Despite being a growing reservoir of funds under management, this critically important pool of capital is confronting mounting problems collating and disseminating key data in a timely manner.
The ratings house is pinning its growth strategy on a revamped methodology that increases the emphasis on governance to 25 per cent – a timely move considering APRA’s proposed reforms.
Less than 10% of funds fill 120 ‘independent’ seats
Debbie Wilkes
There are 120 board vacancies from next year among Australia’s largest super funds, according to upcoming research by Industry Moves. Only five of the 59 not-for-profit funds with more than $1 billion in assets have the required independent quota filled.
Preliminary figures from Industry Moves last week show that only 56 of the current 536 directors on big super fund boards are classified (self-classified at this stage) as ‘independent’. If the Government’s and APRA’s proposed one-third rule comes into force as planned from next July, another 120 spots will have to be filled.
According to other research, including that by Industry Super Network, the total number of new independent directors required, when smaller and for-profit funds are included, could be as many as 375.
Debbie Wilkes, director of Industry Moves, said the figures for bigger funds represented a part of a larger updated report her firm was working on looking at various aspects of board make-up for super funds.
“This is a really interesting area of growing importance,” she said. “There are several angles to the story as well as the independence of board members, including diversity of age, gender, ethnicity, time spent on boards and the skills that directors bring and whether you should be on what some people might think are competing boards.”
Wilkes said that her firm’s research on gender diversity had highlighted the fact that overall statistics could be misleading and it was important to drill down to the individual funds to get the full picture.
“For example,” she said, “Louise Davidson of ACSI recently said of ACSI’s membership that, between them, they have an average of 29.5 per cent of women on their boards. She stated that they were well on track to meet that 30 per cent target by the end of 2017. Â This number is skewed when you consider the fact that one of the ACSI membership funds, TWU Super, has zero women on its board and another, HESTA, has two-thirds.
“Our research has shown that of the 38 largest industry funds surveyed, 39 per cent still have 20 per cent or fewer female representation. And this includes Australia’s largest industry super fund [AustralianSuper].”
Further research at Industry Moves
