Tuesday, 21 June 2011
Governance of Australian Government Superannuation Schemes Bill 2011, ComSuper Bill 2011, Superannuation Legislation (Consequential Amendments and Transitional Provisions) Bill 2011; In Committee
Thank you, Senator Cormann, for your contribution. The government does not support the proposed amendment. In terms of the rationale in the bill the arrangement requires a greater number of directors to be present at a meeting than is necessary to enable the minimum two-thirds voting rule under the SIS Act to be met. The bill requires two-thirds of the directors on the board to vote in favour of a resolution for a decision to be made. As I mentioned, I think last night, the two-thirds voting is a sort of joint veto arrangement, a blocking veto arrangement, in terms of the equal representation rule that was inserted in SIS back in 1993—for good reason as it has worked well, I might say. The government is of the view that increased quorum numbers will facilitate improved decision making to ensure the incorporation of all the views of interests represented on the board.
There are a number of safeguards in the current arrangements that can deal with the issues raised by Senator Cormann. APRA does have the power to act if any board member is not acting in the best interests of all members overseen by the trustees. This includes military and civilian. APRA has intervened in at least one fund, and I am sure there are others in the past, and removed trustee directors.
The bill allows the minister for finance to terminate a board member if they do not meet the SIS Act fitness and proprietary standards. When considering only military matters there must be a military member present for the decisions to be taken. The ACTU cannot direct member representatives in regard to attendance in voting. That is now allowed under the SIS Act. Once you are appointed you are, at arm's length, required to make the decisions. You cannot be directed. The body is a CAC Act body and requires that board members comply with the directors' duties set out in the act. The government does not support your amendments.