Oh no, more “independent” LGS directors
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- Published: Wednesday, 30 October 2019 13:03
In November last year we emailed members to explain how an “independent” Chair would be appointed to the LGS Board. Historically we’ve made our view known in depaNews that we don’t believe there is a role for directors on the board other than representing the employers and the employees in the industry. The Superannuation Industry Supervision Act 1993 requires that directors act independently (so what’s the point?) but the major regulator of superannuation funds, the Australian Prudent Regulation Authority (APRA) despite getting a bit of a serve from the Royal Commission, sees it as desirable. And if APRA thinks it desirable, funds had better get with the program.
In November last year we stressed to members that our director on the LGS Board at the time Sam Byrne had opposed this, as had I at the meeting of the shareholders, both Sam and I being rolled 7-1.
For reasons that can’t be explained fully, the expectation that this “independent” person would be appointed Chair of the Board by February 2019 was not realised. Only last week were members advised that two “independent” directors had been appointed, one as Chair, Kyle Loades, and one other as a director, Sandi Orleow. In the material sent to members and shareholders, there was no reference made to whether these directors had any interest, experience or passion for the concepts of responsible and sustainable investment that underpins LGS and its reputation.
During the year, and again being careful, there was a majority view of the Board and the Shareholders that there should be three employer directors and three employee directors, meaning that one employer director and one employee would need to resign. In the circumstances, the depa Committee of Management accepted that we’d had enough and our director Sam Byrne resigned effective 31 July .
We thank Sam for his service on our behalf and his commitment to responsible and sustainable investment.
The LGS Board will now be comprised of three employer representatives, three employee representatives and three “independent” representatives, one of whom will be the Chair. Someone’s mission is accomplished.
But despite our reluctance, the Sydney Morning Herald today announced these appointments in its Money section, under the heading “Local Government gets new chair, director”. Significantly, the article said:
The moves come after the $12 billion fund amended its constitution in June to make board changes following a probe into its governance by the Australian Attentional Regulation Authority (APRA).
And the incoming chair (incorrectly described as a “chairman”) is quoted as saying:
The board sees opportunity to enhance member value in the future. In line with APRA’s expectations, this will be an active consideration for the board and the leadership team.
We will provide an explanation for this next issue.