107: Scott Donald on Governance and Member Meetings

Conversations with Institutional Investors

In episode 107 of the [i3] Institutional Investment Podcast, we speak with Scott Donald, Associate Professor at the School of Private and Commercial Law of the University of New South Wales, about his research into governance and the now mandatory annual member meetings of superannuation funds. How do funds field questions from members? How can we check they answer all questions? What impact do these meetings have on the corporate culture and brand of a fund? After collecting nearly five years of data, Scott shares his insights into these interactions with members. Overview of Podcast with Associate Professor Scott Donald: 02:00 Researching the intersection of Annual Member Meetings and governance 03:00 Five years ago a rule came into effect that funds needed to hold annual member meetings. Do funds see it as a box ticking exercise, or do they take the opportunity to build a brand through these meetings? 6:30 The Q&A process in these meetings are way more specified than in a (listed company) AGM 09:00 Member meetings don’t have the disciplinary effect that an AGM has 10:30 How do we know if the chair has identified some of the more uncomfortable questions? 11:30 There isn’t really a mechanism for a member to say: ‘Hey, I asked this question and you didn’t really give an answer’ 13:00 Most questions get asked about fund returns 16:00 Climate risk questions are the second biggest in terms of the number of questions, after returns. We were interested to see whether all of those questions were from activists 17:30 What signal do we take from the questions being asked? I think there is a danger of misinterpreting that signal 23:00 Inconvenient questions for members 26:00 I hope funds will take a more bespoke and thoughtful approach to member meeting, rather than a this-is-best-practice and move on 27:30 False and misleading statement risk 30:00 Legitimacy is an issue in super and member meetings are a way of putting a face to super 31:00 We don’t know the extent to which the regulator is switched on to all these questions being asked 32:30 We are close to finalising the fifth season of member meetings and we will write that up 35:00 Upcoming research might look at the use of AI in super funds