The tip of the superannuation iceberg
Geoff Lake writes: Re. “On superannuation and independence” (yesterday). I have followed with some interest the exchange of articles in Crikey between Stephen Mayne and Andrew Whiley over the past week about the Abbott government’s proposed changes to superannuation governance. Mayne has focused each of his contributions on Vision Super, presumably given his own connection to local government. While many of the things he has highlighted about Vision Super have been disparaging and ill-informed, I have tried to resist the urge I have felt after reading each one to respond.
However, that was until reading his surprisingly offensive contribution yesterday. I say surprisingly because I have always respected the way that Stephen Mayne has been a loud and fearless champion of increased diversity in boardrooms, councils and parliaments throughout Australia. Yet in asserting (incorrectly I might add) that the APRA enforced “fit and proper” requirements of super fund directors are merely perfunctory, he went on to illustrate this point by highlighting that one particular Vision Super director was “a home care worker from the City of Greater Dandenong.” That was it. He didn’t mention anything else about her. It wasn’t that she had done something improper or failed to act in a certain way when required. It was just that she is a mere “home care worker”. In one sentence, he flippantly dismissed this person — someone who possesses 17 years of superannuation experience as well as broader non-executive organisational governance experience — as possessing no possible qualification or skill to warrant her place around a superannuation board table.
And there lies the very thing at the heart of the equal representation trustee director superannuation model which he and Josh Frydenberg simply do not understand and so eagerly seek to tear down. It is the connection of this director to the industry and workforce which she serves. She might not hold several corporate directorships or lunch regularly at Flower Drum but she understands more about her fellow members — the pressures they face, the financial anxiety of appropriating retirement, the way some spivs look down on what they do — than Stephen Mayne or Josh Frydenberg ever will. Stephen Mayne highlights her occupation as the thing which makes it inappropriate for her to sit on a super board, but I see it as the very thing which makes her so appropriate to be there. Indeed, she works day in and day out in an area of her local council — home care — which accounts for more of Vision’s 100,000 members than any other area.
I have been her colleague on the board of Vision Super for six years and have closely observed the careful and diligent way that she contributes to and shapes debate around our board table, always focused on what is in members’ best interests. Her contribution is no less than our other directors which Stephen chose not to highlight, including one who was previously a secretary of a state government department and another who led the Victorian Employers’ Chamber of Commerce and Industry (VECCI) and was a partner in an international law firm.
Millions of Australians are today many thousands of dollars better off than their peers because they have had their super in a not-for-profit fund rather than in a retail fund. This is an incontrovertible fact that not even the retail funds challenge. The representative trustee model lies at the core of the reason for this difference in fortunes.
This model has worked so effectively and stood the test of time for the very reason that it places the governance of not-for-profit funds in the hands of directors who are not interested in anything more than maximising the retirement outcomes of their fund’s members. This is because they typically are members themselves, represent members industrially or employ members. In each case they are motivated to pursue the best interests of members because of their direct and deep connection to them.
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The proposition implicit in the current debate that this makes them non-independent and needing to be reined in, is utterly flawed and misconceived. These representative directors are in fact the very essence of independence – possessing completely aligned interests to the members which they serve. It is a refreshing point of difference from directors in the rest of corporate Australia, but one which is now sadly very much under threat.
Geoff Lake is the Deputy Chair and an employer nominated director of Vision Super – a not-for-profit fund managing approximately $8 billion on behalf of 100,000 members who predominately work in the local government and water sectors. He is also a member of the ALP. The views expressed in this article are his own.
Dave Worth writes: In today’s Crikey comments, Stephen Mayne provides the Equip Super Board of Directors as an exemplar of a super fund that has “a skill-based requirement in its constitution.” I note that at the top of the page he provides a link to is a picture of a good-looking young woman, but none of the listed Board directors are women. Maybe they and other super funds need a gender requirement in their constitutions as well?
Michael Donohoe writes: Stephen seems to think that industry super funds owe some duty to employers, the Victorian councils that failed to understand or were not advised by their representatives about the effects of an EBA on super, rather than a duty to the best interests of their members. Does he proposed that “independent directors” should provide advice to non fund members, the employers, that is against the legitimate interests, a decent pay increase, of the fund members?
Secondly what the fuck is wrong with a home care worker being on the board of her/ his superannuation fund? Seeing what a mess the “smartest people in the room” made of the global financial systems over the past 10-20 years, maybe all financial institutions would be better off with someone on their boards who has some real life experience. At least they would knows when shit stinks.
Everyone just calm down
Mark Freeman writes: Re. “China crash has real implications beyond the budget” (yesterday). Yet another Chinese share market bubble pops and once again the end of the world is nigh. Who writes this stuff ? Apparently seasoned Crikey scribes who should know better. The index more than doubled in less than a year this time. A quick internet search confirmed my memory that such booms and busts have been frequent in the past 25 years. An irrationally overvalued share market is not in a nation’s interests and the sooner things return to sensible values the better. There are all sorts of reasons to be concerned about China. Overdue share price corrections are not one of them.
The effect of media boycotts
Ian Lowe writes: Re. “The Pyrrhic victory of politicians’ media boycotts” (yesterday). The disturbing thing about the ABC line that there wasn’t time to replace Barnaby Joyce on the July 6 episode is that it implies he would have been there as well as two panellists even further to the right, the perpetually egregious Greg Sheridan of News Corp and Trisha Jha from the appalling “Centre for Independent Studies”. So how can the Coalition say with a straight face that the the ABC is biased to the left? Week after week these far-rights get a national audience to spout their flat-Earth views.
John Poppins writes: The Q&A episode which has created such unwarranted controversy covered other issues which have sadly gone unremarked. One was the lack of consideration by miners and state governments for the views of local traditional owners of their lands. This is important to the current discussion of Constitutional Recognition. It was one of the most interesting episodes I can remember. I was certainly not offended by any part of it.
The absence of a good many of the current government’s ministers is not a good look but it may work to improve the standard of discussion. The current government’s policies so consistently demonstrate denial of fact, inconsistencies between policies, a lack of concern for citizens and PAYE taxpayers, lack of transparency, unwillingness to tackle rorts by multinational corporations, and a substantial lack of moral compass, that many ministers can only do further damage to the Coalition party’s standing when they do appear. Pugilistic Politics has become truly Toxic.
Malcolm Weatherup writes: Re. “Just between you and me” (yesterday). Sean Edwards is quoted verbatim in Tips and Rumors: “The government plans to specifically recognise Aboriginal and Torres Straight Islanders in the Constitution … ” Is this closet discrimination against Torres Strait Islanders who enjoy an’ alternative lifestyle’?
On the dithering government
Les Heimann writes: Re. “Abbott’s policy paralysis leaves an economy increasingly at risk” (yesterday). Very succinct Bernard Keane. In a few paragraphs the government’s failure to perform is laid bare. This is a government we can do without and instead we have? Nothing. There is no more time for the conservatives; they have neither the wit nor the willingness to construct a believable platform of any kind before they must face the people. What might Labor do? This is the time for an Opposition with a plan to lay it out. I await the next instalment on what Bernard might consider the ALP position on the pressing points he raised. He will have to do it for them.