APRA has published the speech given by Ramani Venkatramani to the FINSIA – MCFS Banking and Finance Conference in Melbourne on 24 September 2007 on Governance and Performance Considerations in Superannuation.
Venkatramani asked "Could governance affect returns?" and wondered whether differing classes of trustee director spends different amounts of time on trusteeship.
He observed that the not-for-profit sector rely more on consultants they have selected and their trustees make more decisions directly than does the retail sector. He said that APRA has no philosophical view on the appropriate structure: its principal concern is to ensure that members’ interests are being served.
In addition to the above, he noted that APRA during its reviews assesses the qualitative aspects of fund governance, including:
- Whether trustees are monitoring the activities of various service providers in accordance with the Outsourcing Standard, rather than dominant service providers being allowed to operate without adequate monitoring by the trustee;
- How conflicts of interest are being identified and managed. For example, if a trust deed were to mandate the exclusive use of a related party service provider thereby creating an unacceptable conflict in discharging the trustee’s fiduciary duty, APRA would be concerned to ensure that members interests are not prejudicially affected by such a structure.
