Media statement

Catholic Super Fund joins CSS in safeguarding the long-term interests of members through Australia's first and leading comprehensive governance program

12 November 2002

The trustees of the Catholic Superannuation Fund (CSF) announce the appointment of Westpac Investment Management as investment governance adviser. The investment governance adviser shall work with the trustees in managing social, environmental and corporate governance risks. The appointment will cover the trustees $350 million of Australian share investments.

“Poor governance has noticeably detracted from investment market performance in recent times. This appointment improves our risk management strategy and our stewardship of long term retirement benefits for our 30,000 members” said Chairman Mr Dan Sexton.

Investment governance is a rapidly emerging approach to risk management for long term investors such as superannuation and compensation funds. Its development has emerged from improved understanding of long-term risks facing corporations and thereby the members and insurers who rely on corporations for investment returns. In the absence of investment governance, or risk vigilance, corporate behaviours can give rise to community, regulatory and litigation risks detracting from investment returns.

“The front page of daily newspapers tell us that as long term shareowners, our interests are not being effectively managed by the companies in which we are owners. In appointing a governance adviser we will more actively manage this risk. We also want to send a clear signal to companies, the investment management community and to other investors, that we will not sit on our hands in relation to governance” said Mr Sexton.

2002 has been another dramatic year for investment governance. The gaps between the investment community, institutional investors and corporations have been exposed as substantial. A key challenge facing investors is how best to bridge these gaps.

“We are proud to stand alongside leading investors at the front of a new era of investment management. This is an all year round governance research and dialogue discipline for identifying social, environmental and corporate governance risks among Australian share investments. Importantly, it takes us well beyond the relatively short annual proxy-voting season. This is an approach to risk management that never sleeps” concluded Mr Sexton.

Welcoming the CSF announcement, CEO of investment governance leaders, the $10 billion Public Sector and Commonwealth Superannuation Schemes, Mr Steve Gibbs said “We congratulate our colleagues in this leading approach to long term risk management. This puts paid to the notion that investment governance is anything other than best practice execution of a trustees fiduciary duty and we would strongly encourage other superannuation and compensation fund boards to consider adopting this approach to risk management”.