Gender diversity on superannuation trustee boards in Australia – evidence from profit-to-member funds

ABSTRACT

There has been a sustained public policy focus on the governance of superannuation funds in Australia due to the compulsory nature of the superannuation system established in 1992. Much of the attention on governance relates to the independence of directors on the trustee board companies of profit-to-member funds. Little consideration has been given to the gender diversity of these boards. This article explores changes to gender diversity on the trustee boards of 59 profit-to-member superannuation funds between 2010 and 2019. It shows a steady increase in the proportion of females appointed to these boards over this ten-year period. It draws out some important differences in female representation on public offer and non-public offer superannuation funds. It also reveals differences in the rate and extent of female representation among member and employer representatives on these trustee boards. Finally, it shows that there is a widening pool of females appointed to superannuation trustee boards rather than a shallow pool of women who serve on multiple boards.

KEYWORDS:

• Superannuation
• gender
• directors
• trustees
• governance

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes

1. Mees and Paul (2017) as well as Fraser (2017) refer to industry funds as a mutual type of business model.

2. The obligations imposed on trustees to act in the best interests of members, established in 1993 with the enactment of the SIS Act, have overtime been further refined with subsequent amendments to this act (including current s52 (2)(d)) and the creation of accompanying codes and guides such as APRA’s Prudential Practice Guide SPG 520 – Fit and Proper. (APRA, 2013).

3. Cooper recommendations regarding independent directors lay in abeyance while Labour held office at a federal level. It was picked up by the Coalition Government which released a discussion paper in 2013 and then introduced the Superannuation Laws Amendment (Strengthening Trustee Arrangements) Bill in 2017 (which was ultimately lapsed in the Australian senate).

4. A rare study of female representation and superannuation performance, which found that ‘ … women have a positive effect on Industry funds only, with the effect not significant for Retail funds.’ (Nisbet 2013, 2)

5. ‘(o)ur members have endorsed a gender diversity target and expect that at least 30% of the board positions in ASX-listed companies be occupied by women. In addition, companies should set a time frame within which they will achieve gender balance (40:40:20) on their boards.’ (ACSI, 2019: 14)

6. Non-Retail funds excluded include National Superannuation fund of Papua New Guinea; Guild Super (owned by the Pharmacy Guild and operated using a corporate director model); and the Commonwealth Superannuation Commission.

7. There were exceptions, notably The Prime Super board consisted of only 2 representatives (one member and one employer) and independents (ranging from 4–7) while the REI Super’s board had member representatives and an independent director but no employer representatives. REI was excluded from the sample for the discussion of the nature of board structure (but not size).

8. There are only three of these funds where the employer representatives have had a higher proportion of females than member representatives.

9. Boards with no female member directors (2010–2019): Alcoa of Australia Retirement Plan; AMIST; AvSuper Pty Ltd; Manildra Flour Mills Retirement Fund; Maritime Financial Services; NSW Electrical Superannuation Scheme; QANTAS Superannuation; SA Metropolitan Fires Service Super; TWU Super.

Boards with no female employer appointed directors (2010–2019): Equipsuper Pty Ltd; HostPlus; Manildra Flour Mills Retirement Fund; Maritime Financial Services; MTAA Super; NSW Electrical Superannuation Scheme; SA Metropolitan Fires Service Super.

10. Data from the 2016 census shows in the Electricity Supply industry (ANZSIC code 26) in NSW men account for 81.62% of employees and in South Australia men account for 95.32% of fire and emergency workers (ANZSCO code 4412). Data extracted using Table Builder (ABS, 2016).

11. This breakdown can only show the number of years in which a director appears in this sample and does not capture the number of years they may have been a director prior to 2010.

12. REI has been excluded from both all funds and AIST members as it does not have employer nominated representatives on its trustee board.

Additional information

Notes on contributors

Mark Westcott

Mark Westcott is employed as a Senior Lecturer in the Discipline of Work and Organisational Studies at the University of Sydney. His research interests include corporate governance and labour market inequality.

Tien Nguyen

Tien Nguyen has worked as a lecturer at Curtin Singapore since March 2017. She obtained her PhD from The University of Sydney in 2017 and her MBA from the University of Houston – Clear Lake in 2009. She has over 12 years of experience teaching in higher education. Her core teaching principles are student-centred learning and active learning. Tien’s research is in the Corporate Governance domain with a specific focus on the diversity and capital of corporate boards. Tien is currently part of several research projects investigating the role of female directors in environmental, social, and governance (ESG) disclosure and performance, corporate agility, and superannuation governance.