Industry, public sector and corporate super fund boards are changing in structure with changing needs, according to Helen Rowell, deputy chair of the Australian Prudential Regulation Authority.

Speaking at the Australian Institute of Superannuation Trustees Governance Ideas conference in Melbourne Ms Rowell said the  percentage of women on boards had increased from 26 per cent in 2014 to 30 per cent in 2016 (although there are still a handful of all-male boards).

The percentage of independent directors on not-for-profit has increased marginally, from 9 per cent in 2014 to 11 per cent in 2016 while the average board sizes have remained unchanged at seven.

Average board tenure  has fallen slightly to 5.5 years in 2016 compared to 5.8 years in 2014. The percentage of directors with more than 12 years’ tenure was 14.4 per cent in 2016 compared to 15.1 in 2014.

Ms Rowell said changes in employment and fund membership structures were increasingly recognised as drivers for representative change for boards. “Increasingly members are self-employed or employed by (often multiple) small employers rather than one or a few larger employers,” Ms Rowell said.

“The proportion of fund members that are members of unions is likely to have declined, consistent with the decline in union membership generally and: an increasing proportion of members are moving into the post-retirement (or draw-down) phase, raising the need to consider representation of this segment of a fund’s membership,” she said.

Changes were already underway with an ” increased recognition by the industry of the importance of sound governance practices and improved decision-making.”

individual funds are improving the diversity and skill mix on their boards and “steps are being taken by AIST members to implement the AIST’s Governance Code, which was released earlier this year,” she said.

“There is a sharper focus, as a result of various regulatory reform proposals and APRA’s supervision activities, on the need for trustees to deliver quality, value-for-money member outcomes and to assess the extent to which that is being achieved,” Ms Rowell said.

“Given that trustees are running increasingly complex business operations and providing a wide range of services to their members, it is essential that the board is appropriately skilled to meet this challenge,” she said.

APRA has determined that improved governance practices have been evidenced by trustees who look at optimal board composition in a dynamic manner, as part of their strategic planning process.

“These boards seek to ensure that the requisite skills, capability, and experience needed to execute their strategy are achieved for the board as a whole, rather than merely ensuring that each individual director passes muster in terms of minimum fit and proper requirements (although that is obviously an important prerequisite),” Ms Rowell said.

Speaking to the issue of governance legislation before Parliament which calls for one third of independent board members on all super funds, Ms Rowell said “APRA’s position on the value of having independent directors on boards remains unchanged.”

“Independent directors broaden the skills and capabilities that can be brought to the board table, and improve decision-making by bringing an objective perspective to issues the board considers. They are also well-placed to hold other directors accountable, particularly in relation to conflicts of interest,” she said.

However AIST CEO Eva Scheerlink said in recent days that the proposed legislation “will dismantle the governance structure of the most successful, highest performing sector in the superannuation industry, causing unnecessary and costly disruption at a time when all super funds are having to deal with a raft of other regulatory changes and policy proposals”.

AIST’s new code of governance represents a better way of improving super governance practices, she said.  The new code ” will be mandatory for more than 50 AIST member funds from 1 July 2018. This builds on a voluntary set of guidelines that we published first in 2011,” she said.