Two critical issues arising from the Bill are:
a. how stringent will the requirements be for independency?
b. what will become the preferred numbers of directors/trustees?
The Government has released an Exposure Draft of its Super Governance Bill.
If passed, the Bill will require all APRA regulated funds – including industry funds, retail funds and small APRA funds – to have at least one third of the directors/trustees of the licensee being independent directors/trustees. Additionally, the chair must be one of the independent directors/trustees.
For existing funds (i.e. established before 1 July 2016), it is proposed that there will be a transition period during which the composition of the board of the licensee can be restructured. This transition period will end three years after the Bill receives Royal Assent.
New funds (established on or after 1 July 2016) will be immediately subject to the new governance arrangements.
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