In November 2013, the Assistant Treasurer released a discussion paper entitled 'Better regulation and governance, enhanced transparency and improved competition in superannuation' for public consultation. The paper is in accordance with the Government's election commitments to improve governance, increase transparency of information provided by super funds, and boost competition and transparency in the selection process of default super funds in modern awards.
The paper has again raised the issue of the ideal composition of superannuation boards with the Government pushing for all such boards to have a majority of independent trustee directors.
Industry superannuation boards have traditionally been comprised of an equal number of employer and employee nominated trustee directors. However, a 2010 review recommended that one third of superannuation boards should be independent directors.
Media reports regarding submissions to the discussion paper indicate that legislative amendments to allow up to a third of industry fund board seats to be held by independent trustee directors is now likely to be supported by industry super funds despite previous opposition to the concept. Difficulties in finding suitably skilled directors has apparently led to the change of stance.
There is also reportedly support for the superannuation industry to adopt the ASX Corporate Governance Principles and Recommendations which, among matters, state that boards should have a majority of independent directors. Compliance with the ASX Principles is not mandated but rather on an 『if not, why not’ basis.
Submissions on the draft paper closed on 12 February 2014..