Date issued: 30 November 2006
While 90 per cent of Australians believe superannuation funds’ role is to protect members’ savings, nearly two-thirds want these funds to wield their investor muscle with the companies they invest in, according to CPA Australia’s fifth annual Confidence in Corporate Reporting Survey released today.
In fact, 65 per cent of the public want super funds to encourage better corporate governance practices, and 63 per cent want them to encourage better social and environmental practices.
As Australia’s superannuation pool rapidly approaches $1 trillion, the potential for funds to influence the conduct and practices of business they invest in is also increasing.
CPA Australia Chief Executive Officer (CFO) Geoff Rankin, acknowledged that superannuation funds are not always large and influential investors. However, he believes that where such influence exists, the survey findings clearly provide a mandate for funds to take a stronger role in encouraging better practices on behalf of their members and the wider Australian community.
‘The challenge for superannuation funds is to strike the right balance between protecting members’ savings and taking a broader view of their role in shaping the behaviour of business in Australia and overseas. Clearly these two objectives will not always align,’ said Mr Rankin.
The survey also asked Australians their views on whether it would be desirable or required that super funds invest in social and economic infrastructure, and innovation through research and development (R&D).
Two thirds (65 per cent) were strongly in favour of super funds investing in R&D into sustainable energy and technology, and 63 per cent believed they should be required to make such investments. More than half (58 per cent) said funds should be required to invest in general R&D, and 50 per cent said they should be required to invest in social infrastructure such as hospitals and schools. Funds investing in economic infrastructure such as roads and ports attracted the lowest support across all four groups.
While many finance professionals and business leaders felt personally positive towards this range of investments, they were more likely than other groups to reject any requirements imposed on funds.
‘The Australian public seems to be more comfortable with superannuation funds becoming advocates for better business practices, than with them being required to help fund infrastructure,’ said Mr Rankin.
The Confidence in Corporate Reporting Survey 2006 provides a further important perspective to the wider range of work CPA Australia is undertaking in the broad areas of financial reporting, superannuation, financial planning, and sustainability.
‘The survey provides an illuminating snapshot of the Australian public’s thinking on some extremely challenging social and economic issues for business, government, and the Australian community in general’, said Mr Rankin
Copies of the report are available at www.cpaaustralia.com.au/links?cicr
Background to survey
CPA Australia’s fifth annual Confidence in Corporate Reporting Survey surveyed 300 members of the public, including 69 shareholders, as well as 200 Directors/CEOs/Chief Financial Officers (termed ‘business leaders’ in the report) and 150 analysts/financial advisers/brokers (termed ‘finance professionals’), during September 2006.
The 2006 survey captured these groups’ perceptions on six broad areas. These were:
- Confidence in Australian corporations, local and overseas share markets, superannuation, and investments compared with a year ago.
- The performance and integrity of business leaders, regulators, and financial planners, and accountants.
- The potential for superannuation funds to influence broader community interests. These include improved corporate governance and corporate social responsibility practices from companies they invest in, as well as providing a potential source of capital for social and economic infrastructure and innovation through research and development.
- Prospects for superannuation funds to invest socially responsible companies.
- Adequacy and sources of retirement savings, along with views on who is responsible for safeguarding these savings.
- The complexity and credibility of superannuation fund reporting, along with readership habits.
- Prospects for superannuation funds to invest socially responsible companies.
The survey was commissioned by CPA Australia and undertaken by Worthington Di Marzio Research, an independent research organisation.
Further information
To find out more about Confidence in Corporate Reporting 2006, view the following media releases:
A copy of the CPA Australia’s Confidence in Corporate Reporting Survey 2006 along with detailed findings and media releases for previous years’ surveys are available from the Surveys & Research section of the website.
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