Angela Emslie, a trustee on four super fund boards – Hesta, VicSuper, Care Super, and Vision Super – was asked at the conference how she viewed her situation. She told conference delegates it was really up to individual boards to look at what was important to them. “One size doesn’t fit all,” she said. If a fund so desired, Emslie added, it could exclude a director simply because he or she sat on the board of another fund – such as Hesta’s exclusion of Health Super. In Emslie’s case, she explained that an employer-sponsor common to all four funds – the Victorian Employers’ Chamber of Commerce and Industry – had wanted to consolidate its board positions, and so had eventually placed the one person on all four boards.
Emslie pointed out there were benefits, such as the multiplying effect of the trustee education she received. “I would ask everyone just how much of a problem is it? And where is the evidence to suggest that it is a problem?” Emslie said at the AIST conference. But would members nominate or vote for a director if they knew that director was already on another fund’s board? Given that super funds by and large do not allow members to vote on directorships, it’s a purely hypothetical question.
Byrne says voting for directors is not necessary for super funds, unlike public companies, because the boards exist for different purposes. Some super funds have elections, or a form of member input – such as UniSuper with its electoral college – but the necessity of such input is not the same for all funds. Besides, Byrne points out, a democratic vote from each member would be very costly. “Each super fund establishes itself with its various constituencies represented on the board. While some funds may not ask every member what their vote is, there are nevertheless established mechanisms to ensure they are represented,” Byrne says. “You also have to consider if your process is not only effective, but also efficient. [Voting] is an incredibly expensive process.”
Silk agrees that voting for directors would not be worth the cost and asks for evidence that the outcome would be better if elections were more practised. “It is a costly exercise, and for what benefit? This is what you’ve got to come back to. People may say: there are no elections for directors. There are no elections, therefore what? Is it poor governance? Poor performance? Poor service for members?