Superannuation fund trustees with Financial Services Council (FSC) membership will need to have an independent chair on the board under draft superannuation governance standards the industry body has released yesterday.
Independent directors would also need to make up the bulk of the board and form the quorum of any board decision under the FSC's Superannuation Corporate Governance Policy.
The licensee would be expected to act when a director held multiple positions with licensees that could "objectively, reasonably and sensibly" see them competing for the same membership, the FSC said.
"Some conflicts can be managed, some should be prohibited. In the absence of legislation, we've sought to put in place a provision where you can not have multiple directorships of competing public offer funds," FSC senior policy manager, Andrew Bragg said.
He said trustees would need to switch aggregated reporting with company level and resolution level reporting under new proxy voting standards.
Bragg said although the change was huge, it was important because over 50 per cent of equities held in the ASX were owned by institutional investors and because the two-strike rule now applied.
Default and MySuper products would also need to include an environmental, social and governance risk management policy, he said.
Bragg said the policy intent was set in stone, but members had two months to consult on technical and operational details.
The FSC's policy will be finalised by the end of the year with voluntary compliance encouraged from 1 July 2013 and mandatory compliance for FSC members kicking in on 1 July 2014. Over one third of the industry was members, he said.
The policy echoes proposals expressed by Shadow Minister for Financial Services and Superannuation Mathias Cormann after he rejected the Government's Superannuation Legislation Amendment (Trustee Obligations and Prudential Standards) Bill 2012 two weeks ago.