Limit super directors to three terms - APRA
Superannuation fund trustee directors should not ordinarily serve more than three terms or around 12 years, according to the Australian Prudential Regulation Authority (APRA).
The superannuation fund regulator has issued a letter to superannuation funds in which it has outlined the results of a consultation process on governance arrangements.
And while steering clear of some of the more controversial elements of the governance debate, the regulator has made clear it expects fund to have a policy in place regarding the maximum tenure of trustee directors.
It said the submissions it had received had been generally supportive of the new requirement for a tenure policy, with some parties requesting that APRA confirm expectations regarding the maximum number of terms a director can be appointed to the Board.
The APRA letter said some submissions had indicated that the maximum tenure for a director should be in the vicinity of nine to 12 years — or no more than three terms.
"APRA considers that appropriate board renewal supports effective governance of Registrable Superannuation Entity (RSE) licensees and their business operations, and this view was supported by submissions," the letter said.
There regulator said it therefore intended to update guidance to "reflect both that boards are expected to consider director's tenure at the end of each term served, and that APRA expects that there would be limited circumstances in which maximum tenure limits exceeding 12 years would be appropriate".
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