ASFA concerned about director remuneration models
The remuneration of superannuation fund directors should be publicly disclosed, according to the Association of Superannuation Funds of Australia (ASFA).
In its submission to a discussion paper released by the Australian Prudential Regulation Authority (APRA), ASFA noted this requirement should not focus on the person's total remuneration, but rather on the component which pays them for carrying out their duties as a trustee director.
In September 2011, APRA proposed a requirement for all Responsible Superannuation Entity (RSE) licensees to establish and maintain a Board Remuneration Committee, which would put in place a remuneration policy.
This Board would help trustee directors avoid conflicts of interests and so-called misalignments of duties.
"Our concern is that, unless directors of trustee boards are remunerated for being a trustee, then where they are appointed by virtue of a relationship between their employer and the RSE licensee, they will have conflicting priorities and will not be in a position to act with the required independence of mind," ASFA stated.
ASFA said an effective remuneration policy should free up directors to maintain the necessary independence of mind when acting as the trustee in order to regard the best interests of members of the fund concerned.
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