Superannuation fund trustees have again been placed on notice by the Australian Prudential Regulation Authority (APRA) to address the composition of their boards.
The regulator has written to the superannuation fund boards urging them “to examine whether their board has the optimum mix of skills, capabilities and experience needed to effectively carry out its responsibilities”.
In doing so, APRA outlined the findings of its thematic review into board governance practices in the industry which covered 29 licensees of various types, sizes, ownership models and board structures.
Based on the findings of the thematic review, APRA issued a range of recommendations, including that superannuation fund (RSE) licensees should:
Commenting on the letter sent to superannuation funds, APRA deputy chairman, Helen Rowell said robust governance practices were vital to support sound decision-making and safeguard the best interests of superannuation members.
“The standard of RSE governance is improving, but boards have more work to do,” she said. “The recommendations in this review provide a clear guide to industry better practice that licensees can review their governance arrangements against, and identify areas for improvement.”
Rowell said that meeting the minimum requirements of APRA’s prudential framework was not enough.
“APRA continues to encourage RSE licensees to change their mindset from one of legal compliance to aiming to deliver the best possible outcomes for their members,” she said.
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