Kirsten Mander, chair of legalsuper, speaks to Alice Uribe and reflects on her first year in the job as she prepares to tackle a challenging 2019.
Q: It’s been a year since you took on the role of chair at legalsuper, what drew you to the role? It’s certainly a controversial time for the super sector, did that contribute to your decision in any way?
A: That was definitely part of my reason for having an interest in a superannuation fund. I’ve got a background in financial services, private health insurance and funds management, but not in superannuation itself. It was pretty clear that there was going to be a lot of change in superannuation, and that change creates a really interesting opportunity to play a role in influencing how that plays out.
This is at the fund level, in helping steer how the fund responds, and at the industry sector level.
Q: You succeeded David Miles, who held the position of chair for 12 years. How has it been, stepping into his shoes?
A: I’ve actually found it relatively seamless. We’re different people, but he’s a very experienced chair and I’m not inexperienced myself as a chair. So while we’ve got very different styles, to some degree, we both operate at a similar level. The role of the chair is to guide and to facilitate, it’s not there to tell people what to do.
We also both come from a legal background originally – mine a bit more on the executive side of things from years in companies – and we’ve both been advantaged because we’ve got a great team at legalsuper. We really do have a great membership base, but the team’s intelligent and they’re hardworking and they’ve got a good culture, so I’ve been able to transition very nicely into the organisation. I really appreciate that.
Q: How would you describe your leadership style?
A: Leadership is about engaging and persuading people to share your vision, so it’s a lot about building consensus around the vision and mission – making sure everyone is sharing and understands the common purpose. That’s part of where it can sometimes go a bit astray as an organisation gets larger and larger, and people get further and further removed from their role in achieving the organisation’s mission and vision.
Q: What sorts of pressures do lawyers face in terms of their retirement needs?
A: Those working in the legal sector are reasonably astute and professional, they’re quite engaged around their superannuation, compared with others. They like to use technology more than others, so we do have an ability to get feedback from them. They like to engage with organisations that are smart and responsive and give them high levels of choice and flexibility when they want it.
They are increasingly coming under pressure with casualisation of the workforce and the future of work, so they’re concerned about that. That means we, too, need to think about how to make superannuation more flexible for people who are in and out of employment.
Q: A number of funds are now using their muscle to push for improved corporate governance. What are your thoughts on this?
A: I think it’s absolutely a good idea. We certainly use our persuasive abilities with funds to argue for better corporate governance, and it comes in very strongly when we do due diligence on new acquisitions or any products coming. Look how successful it’s been with the issue about women on boards in the ASX 200.
Q: Are there any particular areas of governance on which you focus?
A: The board is having conversations about ESG at the moment – how to properly build that into the portfolio and what our stance should be. We have an ESG product and we’re looking at the degree to which we build ESG into other products, along with putting pressure on external parties
to build it into their processes.
Q:How have you reviewed the fund’s approach to investment since you joined the board?
A: We’re looking at our asset allocation at the moment. There are many new asset classes that are becoming available, so we want to see how they fit into the portfolio and what they might mean in terms of returns, but also in terms of reducing volatility, just freeing up our thinking about that.
We will continue to make sure we’ve got quite a sophisticated assessment of risk/reward but that’s not what’s driving it, it’s more a case of trying to think ahead five, 10 years and what will be the things that will generate good returns for our members.
Q: We’ve seen some of your fellow funds investing in big infrastructure projects. What are your thoughts on this asset class?
A: We have some and we’re certainly looking at what other funds are doing but we don’t follow. We focus in on our particular member segment and what we do well. Our future is about being what we are, not trying to be all things to all people.
We have a very clear segment and a very clear focus and it gives us some genuine competitive advantage, but it’s done by focusing on what we’re good at. [It’s about] the flexibility we get with our size and with our membership and our internal capabilities and approach to doing business, and the types of assets we look at, and the linkages we have that enable us to build on those.
Innovation is not about the next shiny new thing, innovation is about identifying, understanding and focusing on the particular areas that are going to add value to your organisation, and how they will play out in the long term.
Q: How important is culture to an organisation?
A: I strongly believe in the power of culture. But I do think that organisations like banks – I’ve worked in large organisations – trying to change them
is like steering the Queen Mary.
Q: What are your priorities for 2019 – for the fund and for you personally?
A: We’ve got a great existing leadership culture at legalsuper, I’m keen to see that continue and enhance, get more sophisticated around risk-reward and how we approach that. Associated with that, I’m keen to deepen and improve our management information at a board level, the board members’ ability to be effective is substantially based on the information they get so it’s both useful for the business and useful for the board to get clearer about what does and doesn’t matter in the business, what moves the dial and what’s happening.
So that’s improving the information that’s flowing up, enabling good decisions to be made. I see boards and executive teams having this discussion all the time and the board says, “Please, you’ve given us 500 pages, only give us the important stuff,” and management says, “Well, what do you see as the important stuff?” And then the board says, “I don’t know, shouldn’t you tell us that?” You see this ping-pong thing.
Ten years ago, we all did strategic planning. Today, everyone reckons there’s no such thing, so much is changing. But it can’t be like that in our industry so you’ve got to form some views about where these major, seismic changes are going to go.
Q: What are the seismic changes that you see, from a regulatory perspective?
A: There is an increasing desire from government and regulators to maintain higher levels of scrutiny and control over the business and to impose more and more requirements around business operation.
As people are getting older, there are more and more challenges with co-morbidity, with people not necessarily living healthier lives…so there are some real costs around that. Our whole superannuation system and what place it has in our economy is a really interesting question. Australian people are among the most affluent people in the world but that’s significantly based on superannuation balances and the value of housing.