Construction industry super fund Cbus overhauled its executive team structure earlier this year, centralising its operations and services departments and completing the first major organisational change made by CIO-turned-CEO Kristian Fok.
Reflecting on the move publicly for the first time, Fok said that it has been a natural progression as the fund has grown, because an efficient team cannot “spend more time navigating each other rather than navigating outcomes”.
During a fireside chat at the Investment Magazine Fiduciary Investors Symposium this month, Fok said Cbus’ $85 billion of assets under management are becoming more complex to manage, with staff mentioning organisational silos rising as a major issue.
“Each time you do something, if one area grows, all the other areas want to grow to keep up. You end up having these competing areas,” he told the conference in Healesville, Victoria.
“When I started in the permanent [CEO] role, I changed a lot of that structure and moved into something that is actually quite consistent with both what the regulator wants us to do and what I’ve found to be very successful when I was running the investment team.”
The new structure saw the previously “scattered” operations teams aggregated under Nancy Day, who moved from chief operations officer of investments to that of the whole fund.
Fok conceded that “it’s a difficult role to fill” because of the well-rounded knowledge required in operations, technology, investment and administration. He nodded to how AustralianSuper has been working with its chief operating officer, Peter Curtis, who also took on the role to in the fund’s bid to establish a unified operations process.
The brand and growth teams of Cbus were integrated into the services department, while a transformation excellence layer was created to work across the fund.
“It’s a bit of a change, but it gets to bring people to focus on what we’re here to do, holistically,” Fok said.
Change of the guard
Investment chief moving to chief executive is not unheard of among institutional investors. Apart from Fok, Future Fund’s CEO Raphael Arndt also served as the sovereign wealth fund’s CIO for more than five years, albeit concurrently for some months.
Across the ditch, NZ Super’s outgoing chief executive Matt Whineray also oversaw the investment team for four years. But some went the opposite direction, including UniSuper’s CIO John Pearce who served as Colonial First State’s CEO.
Out of approximately 650 Cbus staff, around 160 have investment-focused roles. While Fok said his CIO experience does help him steer the ship now, finding the right people to convey accurate and compliant member communications is something he (and all modern funds) still need to work on.
“We do have ASIC there that comes down on us like a ton of bricks if we’re not using quite accurate facts, or it seemed to be misleading.
“[Communicating to more engaged members] is a pretty fundamental shift in what we need to do… Certainly it’s not an area that I have strong background in, but the role of the CEO is not to do the stuff,” he said, but to find the right people.
Having passed the CIO baton to Brett Chatfield, his then deputy, Fok conceded that he has to be “very conscious” about not overstepping with the investment team, sticking to the position as more of a mentor and sounding board.
This switch at the top of the investment team took quite a bit of “succession planning”, according to Fok, because he believes it takes a certain type of person to succeed as an CIO, with calmness and resilience the most important qualities to possess.
“There are certain times where the team can come together can do their job pretty well. But other times, you have this very particular position where you have to rise above the noise and ask the right questions to get the team.
“In a crisis, the team can get fired up early, but then sometimes it’s actually calming them down so they can think straight.
“They [the CIO] can’t be shy petals. People are expecting to hear what they say, even just from the members, but also from the scrutiny on how we invest.”
