Independent directors ‘unwarranted’: Chalmers
Speaking against the Superannuation Legislation Amendment (Trustee Governance) Bill 2015, which will demand super fund boards be made up of one third independent directors, new shadow minister for financial services and superannuation, Dr Jim Chalmers, rejected the Government's claim that independent directors would improve performance.
"The bill represents nothing more than a change to our superannuation system, which is badly motivated, ideologically driven and unwarranted," he said.
"The Government has proposed changes which will radically change the face of the Australian superannuation system. There are a few key components of the Government's amendments. Others have dealt with them in detail; I will mention them briefly: one-third of super boards must fit their definition of an ‘independent director'; the chair must be independent; the equal representation requirement has been entirely removed; and they have introduced an ‘if not, why not' disclosure of majority independent directors.
"We will be opposing all of these amendments to the act for these five reasons: one, there is no evidence in favour of independent directors; two, the current representative model is working well, as I said; three, there are governance safeguards in place already; four, the proposed changes are overly prescriptive; and, five, the amendments will cost millions of dollars for fund members.
"When it comes to no evidence for independence, the Government has not been able to stack up the claim that maintaining independent directors on not-for-profit superannuation funds would improve fund performance."
However, Liberal MP for Deakin, Micheal Sukkar, described the opposition's resistance to the legislation as "quite embarrassing".
"What should be an uncontroversial change to our superannuation arrangement is being vehemently opposed by those opposite, because it does not accord with the wishes of their union paymasters," he said.
"All we want to do is improve the governance arrangements for super fund boards to ensure that they meet the highest standards of governance."
AUTHOR
Nicholas O'Donoghue
Recommended for you
The financial services technology firm has officially launched its digital advice and education solution for superannuation funds and other industry players.
The ETF provider has flagged a number of developments as it formally enters the superannuation space through a major acquisition.
While all MySuper products successfully passed the latest performance test, trustee-directed products encountered difficulties.
Iress has appointed Insignia Financial’s former general manager of master trust and insurance products as its newest CEO of superannuation, who will take over from Paul Giles.
