Steve Bracks will be stepping down from his role as chair of Cbus to take up the position of Australia’s consul general in New York in September for a three-year term.
Bracks was brought in as a director and chair for the $22-billion fund just under four years ago, with Cbus experiencing significant change and growth since, including expansion of its inhouse investment team and a merger with Connect.
However, while Bracks said the fund has reached most of its objectives, he would have liked the superannuation fund to have taken on more mergers before his departure.
“I think it’s very difficult for an organisation to recognise that it can do better by merging and can offer a better value-for-money proposition to its members,” he told Investment Magazine online.
“I think the case has to be put and we’re putting that case, but obviously there are some long-term practices and entrenched views, which sometimes you have to work patiently with to change. And that’s probably the area that I would’ve liked to have been more advanced on.”
Part of Cbus’ strategic plan going forward is to grow the fund further through merger opportunities, as well as extend its membership within the building and construction sector to bring in more members – namely, the 30 to 40 per cent of people who are in retail or other funds.
“We think we can make a good offer to them – white-collar workers, other engineering services – and we think we can make a good play on that too; and that’s certainly where we’re heading.”
The fund is currently investigating potential mergers with several other industry funds, but Bracks says it’s all in the early stages so can’t disclose more information. However, he is clear on the characteristics the fund is looking for in merger opportunities.
“Our strategy is to cover the whole of the building and construction industry; we cover the majority of it, but [want] to cover the lot. Secondly, to look at expanding into like-minded areas, so it has to have a relationship with building construction more broadly, but not in other indirect ways.”
Bracks praised the super fund’s board and executive team led by chief executive David Atkin.
“We’ve brought in better investment advice support into our fund and taking some of that expertise in house. We’ve got better tax expertise now, which has saved us a considerable amount of money. We’ve been in the top quartile of returns to members of all the superannuation funds, and we’re still on a 25-year average of something like 9.5-to-10-per-cent return.
“It’s a good fund, it’s a well run fund, and I was very privileged and pleased to be able to chair it for the period that I have.”
During his time as chair, Bracks has also acted as a director of Cbus Property, and said his previous experience in politics was useful in enabling the executive team to reach their full potential.
Under Bracks’ leadership, Cbus has increased its transparency, with full disclosure of all senior and executive salaries, as well as greater disclosure in its annual report and stakeholder engagements.
“There’s always resistance when you’re changing things, and people are used to a way of operating. People were nervous about disclosing salary levels and director-fee levels, but there’s none of that nervousness anymore. People can see that this is a significant net benefit in being accountable.”
Bracks said the board of 15 directors is currently in a process of selection for a new chair.