Pass trustee governance bill, Senate inquiry recommends

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The Superannuation Legislation Amendment (Trustee Governance) Bill 2015 should be passed, the majority of a Senate inquiry has recommended.

The Senate Standing Committee on Economics has been conducting an inquiry into the trustee governance bill. The majority report of the inquiry, released yesterday, recommends that the bill be passed without amendment.

“The committee is of the view that the bill contains provisions designed to ensure that superannuation funds have the flexibility to select independent directors who have the relevant skillset to aid fund performance, and which brings governance of regulated superannuation funds in line with international best practice standards of corporate governance,” said the majority report.

“The committee notes the concerns of submitters and witnesses in relation to unintended consequences regarding representation of members’ interests and added costs, but believes that the bill contains mechanisms to address these risks.”

Labor members of the Committee issued a minority report, calling for the bill to be abandoned:

Labor Senators are concerned that this bill is seeking to impose a significant ideological shift from a model of trustee governance to model of shareholder governance, that there is no clear and compelling evidence that the changes are warranted, and that there is widespread concern the definition of ‘independence’ contained in the bill is ambiguous

“This inquiry has revealed supporters of the bill demonstrating a troubling pattern of cherry picking favourable data, attempting to present unrelated data, and failing to present quantitative evidence to support many of their assertions.”

The Labor Senators on the committee recommended that the bill not proceed.

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