Legislation to ensure independence on the boards of superannuation funds is urgently required so that world-class standards of governance are applied in our $2 trillion retirement savings system.
The legislation is due to be voted on in the Senate this week.
“We urge the Senate to pass the legislation following amendments agreed to last week by the Government. The legislation will ensure that a minimum standard is applied to the composition of superannuation fund boards,” said John Brogden, Managing Director & Chief Executive Officer of the Australian Institute of Company Directors.
“Superannuation fund governance standards must move closer to those that already apply to all other 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. 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,” Mr Brogden said.
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