The Governance Institute has called on the government to abandon legislation introducing the requirement for one-third of superannuation fund boards to comprise independent directors.
“The process has become overly politicised to the detriment of genuine governance outcomes,” said the Governance Institute.
In a submission to the Senate Economics Committee, the Governance Institute said the “prescriptive” criteria for director independence will have unintended consequences and will be unlikely to be effective.
Governance Institute chief executive Steven Burrell said that while he supports moves to increase the number of independent directors on super boards, the “blunt club” of legislation is “not the way to do it”.
“We believe a better solution is to take the principles-based approach recommended by the Cooper Review and establish a superannuation industry-led body to collectively develop guidance on governance matters, similar to the ASX Council’s principles and recommendations,” Mr Burrell said.
The Australian Institute of Superannuation Trustees (AIST) also made a submission on the matter, arguing that the imposition of quotas around independent directors would be a “backward step for Australia”.
AIST chief executive Tom Garcia said he was “strongly opposed” to forcing high-performing boards to change their governance framework for “no good reason”.
“These changes are not about genuine reform. This is ideologically driven policy that is not based around evidence and has nothing to do with improving returns for members,” Mr Garcia said.
