While director independence is an admirable goal, there is far more to good decision-making than that, argues Mercer in a new report.
A new report by Mercer argues Australian super funds should include a number of independent directors – but not at the expense of member representation.
The report comes as the government prepares its response to the Financial System Inquiry recommendation that independent directors be mandated on super fund boards.
Mercer Governance Practice Solutions partner Pam McAlister said: “Structural board independence alone doesn’t bring about better decision-making, but adding independent directors will enhance diversity of opinion and allow for a broader range of skills and expertise on trustee boards.”
“However, in our experience, the collective skill set, objective judgement and dynamics of a trustee board are just as important to effective decision-making as structural independence.”
The report pointed out that globally, there is a trend towards the prescription of minimum qualifications for directors.
“It is a different world today for trustee boards in Australia, they are held to a professional standard of care and diligence and expertise in investment, governance, risk management, remuneration, insurance and marketing, along with interpersonal skills to enable a diverse group of people to work seamlessly and collaboratively,” Ms McAlister said.
“The challenge for super funds will be to source independent directors that complement their existing board culture, without growing them to an unwieldy size,” she said.
Retail industry superannuation fund REST has faced charges from one of its members that it has not protected his money from climate change, ...
APRA has doubled down on its efforts to improve the superannuation sector and will force poor performing funds out of the industry if they ...
HSBC Global Asset Management and First State Super have entered into a global equities partnership. ...