Financial Services Minister Kelly O'Dwyer will on Tuesday reveal the Coalition's intentions to reintroduce a bill into Parliament that will require superannuation fund boards to have a minimum of one-third independent directors.
The government introduced a bill in December last year to mandate that all super funds appoint one-third independent directors, including an independent chair, but it was deferred by the Senate after the crossbench senators at the time, Jacqui Lambie, Glenn Lazarus, John Madigan and Nick Xenophon, sided with Labor and the Greens to vote it down.
The government has since gone quiet on its push to improve super fund governance. However, Ms O'Dwyer will tell a super fund conference on Tuesday that the legislation will be reintroduced.
Ms O'Dwyer will also challenge industry super funds to publish their self-funded review, led by former Reserve Bank governor Bernie Fraser, which was expected to devise an alternative path to strengthen governance.
"It seems that this review has disappeared into a black hole. My question for you all today is, are you serious about lifting governance standards in this sector or do you want to cling to outdated practices which do not reflect the size, the scale, nor the enormous importance of this industry?" Ms O'Dwyer will tell delegates at an Industry Super Australia conference in Canberra.
'No longer credible'
"It is no longer credible for people to protect ... cosy deals and lower governance standards, given what is at stake is confidence in the system and the retirement savings of millions of Australians.
"That is why the government remains committed to reforms that will lift superannuation funds to at least the same standard as other financial services organisations like banks and life insurance companies.
"We will reintroduce our bill to require trustee boards to have a minimum of one-third independent directors, including an independent chair. I look forward to working collaboratively with you all. In particular, I look forward to hearing what became of the Fraser Review on not-for-profit superannuation fund governance," Ms O'Dwyer will say in a hard-hitting speech.
Most retail super funds already have a majority of independent directors, which is a membership requirement of the Financial Services Council. But industry super funds have a model of equal representation, whereby boards are comprised of members of unions and employer groups in equal numbers.
Industry funds have rejected efforts to mandate more independent directors, largely on the grounds that the current system has served members well.
