POWERED BY MOMENTUM MEDIA
Are super fund boards getting the wrong information?
The members of superannuation fund boards may have lost focus on key strategic issues because they have been overwhelmed by too much information, according to a new Willis Towers Watson analysis.
The analysis, prepared by senior consultant David McNeice, has pointed to the ever-increasing amount of material and reporting from the executive concerning operational, comparative investment analysis and compliance packs, often running to hundreds of pages.
“Technology has been an enabler of excess,” McNeice’s analysis argues. “As meeting papers are delivered to an iPad or similar device, they have become bigger.”
“But this may have contributed to the crowding out of director focus on strategic matters,” he said. “Superannuation, perhaps more so than other financial products, is prone to co-mingling the management and monitoring roles of executives and directors.”
McNeice pointed to the Royal Commissioner, Kenneth Hayne’s comment that “the task of the board is overall superintendence of the company, not its day-to-day management” and the suggestion that boards needed better quality information.
“Boards that get their fund's culture and governance structure correct, such that misconduct cannot easily arise, are adding long-term strategic value to their fund,” his analysis said. “It is just as important, possibly more so, to spend time protecting and nurturing the right behaviours in the executive than spending time analysing quarterly investment performance or administration service standards.”
AUTHOR
Mike Taylor
Recommended for you
In its pre-election policy document, the FSC highlighted 15 priority reforms, with superannuation featuring prominently, urging both major parties to avoid changing super taxes without a comprehensive tax review.
The Grattan Institute has labelled the Australian super system as “too complicated” and has proposed a three-pronged reform strategy to simplify superannuation in retirement.
Super funds delivered a strong 2024 result, with the median growth fund returning 11.4 per cent, driven by strong international sharemarket performance, new data has shown.
Australian Ethical has seen FUM growth of 27 per cent in the financial year to date.
TOP PERFORMING FUNDS
ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
1
Spire Oaktree Opportunities XI Second Close
36.43 3 y p.a(%)
2
Spire Oaktree Opportunities XI First Close USD
35.08 3 y p.a(%)
3
DomaCom Lot 21 Chellaston Road Munno Para West SA 5115 Australia
31.72 3 y p.a(%)
4
Fidante Credit Suisse Global Private Equity
29.60 3 y p.a(%)
5
Global X GlobalX FANG+ ETF
27.64 3 y p.a(%)
