AustralianSuper and HESTA are the first two funds to sign the newly launched Australian Asset Owner Stewardship Code, a set of principles that aims to increase the transparency of asset owners. Hostplus has also committed to sign on to the code by the end of the year.
AustralianSuper chief executive Ian Silk said the principles should form the cornerstone of disclosure for stewardship activities.
“As AustralianSuper continues to grow and our holdings increase, it is vital that the fund maintains a high level of clarity and transparency when it comes to stewardship activities,” Silk said.
Hostplus chief executive David Elia said the code would help his fund raise the bar.
“We applaud [the Australian Council of Superannuation Investors] ACSI for taking the lead in hardwiring stewardship into Australian asset owners’ policies, practices and disclosures,” Elia said. “Increased transparency and accountability of stewardship activity is good for members and their long-term investment returns.”
HESTA chief executive Debby Blakey said the code encouraged the broader adoption of principles that benefit long-term investors.
“We believe effective stewardship not only improves the long-term performance of our members’ investments but also enhances the sustainability of companies and is good for the economy as a whole,” Blakey said.
A higher standard
The new code sets out six principles designed to improve member access to information about shareholder voting, how funds engage with companies and asset managers, and policy advocacy.
ACSI developed the code and launched it at its annual conference in Sydney this month. It is similar to guidelines in other countries, including the UK, US, Hong Kong, Japan, and South Africa.
The code builds on the Australian Prudential Regulation Authority’s existing governance around meeting fiduciary obligations to beneficiaries and is open to all asset owners, including super funds, endowments and sovereign wealth funds, not just ACSI members.
University of Melbourne law professor Ian Ramsay introduced the code at the ACSI conference and said institutional investors could help improve corporate governance globally.
“I would like to congratulate ACSI on this important initiative,” Ramsay said. “Australian asset owners play a fundamental role in our financial markets and it’s good to see them take the lead in setting best practice standards for the disclosure and management of stewardship activities.”
The decision to become a signatory to the code is voluntary and ACSI will maintain an online list of asset owners that have adopted it.