$2 trillion is a lot of money - that is the total of our retirement nest eggs that is held by large super funds. Despite how important this source of funding will play in supporting our economy as the population ages, somehow the compulsory standards of governance for large super funds is less than what is required by ASX-listed companies.
Many fund trustees voluntarily apply much higher governance standards in any case and experience the benefits that independent and diverse views bring to the table. Surely it is time to get the laggards to raise the bar.
The more this much needed reform gets painted as union-bashing, the greater the risk that people will miss the point and superannuation funds will be put at risk.
Under the proposed laws, super funds will be required to have an independent chairman, and independent directors will need to comprise at least a third of a fund's board.The Government's key target is known to be union-backed industry superannuation funds, but the proposed changes will also apply to retail, corporate and public sector funds now managing $2 trillion in retirement nest eggs.Funds will also be required to detail in their annual reports whether they have a majority of independent directors on an "if not, why not" basis under similar rules that apply to ASX-listed companies.