ASFA rejects multiple super fund directorships
The Association of Superannuation Funds of Australia (ASFA) has drawn a line in the sand on people holding multiple superannuation fund trustee directorships, arguing that there should be “a ban on multiple trustee board directorships in certain circumstances”.
In a submission responding to a Treasury discussion paper on superannuation fund governance, ASFA chief executive Pauline Vamos has clearly outlined her organisation’s independent stance on the issue and its concern that holding of multiple trustee directorships can given rise to conflicts of interest.
The ASFA submission goes much further on the question than organisations representing industry funds.
The submission said it was not uncommon for one individual to be a director on more than one superannuation fund trustee board.
“There are also situations where a professional trustee company, with the same board (composed of the same directors), acts as the trustee for multiple funds, often including public offer funds that may be competing in the same space,” it said. “Such situations lead to the potential for conflicts of interest or conflicts of duty to arise.
“Our view is that, with the exception of closed defined benefit corporate funds and related funds, an individual should not be allowed to be a trustee or director on more than one APRA-regulated superannuation fund trustee,” the submission said.
“In particular, ASFA considers that:
- An individual who is on more than one trustee board cannot properly fulfil their fiduciary duties to the beneficiaries of each fund simultaneously.
- The presence of that individual on multiple trustee boards would be likely to compromise discussion at board level to some extent. That is, their presence would impact on the ability or willingness of other board members to discuss issues which may be commercially sensitive or involving proprietary information.
- Despite the fact that multiple trustee board memberships do occur at present, the negative perception that arises as result of the conflicts which arise from this is unacceptable. This negative perception is not just limited to the funds in question. It has the potential to detrimentally affect the reputation of the entire industry, particularly the public’s perception of the industry’s governance practices.”
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