Gender gap on super boards: Large funds running out of ideas

One of the more interesting discoveries from slicing and dicing the statistics, is that the largest 20 super funds control more than two-thirds (69.4%) of all APRA-regulated super funds, and this works out to be close to 45% of all superannuation assets in Australia. In dollar terms, that is $1,121 billion (or $1.121 trillion) of the $2.5 trillion (as at 30 June 2017) of super fund assets.

Even more interesting (and potentially unsettling), is that the largest 20 super funds are run by a handful of men and women – a mere 170 people as at 30 June 2017 (latest information available as at June 2018) – and they control this massive amount of money ($1.121 trillion) via superannuation trustee boards. In other words, these 170 people control 45% of the superannuation market (see Table 1 below).

Note: The control of the super few seems to have been around for quite a while. As at 30 June 2016, the largest 20 super funds were run by 189 men and women, controlling $843 billion via superannuation trustee boards. As at 30 June 2015, the largest 20 super funds were run by 188 men and women, controlling $794 billion (see Tables 2 and 3 later in the article for 2015 and 2016 profiles).

Important: The actual number 170 (and 189 for 2016 year, and 188 for 2015 year) may be slightly overstated because some individuals are on more than one board, but the key message is that 170 board positions representing 20 super funds control 45% of the super industry. Note we have already taken into account that three public sector funds (PSS, CSS and Military Super) are run by the one trustee board.

Shuffling the numbers one more time, those 170 board trustee positions representing the 20 largest super funds, are made up of 109 men, and 61 women, as at 30 June 2017.

Note: As at 30 June 2016, there were 189 board trustee board positions, with 121 male board members and 68 female board members. As at 30 June 2015, there were 63 female board members on the trustee boards of the 20 largest superannuation funds, and 125 male board members.

Is the old guard blocking gender and generational board renewal?

You may have read in the news services recently that the federal government wants to force super fund trustee boards to appoint more independent trustees. Recently, the Productivity Commissions released a report also recommending more independent super trustees (one-third of the board, see SuperGuide article Productivity Commission and super: 22 draft recommendations).

Notwithstanding the energetic debate seesawing between pushing for more independent trustees (retail fund sector), and pushing against more independent trustees (industry fund sector), it seems major super funds and the federal government are ignoring the massive white elephant in the (trustee board) room.

Although there has been some improvement, Australia’s largest superannuation trustee boards are suffering a serious case of gender gap. Women are significantly under-represented on super boards, with only 4 out of the 10 largest super funds having at least 50% female representation on the trustee board (up from 2 of the 10 largest super funds as at 30 June 2016). Further, only 6 out of the 20 largest super funds have at least 50% female representation on the trustee board (same as previous year).

Note: The improvement in the 10 largest super funds is not really an improvement, because a single trustee board runs 2 of the largest super funds (public sector funds), and one of those super funds is new to the list. The trustee board has 55% female board representation, and that same board runs a third super fund in the list of the largest 20 super funds.

As an aside: And for those readers who will argue that the composition of fund membership is not relevant to board representation, let me pose this question? Why does superannuation still benefit, on average, significantly more men than women, and why has this issue not yet been resolved after 25 years of compulsory super? The gender gap in the size of super benefits has been an ongoing issue due to traditional work-based practices underpinning Australia’s super laws. Clearly, there are many more reasons for gender balance than because of systemic discrimination of women under existing super rules, but for this reason alone, gender balance on trustee boards is long overdue.

I also mention the percentage of female membership accounts because it seems that greater female representation on superannuation trustee boards has to be justified for change to take place, even though the past 25 years of predominantly male trustee boards has rarely been questioned. The percentage of female accounts is only partly an issue. The bigger issue is that the small group of people controlling our super accounts may not necessarily be selecting the most appropriate people to represent its fund members.

Note: I also believe the percentage of female membership (super accounts) is indirectly understated, especially in the older age groups, because in many cases the male super account is the super savings for a couple. I suggest this understatement because often the women are taking time out of work to bring up children and/or is working part-time. Of course, my comments are general observations, and individual circumstances will differ.

Examining the gender profile of specific super fund boards

The super laggers in closing the gender gap seem to be the largest industry funds, which is ironic because the industry fund sector has been particularly vocal about maintaining the status quo of board representation, in terms of corporate governance.

For example, the largest super fund, AustralianSuper has only 3 women out of 17 trustees on its board (18% representation), which is surprising, especially considering that 40% of its membership are held by females.

I don’t wish to point the finger at a single super fund, and AustralianSuper, is a comparatively strong performer in terms of investment (notwithstanding this gender gap issue) but perhaps not as strong in being an advocate for female-friendly super policies to bridge the retirement savings gap. Instead allow me to point the finger at a few more trustee boards needing to bring themselves into the 21^st century, in terms of gender representation.

Industry super fund, REST has only 4 women out of 15 trustees on its board (27%) even though 60% of its fund membership accounts are held by women. While UniSuper has only 4 women out of 11 trustees (36%), although 57% of its membership accounts are held by women.

