David Leggo, chair of corporate super fund TelstraSuper, talks to Amanda White the power that comes from cultivating a loyal membership.
Q: You have been a chair of TelstraSuper since 2010, what do you think are the benefits of that continuity to the board and its decision-making?
A: A big benefit is simply the understanding of our corporate history and how we evolved to become the fund we are today. This allows for continuity of decision-making and facilitates long-term thinking. I’ve benefited from the ability to truly focus on the long term, which has allowed me to gain a solid understanding of what our members need. Whilst every fund changes directors over time, continuity of tenure has given me the opportunity to truly get to know the directors and their skill sets and experience
This, in turn, allows us to ensure we have all the relevant skills at the table, and plan future board appointments according to the formal principles we have in place. As chair of the investment committee since 2010, I do think there are significant benefits in the investments space – particularly in seeing through our long-term investment strategies.
Q: As one of only a handful of corporate super funds left in Australia, what do you believe is your core offering to members and how are they best served by a corporate fund?
A: We know our membership extremely well and they see us as their super fund. We also have close relationships with our key employers in the Telstra family and we learn valuable insights from them. There are many subtle differences among Telstra Group employees; we have everyone from office workers in Melbourne to technicians installing cable in outback Australia as our members. These insights and close relationships allow us to implement tailored services.
For example, we are currently running a member education program directly through Telstra Corporation – it is specifically built for Telstra around the topics its staff wishes to learn about. Many of our members have also now left employment with Telstra but happily remain with us through to retirement, where they then take up the many advantages of our retirement products. Our ability to know our members and tailor our services to meet their particular needs is a key advantage.
Q: What is your view of all the legislative changes and tinkering to super? How has it impacted your fund?
A: We’re always ready for a level of legislative change and, while we’re supportive of changes to improve the system, we’re also very aware that, ultimately, members wear the cost of regulations, so we need to find the right balance. Transparency and good governance are vital, but so is effective communication to members so they don’t feel disillusioned with the system.
Legislative and regulatory change are quite often complex and additional to our normal business plan activity, so it’s vital that funds are given appropriate time to implement these changes. TelstraSuper will always advocate for what’s best for our membership.
Q: What is the most important conversation you will be having around the board table in 2019?
A: Perhaps surprisingly, I do not think the royal commission and Productivity Commission reports will be the topics of the only important discussions we have at our board table this coming year. Their content and recommendations will clearly inform and direct a part of our strategic thinking; however, we can’t be distracted from our long-term strategy. We’ll be spending time enhancing and refining our medium-term and long-term strategies, looking for further opportunity to progress and enhance the operation of the fund.
The board has been very conscious of ensuring we consider the fund’s likely position in the medium and long term, and of making decisions today that will also enhance the operation in 10 years’ time. Key elements of this discussion will include digital services, financial planning, investment management and even comprehensive income products for retirement (CIPRs) should they look like eventuating. The fund has been in operation for 29 years, as of this year, and even with over $20 billion in funds under management and around 100,000 members, we are continuously working to improve the operations and services we provide to members.
Q: How would you describe your relationship with chief executive Chris Davies, CIO Graeme Miller and the rest of the executive team?
A: I feel I have strong working relationships with Chris Davies and the team at the fund. We have an open and honest relationship and catch up regularly, which allows us to focus on diverse aspects of the fund. I believe culture is set from the top down and the TelstraSuper executive team consistently sets a strong members first culture for the business. This is a critical factor for the success of the fund and ensures our members are at the centre of everything we do.
In my case, I also chair the investment committee and the financial planning board, which gives me further opportunities to engage with and have exposure to a wider group of Chris’s senior staff.
Q: What is your best piece of advice for how to chair a constructive board meeting?
A: It’s most important to recognise the value of diversity of thought and opinion and find ways to bring out the best in each director. While diversity may seem like a buzzword today, what is critical is that we cover a spectrum of different points of view to make truly informed decisions. You need to be encouraging and diplomatic and facilitate the conversation rather than rule it, and allow board members to express themselves freely within a well-defined framework around specific objectives.
Q: How have your views about what makes a good chair changed over the years?
A: I recall 30 years ago observing a chair (not in the superannuation arena) who was domineering, rude, dismissive and altogether a very unpleasant individual. I determined then that if I was ever given the opportunity, I would be a very different chair to him. Now, even as a chair for many years, I still continuously refine how I manage my duties and the board. I take time after each meeting to reflect on how it went, where I could improve the structure of discussion and how we can get better outcomes.
No matter how long you do it, there are always subtle improvements you can make in such things as your style, and even your tone of voice, that will make a difference.
Q: Who are your most important mentors and who do you turn to for advice now?
A: Back in the early 1990s, as a young naïve director of my first fund, I probably owed much of my grounding in superannuation to the then-CEO of the Civil Aviation Authority Fund, Denis Carroll. Denis was – and still is – well respected throughout the industry for his thoughtful advice and counsel, which as a new director I thankfully absorbed. I also had a friend who was a chair and we would often have confidential discussions about our experiences in meetings and discuss how we learned from those experiences.
Unfortunately, he has now passed away and I do miss those discussions. As a chair, I believe it is vitally important that relationships with senior staff and the CEO are kept at the correct level. That does not mean you do not learn and gain insights from your dealings with people on a regular basis. Chris Davies and I meet on a very regular basis and I hope we both gain from our interactions and discussions.
The TelstraSuper chief legal counsel and company secretary and I have had many conversations over the years, both of us with the same philosophical intent of continuing to improve the governance of the board and the fund.