In a submission to the Fraser Review into the governance of industry super funds, the Governance Institute has called for members to be given the right to elect their trustee directors.
Governance Institute chief executive Steven Burrell said the debates about director independence when it comes to superannuation could be resolved if members were “simply granted the right to elect directors of their choice”.
“There can then be no dispute about ‘independence’ because the members themselves have chosen the directors they believe will represent their best interests.
“Good fund governance starts with the basic principle that members must have a voice. Yet at the moment, members of most funds have no say in who represents their interests. That is currently decided by third parties,” he said.
Members of other not-for-profit organisations have long had the ability to vote in directors of their choice, and to hold them accountable with their voting power, Mr Burrell said.
“There’s no reason why not-for-profit super fund members should not have the same rights in view of the growing size and importance of the retirement savings industry,” he said.
“With Australian superannuation now comprising the fourth largest pool of savings in the world and rising, members have a significant financial interest in their funds and every reason to be engaged in their investment.
“If, as the announcement of the Fraser Review rightly points out, a key distinguishing feature of not-for-profit funds is ‘the over-riding primacy of members’ interests’, there can be no basis for continuing to deny fund members the right to vote directly for directors they believe will act in their best interests,” Mr Burrell said.
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