Despite the strong objections of Labor members, a majority of the Senate Economics Committee has backed the Government’s proposed changes to superannuation fund governance and recommended its passage through the Senate.
This comes despite the Labor members of that committee issuing a dissenting report that “the bill is seeking to impose a significant ideological shift from a model of trustee governance to a model of shareholder governance”.
The report of the Senate Economics Legislation Committee on the Superannuation Legislation Amendment (Trustee Governance) Bill 2015 [Provisions] saw four Government Senators join with South Australian independent, Senator Nick Xenophon to sign off on the broad thrust of the changes.
That left the only dissenting voices being that of Labor Senator’s Sam Dastyari and Chris Ketter.
Explaining its support for the passage of the legislation, the majority committee report stated: “The committee is of the view that the bill contains provisions designed to ensure that superannuation funds have the flexibility to select independent directors who have the relevant skillset to aid fund performance, and which brings governance of regulated superannuation funds in line with international best practice standards of corporate governance”.
The committee report said the legislation would allow superannuation fund boards to draw from a broader pool of independent directors, increasing diversity and while, noting concerns about unintended consequences relating to representation of members’ interests and added costs, said it believed that the bill contained mechanisms to address these risks.
In their dissenting report, Dastyari and Ketter said the most concerning aspect of the bill was that it “blindly conflates and confuses trustee governance with shareholder governance, rather than contrasting the two”.