Again, First State Super has only 4 women out of 11 trustees on its board (36%) even though 66% of its fund membership accounts are held by women. Cbus has 4 women out of 18 trustees, noting 92% of its fund membership accounts are held by men.

Note: Industry fund, SunSuper has 4 women out of 9 trustees (44%), and 45% of its membership accounts are held by women.

Before I am accused of industry fund bashing, retail fund, OnePath Masterfund (ANZ) also has a patchy record on gender equality on its trustee board with only 1 of its 5 trustees (20%) being a woman, although 42% of its membership accounts are held by women.

And note that industry fund, HESTA has 8 women trustees out of 14 (57%), but this fund also has a massive 81% of its membership accounts held by women.

What are the consequences of a gender gap at board level?

I have been working in, or writing about super, on and off, for the past 30 years, and I am still seeing the same faces flitting about the various boards. I am also listening to the same discussions about the gender pay gap, gender gap in leadership roles and the lack of family-friendly super policies.

I want to be clearly understood, that I am not criticising the performance of those highly capable individuals (for the most part) on the super boards. I am questioning whether all fund members, especially women, are getting their interests looked after by these trustee boards, both at the day-to-day policy level and at the political level.

In my opinion, the lack of progress on female-friendly super policies is a direct result of traditional trustee boards and traditional senior management of super funds. In particular, there is a lack of dynamic board renewal and an embarrassing lack of significant female representation at the board level, and at the senior management level.

In a recent SuperGuide article, I wrote: “ many of the superannuation policies in place [ignore] the unique life circumstances faced by half of the country’s population, thanks largely to a parliament run by male politicians who [are] remote from the day-to-day demands of a typical family, and due to a superannuation industry and trustee boards of superannuation funds dominated by older male leaders (and in some cases, female leaders) who may have successfully fought the early super battles but are not generationally equipped to tackle the next fundamental change necessary to the super rules. Of course, the superannuation dilemma for women [is] compounded by endless government tinkering and political expediency on both sides of politics, which cut back existing policies, or dismissed as too hard, possible female-friendly super policies.” (for more information, see SuperGuide article Women and super: How to beat the odds).

On the upside, the super fund industry is faring a lot better than the largest Australian listed companies in terms of gender representation on boards, but even referring to the statistics for Australian companies is embarrassing. What has the Australian Institute of Company Directors, the Business Council of Australia and the federal government been doing on this issue for the past couple of decades?

Again, in my opinion, the lack of female-workplace leadership opportunities, from the ground up, is a direct result of the AICD, BCA and the government talking to the same people about the same old issues, notwithstanding the minority of women on boards who must be getting exhausted being the only speakers at events talking about ‘women on boards’.

As I stated last year, I am certain that a list of 25 to 30 highly qualified women can be quickly compiled to redress the gender imbalance on the trustee boards of the largest 20 super funds. Without doing research, I believe I could identify at least 50 highly qualified and experienced women immediately suitable to take up trustee roles.

The super industry has a high calibre of females working in the sector but they just don’t seem to be able to cross over to board level, at least not that often. Instead, the super industry is losing these women to other sectors.

Set out in the tables below, is the gender composition of super trustee boards for the past 3 years:

• Table 1: Gender gap on super trustee boards: Largest 20 super funds (as at June 2017)
• Table 2: Gender gap on super trustee boards: Largest 20 super funds (as at June 2016)
• Table 3: Gender gap on super trustee boards: Largest 20 super funds (as at June 2015)

Table 1: Gender gap on super trustee boards: Largest 20 super funds (as at June 2017)

		Trustee board directors (as at June 2017)
Super fund	Fund type	Number of directors	Number of female directors	% of female directors	% of female member accounts
1. AustralianSuper	Industry	17	3	18%	40%
2. State Public Sector Superannuation Scheme (QSuper)	Public Sector	9	2	22%	64%
3. MLC Super Fund	Retail	7	3	43%	40%
4. Public Sector Superannuation Scheme	Public Sector	11	6	55%	58%
5. Colonial First State FirstChoice Superannuation Trust	Retail	6	4	67%	42%
6. First State Superannuation Scheme	Industry	11	4	36%	66%
7. CSS fund	Public Sector	11	6	55%	44%
8. UniSuper	Industry	11	4	36%	57%
9. Retirement Wrap (BT)	Retail	6	3	50%	45%
10. AMP Superannuation Savings Trust	Retail	5	2	40%	38%
11. Sunsuper Superannuation Fund	Industry	9	4	44%	45%
12. Retail Employees Superannuation Trust (REST)	Industry	15	4	27%	60%
13. Military Superannuation & Benefits No 1	Public Sector	11	6	55%	18%
14. HESTA	Industry	14	8	57%	80%
15. Construction & Building Unions Superannuation (CBUS)	Industry	18	4	22%	8%
16. OnePath Masterfund (ANZ)	Retail	5	1	20%	42%
17. Wealth Personal Superannuation & Pension Fund (North Personal Super) (AMP, formerly AXA)	Retail	5	2	40%	42%
18. IOOF Portfolio Service Superannuation Fund	Retail	5	1	20%	44%
19. HOSTPLUS	Industry	11	4	36%	50%
20. Mercer Super Trust	Retail	5	2	40%	40%
Average female board representation				39%*

*Although the average over the largest 20 super funds is 39% female representation per fund, when looking at the total number of trustee directors for the 20 largest super funds combined, female representation is 38%.

