated 10.1 per cent over the 2024-25 financial year, but an economist has warned that the rally may be harder to sustain as key risks gather pace.
AustralianSuper has reported a 9.52 per cent return for its Balanced super option for the 2024–25 financial year, as markets delivered another year of strong performance despite the complex investing environment.
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