The governance of Cbus is to face an unprecedented level of public scrutiny after its decision to allow Graeme Samuel, the previous chair of the Australian Consumer and Competition Commission to conduct an independent review into its governance processes.
The review is designed to assure contributing employers and members of the strength of its governance and privacy policy, though it will also obligate the trustees to act on its recommendations which are likely to be made public.
The review will also serve as a response to accusations made in a damning 78 page report on the fund published by the Royal Commission into Trade Union Governance and Corruption on Friday.
In the report, Jeremy Stoljar, the counsel assisting the commission, described the management and operational level at Cbus as being “infected by the separate private interests of the CFMEU, and a deep seated loyalty to those interests”. He also described its board composition as “so divided in interests and agendas, [it] poses particular challenges in a modern corporate governance environment”.
David Atkin, chief executive of Cbus, has already apologised for the breach of privacy that led to members details being leaked to the NSW CFMEU branch, the issue at heart of Stoljar’s report.
The fund will make its own reply to the commission’s report within two weeks.
While the Graeme Samuel review will open itself up to the level of scrutiny normally associated with leading ASX companies, said leading superannuation lawyer, Scott Charaneka of Thomson Geer.
“The board is taking a front foot approach in informing the market it will conduct the review, as it will then be accountable for what the findings are,” said Charaneka. “Certainly, you would expect it will report back to the market about what it intends to do about the findings.”
He added: “If one was being generous one could say they are looking to raise the bar in terms of governance, but they have also potentially created a rod for their own back.”
Charaneka said that depending on the instructions generated by the board, the review may extend beyond what could be required technically under the Privacy Act.
In announcing the independent review on Friday, Steve Bracks, the chair of the fund, said it was important that Cbus has the confidence of its sponsoring organisations and members over how it manages personal information, whilst being able to continue to discharge its responsibility to pursue unpaid superannuation – a reference to its dispute with Lis-Con, the building firm also targeted by CFMEU.
“This has been an unacceptable privacy breach, and the board is determined to have a completely rigorous policy and total confidence regarding the fund’s future governance in the management of information,” said Bracks.
He described Samuel’s experience as being “invaluable in assisting the fund going forward”. Samuel will be joined by a second person to work on the review, the full terms of which will be announced later this week.
“This event will ensure that Cbus has a rigorous privacy policy going forward, in addition to the outstanding governance and disclosure initiatives already undertaken by Cbus as an industry leader,” Bracks said.
