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ASFA and Corporate Governance

Superannuation fund trustees have a duty to make investment decisions in the best interests of the members and other beneficiaries of the fund. In 2009, superannuation funds held over $300 billion in Australian equities. This represents approximately one-third of Australia’s capital market.

As significant shareholders, superannuation funds have a keen interest in the performance of listed companies and the efficient operation of our capital market. Poor governance of companies can lead to poor financial performance, as well as fraud and failure. Good corporate governance, conversely, can have a positive impact on the earnings of superannuation funds and consequently the incomes Australians can expect in retirement.

ASFA takes a keen interest in good governance. ASFA has developed guidance on best practice governance for superannuation funds and has begun to assist superannuation fund trustees to assess and benchmark their own governance. ASFA has also issued a Best Practice Paper which provides guidance to superannuation trustees on becoming “active share owners” (BPP 17). A link to this document is available at the top of this page.

One of ASFA’s important governance-related activities is involvement in the Australian Securities Exchange (ASX) Corporate Governance Council. ASFA was actively involved in the development of the original 2003 ASX Corporate Governance Principles and Recommendation. ASFA was also involved in the development of the Second Edition of this document, released in August 2007. This latest edition can be downloaded from this page (above).

We remain committed to funds becoming active shareowners and to high standards of governance both within funds and within companies funds are invested in. Making both the ASX document and the ASFA active share ownership guidelines available is part of ASFA assisting both funds and listed companies potentially affected by these important developments.