Source: Number of trustees sourced from APRA Fund-level superannuation statistics, June 2017 edition (released 28 March 2018), and the percentages are calculated by Trish Power, using APRA data.

Table 2: Gender gap on super trustee boards: Largest 20 super funds (as at June 2016)

		Trustee board directors (as at June 2016)
Super fund	Fund type	Number of directors	Number of female directors	% of female directors	% of female member accounts
1. AustralianSuper	Industry	18	4	22%	40%
2. Colonial First State FirstChoice Superannuation Trust	Retail	6	4	67%	42%
3. State Public Sector Superannuation Scheme (QSuper)	Public Sector	9	2	22%	64%
4. First State Superannuation Scheme	Public Sector	13	6	46%	67%
5. Retirement Wrap (BT)	Retail	5	3	60%	44%
6. UniSuper	Industry	11	4	36%	57%
7. AMP Superannuation Savings Trust	Retail	5	1	20%	38%
8. The Universal Super Scheme (MLC)	Retail	7	3	43%	40%
9. Retail Employees Superannuation Trust (REST)	Industry	15	4	27%	60%
10. Sunsuper Superannuation Fund	Industry	8	3	38%	45%
11. HESTA	Industry	13	7	54%	81%
12. Construction & Building Unions Superannuation (CBUS)	Industry	20	4	20%	8%
13. OnePath Masterfund (ANZ)	Retail	6	2	33%	41%
14. Wealth Personal Superannuation & Pension Fund (AMP, formerly AXA)	Retail	6	1	17%	41%
15. IOOF Portfolio Service Superannuation Fund	Retail	7	2	29%	43%
16. ASGARD Independence Plan Division Two (BT)	Retail	5	3	60%	43%
17. HOSTPLUS	Industry	11	3	27%	50%
18. Mercer Super Trust	Retail	6	3	50%	39%
19. Telstra Superannuation Scheme	Corporate	7	3	43%	40%
20. Public Sector Superannuation Scheme	Public Sector	11	6	55%	58%
Average female board representation				38%*

*Although the average over the largest 20 super funds is 38% female representation per fund, when looking at the total number of trustee directors for the 20 largest super funds combined, female representation is 36%.

Source: Number of trustees sourced from APRA Fund-level superannuation statistics, June 2016 edition (released 10 February 2017), and the percentages are calculated by Trish Power, using APRA data.

Table 3: Gender gap on super trustee boards: Largest 20 super funds (as at June 2015)

		Trustee board directors (as at June 2015)
Super fund	Fund type	Number of directors	Number of female directors	% of female directors	% of female member accounts
1. AustralianSuper	Industry	19	4	21%	40%
2. Colonial First State FirstChoice Superannuation Trust	Retail	6	3	50%	42%
3. State Public Sector Superannuation Scheme (QSuper)	Public Sector	8	2	25%	64%
4. Retirement Wrap (BT)	Retail	6	4	67%	44%
5. First State Superannuation Scheme	Public Sector	14	7	50%	67%
6. AMP Superannuation Savings Trust	Retail	5	1	20%	39%
7. UniSuper	Industry	11	3	27%	57%
8. The Universal Super Scheme (MLC)	Retail	7	3	43%	40%
9. Retail Employees Superannuation Trust (REST)	Industry	14	3	21%	60%
10. Sunsuper Superannuation Fund	Industry	6	1	17%	45%
11. OnePath Masterfund (ANZ)	Retail	5	2	40%	41%
12. HESTA	Industry	13	7	54%	81%
13. Construction & Building Unions Superannuation (CBUS)	Industry	20	4	20%	8%
14. Wealth Personal Superannuation & Pension Fund (AMP, formerly AXA)	Retail	5	1	20%	41%
15. ASGARD Independence Plan Division Two (BT)	Retail	6	4	67%	42%
16. Mercer Super Trust	Retail	5	2	40%	39%
17. HOSTPLUS	Industry	12	3	25%	54%
18. IOOF Portfolio Service Superannuation Fund	Retail	6	1	17%	43%
19. Telstra Superannuation Scheme	Corporate	9	2	22%	40%
20. Public Sector Superannuation Scheme	Public Sector	11	6	55%	58%
Average female board representation				35%*

*Although the average over the largest 20 super funds is 35% female representation per fund, when looking at the total number of trustee directors for the 20 largest super funds combined, female representation is 30%.

Source: Number of trustees sourced from APRA Fund-level superannuation statistics, June 2015 edition (released 10 February 2016), and the percentages are calculated by Trish Power, using APRA data.

For more information on the 20 largest super funds…

For more information on the largest 20 super funds, see the following SuperGuide articles:

• Kingpins of super: 20 largest super funds
• Large super funds: How much do trustees get paid?
• Investment performance: Mega super funds fail to deliver best returns