None of those outcomes exist in the industry fund sector. There is, overwhelmingly, very good outcomes for industry fund members under the current arrangements,” he says. Silk also points out that super fund directors are required to meet certain criteria – the ‘fit and proper’ provisions of the SIS Act – whereas public company directors do not have to jump any such hurdles.
Silk admits it’s easy to say elections don’t matter when you don’t have them, but rejects that they should be introduced to super funds just because people feel more comfortable with that process. “On this whole issue [of transparency and accountability], we have given it a lot of thought,” he says. “We have sought to introduce as many mechanisms as we can to make greater transparency and accountability a reality.” AustralianSuper has established a quasi annual general meeting each year where all members are invited to attend, along with those who might be interested in joining the fund. All directors attend the forum, which is “run in very similar format to an AGM”, Silk says. It is held in two different states in Australia each year, and is live webcast.
Questions can be sent through webcast or taken from the floor. “This is the ultimate form of accountability: members are able to eyeball their directors, ask them questions, and also discuss concerns with them over a cup of coffee before and after the forum,” Silk says. “We’ve got a lot of terrific feedback through the forum and acted on it.” As for the merger of STA and ARF to form AustralianSuper in June 2006, Silk says members were informed prior to the fact and were asked for feedback.
Again, a vote on the merger from members was not conducted because, apart from not being a regulatory requirement, it would have been too expensive, Silk says. He adds that the board of an industry super fund may have different motives from that of a retail fund, which like public company boards has shareholders on its horizon. “The board is set up to act in the interests of members,” he says.
“The whole board of both [funds behind the AustralianSuper merger] acted in what they saw as the best interest of the members because they had no other reason to act,” he says. “On a commercial [super fund] board, directors may have – they shouldn’t have, but they may have – other interests in mind. [Industry fund] boards have a single focus in mind.”