Government firms super fund governance changes
With the Assistant Treasurer, Josh Frydenberg having signalled the Government will not be softening its approach to changing superannuation fund governance arrangements, the latest Australian Prudential Regulation Authority (APRA) analysis has pointed to some super funds falling well short of expectations.
Frydenberg told last week's Financial Services Council annual conference that the governance changes had received broad support from the sector and he denied that they were aimed at any particular segment such as industry funds.
At the same time, the latest APRA Insight publication has pointed to continuing governance shortfalls within the superannuation industry, noting variability in standards and practices.
It said that, of particular concern. "were instances where it was evident that multiple directorships of registrable superannuation entity (RSE) licensees were either not identified as a relevant interest or relevant duty, or were identified but not considered by the RSE licensee, or the particular director with the multiple directorships, to give rise to an actual or potential conflict".
"APRA has previously indicated that the board of an RSE licensee is expected to assess the extent to which multiple directorships involve, or could be perceived to involve, conflicts and be able to demonstrate how the best interests of beneficiaries remain at the forefront of decisions being made by directors holding multiple positions," the APRA publication said.
The Government has closed the consultation period around the exposure draft legislation covering its governance changes to superannuation fund boards and will be sticking to its formula of at least one third independent directors plus an independent chair.
Frydenberg last week sought to debunk industry fund claims that the changes would erode equal representation on industry funds, saying the draft legislation did not refer to the composition of the remaining two-thirds of board members; "leaving capacity for boards to split these directors between member and employer representatives; if they consider this to be appropriate".
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