Independent directors do drive better outcomes
The number of independent directors on superannuation fund boards may have a discernible impact on their investment performance, according to the Australian Prudential Regulation Authority (APRA).
The regulator has revealed “preliminary analysis” which it says suggests there is a correlation between the make-up of boards and the returns generated by the superannuation funds.
Addressing the Association of Superannuation Funds of Australia conference in Sydney, APRA deputy chair, Helen Rowell said APRA’s “preliminary analysis of outcomes across the industry using a wide range of metrics suggests there may be some correlation between enhanced member outcomes and board composition”.
“The trustees with outcomes at the better end of the industry, on average, appear to be those that have appointed independent or non-affiliated directors,” she said.
Rowell said this was consistent for funds with and without equal representation, across measures of investment performance, fees and costs, and sustainability metrics such as net cash flows.
Recommended for you
Financial Services Council chief executive, Blake Briggs, is urging Minister for Financial Services, Stephen Jones, to take advantage of the QAR opportunity to reduce regulatory duplication and ensure advice is affordable.
Former chair of the House of Representatives’ Standing Economics Committee, Tim Wilson, is planning a return to politics after losing his seat in the 2022 federal election.
Morningstar is going to offer research ratings of funds in the $3.5 trillion superannuation sector for the first time in response to demand from financial advisers.
Treasurer Jim Chalmers has opened a consultation into the design of the annual superannuation performance test, canvassing views on a range of reform options.