Lisa Marty, co-chair of First Super, talks about whether fund mergers serve members and the benefits of sharing the chair role.
Q: It’s been a little over two years since you were appointed co-chair at First Super. What have been your biggest achievements and challenges?
A: The greatest achievement is seeing the fund go from strength to strength with terrific returns for our members, and positive feedback from interactions with members, employers and stakeholders. The greatest challenge is to remain focused on delivering the best performance and service to our members through the noise.
At the same time, we have been navigating the political and regulatory environment and guiding First Super’s response.
Q: How do you work with co-chair Michael O’Connor? Is there a division of labour?
I have benefited from working with Michael O’Connor as co-chairs. He has a wealth of experience and is a thought leader. I’ve learned much from Michael since joining the board and his support as co-chair made the step into the role smoother for me.
We have different styles and strengths but a strong alignment of vision and values.
We take it in turns to chair board meetings but every other aspect where you would expect a chair to act, we do so cooperatively. We talk regularly and ensure we’re on the same page.
Q: Why do you believe the co-chair model works? What are its benefits in terms of governance of the fund?
It works well for our fund. The real benefit is that we are able to use each other as a sounding board and the process is stronger for that. In terms of governance, I think the role of the chair and the process are more robust for having both of our perspectives to consider. This includes the experience and skills of two different professionals, and an understanding of our membership from our different backgrounds. This all adds value to how we guide the fund.
Q: You have also been a director of the Australian Forest Products Association and Timber Training Creswick. You’re a consultant advising on policy, technical and training issues. What do you think are the most pressing issues for your members?
A: Our members are primarily workers in the timber, pulp and paper, furniture and joinery industries. We have a real mix of members across metropolitan and regional areas, including a number of towns that are heavily reliant on the employers for which our members work.
The forestry and wood product industries provide important socioeconomic benefits. Responsibly sourced wood products also have strong environmental credentials that make them a product of choice for sustainable building and alternatives to plastics into the future. However, wood supply constraints, energy costs and other factors provide challenges to our domestic processing industries. Job security is a real concern for many of our members as a result.
First Super’s role for our members is to grow their retirement savings and provide good quality insurance, advice and service at a low cost. It’s important for us to be close to our members. We aim to have staff available so our members can discuss their queries with a real person and [staff can] provide products and services that are true-to-label.
Q: What sorts of pressures do timber, pulp and paper, and furniture workers face in terms of their retirement needs?
A: I think timber, pulp and paper, and furniture workers have the same wants and needs as everyone in retirement. They want to have enough money saved to do the things they want and need to do, whether that be travel, taking up a hobby or interest, or helping family. Our aim is to help our members achieve a dignified retirement, so they have enough money not to worry about basics and to enjoy those years.
If you’re asking if our members have particular needs, well, many of these industries can be hard physically, so the fund has a level of insurance – death, total and permanent disability, and income protection insurance – that we feel protects our members without unduly eroding their retirement savings.
Q: There are pressures on smaller funds to merge but your chief executive, Bill Watson, has told Investment Magazine they are not always good for members. What is your and the board’s take on fund mergers, for First Super and others?
A: Fund mergers are considered and pursued for a range of reasons but our view is that any merger must deliver for our members. Big does not always equate with better. We have a low-cost structure, terrific investment returns and a solid insurance offering – any merger consideration would come down to the business case. That is, ensuring our members would be better off going forward and that their benefits were not diluted.
Q: The Royal Commission has shocked many in the industry. What are the seismic changes that may come from Hayne’s final report?
A: I agree. We were indeed shocked by the extent and depth of misconduct uncovered by the financial services royal commission.
It’s early days yet. We are reviewing the recommendations in the final report and what they mean for financial service providers, superannuation funds and our members.
Like many organisations, we have been reflecting on the royal commission cases; however, I am aware there is a lot to be done before any recommendations result in legislative change.
Q: How important is culture to an organisation?
A: Culture is central to any organisation. We’ve just seen the outcomes of organisational culture and incentives that put individual remuneration and profits ahead of members’ interests, through the financial services royal commission.
We value our culture, which is based around integrity and honesty – always putting members first. This is the consideration in every decision made around the board table and by our management team.
Our board has undergone significant renewal over the last few years. We’ve had the opportunity to appoint new members who have added to the diversity of our board and mix of skills and experience. All in all, the board and trustee office team are well positioned to steer the fund into the year ahead.
Q: Are there any particular areas of governance that you are focusing on now?
A: Certainly, regulatory change is now a sizeable area of focus for the board and will continue to be so in 2019. As a relatively small fund, the level of regulatory change and scrutiny requires substantial resources. We believe we have a strong decision making process in place, but we are always reflecting and evaluating to see if we can improve our governance in any way.
More recently, ESG has been an area of strategic focus for our board. As a relatively small fund, we rely on active participation in collective organisations like the Australian Council of Superannuation Investors (ACSI) but we also work on priority issues such as corporate governance, diversity of boards and management teams, executive remuneration and wage theft. Our approach is to engage directly and advocate on appropriate issues, and to focus on securing tangible outcomes.
Q: What are your priorities for 2019, for the fund and for you personally?
A: In 2019, it will be important to navigate market volatility and regulatory change while continuing to ensure we support our members in realising their retirement goals.
This year, the First Super team will continue to improve our efficiency as a fund and our services to members and employers, upgrading our technology and information management capacity to support that goal.
On a personal level, along with my fellow directors and the executive team, I will focus on contributing industry-wide this year to have a broader impact outside the boardroom for our members.