Super fund directors may have conflicts of interest on listed company boards

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Super Fund,Directors,Conflicts Of Interest

Directors appointed by super funds to serve on listed company boards may face conflicts of interest due to their special interests, according to Mr Chronican. He stated that corporate governance in Australia requires boards to collectively pursue the best interests of the corporation, but directors representing special interests inherently have a conflict of interest. This issue is already prevalent when significant investors have representatives on company boards. Therefore, it is challenging to have board members with special interests in large public companies.

But Mr Chronican said that directors tapped by super funds to go on listed company boards may have special interests that made it “quite difficult” to maintain their independence.“The whole point of corporate governance in Australia is the board is collectively accountable for pursuing the best interests of the corporation,” he told“Now, when you have a director who represents a special interest, they have a potential conflict because they’re representing one party on that board.

Therefore, they’ve inherently got a conflict of interest.”He said this already often occurred when significant, cornerstone investors had representatives on company boards. “You’ve seen it in a number of companies – conflicts arise because, in their role as representing the significant shareholder account, they can’t simultaneously be representing on all occasions the best interests of the company that they’re on the board of . “That’s why in large public companies, it’s quite difficult to have a board member who has a special interes

 

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