FSC sets high bar on superannuation corporate governance
The Financial Services Council (FSC) has moved ahead of both the Government and the regulators by having its members sign up to a set of corporate governance standards for superannuation funds which effectively preclude multiple fund directorships and other conflicts of interest.
The corporate governance standards, released today, come at the same time as many financial services commentators remain critical of practices within some industry superannuation funds, particularly multiple directorships and the non-disclosure of executive remuneration.
The new standards will apply to all the major financial services companies belonging to the FSC.
Commenting on the standards, FSC chief executive John Brogden said raising the standards of governance and transparency in superannuation was long overdue.
He said the new policy would require member companies of the FSC from the retail and corporate superannuation sectors to meet the highest standards of transparency and governance in the way they operated their superannuation funds.
Brogden said the new standards went above and beyond what was required by law, and that while the FSC supported Australian Prudential Regulation Authority (APRA) proposals to further align corporate governance standards in superannuation with banking and general insurance, the FSC's new standards went even further.
"Superannuation funds should meet the same standards they expect of the companies in which they invest," he said.
The new FSC standards are intended to apply from 1 July next year, the same time at which MySuper and APRA's new standards are expected to apply.
The new FSC standards demand of member companies that their superannuation funds have an independent chair, that the majority of directors are independent, that remuneration of directors and senior management be disclosed, that multiple directorships not be held, that funds develop environmental, social and governance risk management policies, and that they publicly disclose a proxy voting policy.
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