When Kristian Fok was named chief executive of Cbus Super in June last year, it was seen as a sign of the increasing professionalisation and depoliticisation of super. Appointing a sensible and respected chief investment officer, as opposed to a former union boss, politico or spin doctor was a statement that the construction industry fund was focused on investment returns for members above all else, not the politicking of the past.
Fok’s transition from CIO to CEO was being watched closely by boards and observers as a possible model for other funds to emulate, as the sector tries hard to shake off perceptions of ties to domestic politics and the labour movement and to refashion itself as a multibillion-dollar global pension fund focused only on hunting for the next investment opportunity.
But just over a year into his tenure, Fok was dragged back into industry politics and conflicts, with revelations of inappropriate conduct by the CFMEU – to which Cbus has close historical, financial and interpersonal ties – which ultimately resulted in the militant union being put into forced administration.
Now facing extra licence conditions imposed by the prudential regulator over governance concerns relating to its CFMEU connection, and months of negative headlines in the mainstream press, it is telling that Fok has opted to bring in a seasoned “super warrior”.
Cbus announced last week that Bernie Dean, former chief executive of the now-defunct Industry Super Australia industry body, will join the fund as chief strategy officer. As one of the architects of the infamous series of TV advertising campaigns such as “We’re All in This Together” and “Fox and the Henhouse” (the latter of which was interrogated by the Hayne royal commission), Dean has been at the centre of the rise and rise of the industry super funds movement – and central to the defence of the movement against its many enemies in the private sector and the conservative side of politics.
After being overlooked as the inaugural chief of the new Super Members Council – born of the merger of ISA and AIST – in favour of former Fairfax political journalist and universities sector lobbyist Misha Schubert, it was perhaps inevitable that Dean would resurface in a senior executive or trustee board role at an ISA-member fund.
But it is telling that it is Cbus he has chosen, and vice versa, as the fund attempts to fend off the CFMEU communications and governance crisis. Even more so because he replaces the highly regarded and Harvard-educated Alexandra West, who, like Fok, is seen as more of a centrist investment professional and finance executive, not a trade union/compulsory super apparatchik.
The stark contrast indicates Cbus’ attention has turned decidedly inward, towards the daily firefighting of Lonsdale Street and Canberra, not the high-flying life of an international fiduciary.
The appointment is understandable, given Dean will be able to draw on decades of experience to advise Fok and the executive team on handling politicians and the press and see the fund through the CFMEU crisis.
He will also be helpful in flying the flag for the profit-to-member sector’s founding principles. Cbus has always been willing to do this – notably and most recently, Cbus chair Wayne Swan launched a thinly veiled attack on Shadow Treasurer Angus Taylor’s comments about emulating the US 401K system.
But at the same time, Dean’s appointment will do little to quell critics such as former Liberal Prime Minister John Howard, who has called the upper echelons of industry super funds “Australia’s House of Lords” due to a preponderance of former Labor frontbenchers and union bosses.
A media release announcing Dean’s appointment points to his leadership of “marketing and advocacy programs that helped industry super funds remain competitive, protected the founding principles of super, and boosted member savings”.
It mentions his previous role working for WorkSafe Victoria, positioning him as some kind of objective bureaucrat, while – interestingly – omitting his years of service as a political adviser to Labor politicians, most notably former Victorian premier Steve Bracks, who went on to become Cbus chair after politics (a position now held by a former Labor treasurer and current party president in Swan).
Fok is right to recruit talent where he sees it and bring in skills that complement his own. But in a politically charged environment – in which a “jobs for the boys” culture in both business and the unions is under the microscope – it is not an appointment without risk.
If nothing else, it proves the sector is lining up along yet another front in the seemingly never-ending super wars.
