However in the case of super funds “you just don’t know”. Furthermore, once-a-year reporting only exacerbated members’ ignorance, Gallery added. The chair of the Australian Accounting Standards Board, Professor David Boymal, agrees accounting standards for super funds are not up to scratch. He points out it is not up to the AASB to enforce better governance, but he recognises the overlap: “Where does governance start and accounting stop?” he says.

Boymal says it’s a fair question to ask if super funds can be compared to a listed public company in terms of what their financial disclosure obligations should be. “The point is now that the funds have got so large, and with the idea of some of these master funds amalgamating, there probably is an argument for some of these enormous funds to be compared with public companies,” he says. In his personal view, he dismisses the argument that more disclosure will be useless to members. “We do need to discuss what is meaningful disclosure for super funds. It’s true that not enough people read the audited annual report, and a typical super fund member wouldn’t understand it in any event – they’re more interested in what they’ve sunk into it and that’s about it. “But what we’re talking about here is what the total looks like, about trustees fulfilling their trustee obligations. The individual member may not be interested but that doesn’t mean the trustee doesn’t have a responsibility to account for how they’ve run the show.”

Boymal recognises that super funds are audited and regulated – although he remarks as an aside that their accounts are not as good or as detailed as those of listed companies – but he is concerned that this information is not more publicly available. “Yes, they are [audited]. But they don’t put that information on the public record. In other words, they don’t see themselves as publicly accountable. This is a real issue. Any organisation taking money from the public has to be accountable to that public,” he says. Accounting standards and disclosure needs to be such that not only is the member informed of their own position but they can fairly compare that across other funds, Boymal says, but the current standards and loose definitions render this difficult.

This is a point Gallery has also made. The AASB has been reviewing the accounting standard AAS 25 Financial Reporting by Superannuation Plans for some time now, and an exposure draft is expected in July this year, according to Boymal. Shareholder activist Stephen Mayne suggests that more frequent disclosure may actually lead to more member engagement anyway, removing the ‘members-aren’t-interested-so-why-disclose?’ argument. “I get the sense that the level of engagement with fund members is pretty poor. And they’re a thoroughly disengaged group of constituents – they don’t understand, they’re not interested, they’re not being engaged, and everyone seems to be doing the bare minimum.

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