Fit and Proper Policy

Regulated superannuation schemes are required to comply with standards relating to the fitness and propriety of Responsible Officers to ensure they make informed decisions in the best interests of beneficiaries. These standards are outlined in APRA Standard SPS 520 Fit and Proper and the APRA Prudential Practice Guide SPG 520 – Fitness and Propriety.

This policy adopts the APRA guidelines and applies them to ElectricSuper’s circumstances.

This policy applies to all existing Responsible Officers and anyone who is nominated to become a Responsible Officer of the scheme.

Responsible Officers must collectively satisfy criteria of both fitness and propriety. The standard requires that each individual satisfies the requirements of propriety, including character, honesty, integrity, diligence and judgement.  In the case of Board members, each individual would also be expected to make a contribution to the Board satisfying the requirements of fitness at a collective level.

Responsible Officer means any member of the Board or Senior Manager.

Senior Manager means any person who makes (or participates in making) decisions, or has responsibility for enforcing policies or strategies, or developing/implementing/monitoring risk management systems, any of which can affect business operations or financial standing. For ElectricSuper, the CEO is considered to meet this definition.

Fitness and Propriety means ‘the overall standard of educational and technical qualifications, knowledge, skills, competence, experience, diligence, judgement, character, honesty and integrity must be sufficient to discharge satisfactorily the duties and responsibilities of the Responsible Officer position in a prudent manner.’

4.1      Fitness

Prior to appointment as a Responsible Officer of ElectricSuper, fitness for the position will be determined by the following criteria:

1. Does the nominee meet the standards of Fitness and Propriety as outlined in this policy?
2. The nominee’s work experience, educational background and work references
3. In the case of a Board member, the mix of skills already on the Board
4. In the case of a Board member, the Sections of the Act and Rules covering appointments to the Board (Part XIII and Part XIIIA of Division 1 of the Rules)
5. The nominee’s agreement to adhere to ElectricSuper’s Training requirements

In the case of a Board member, a Board member is generally expected to understand the role and responsibilities of their role and have a general knowledge of the entity, its business and its regulatory environment.

However, each Board member is not generally expected to have all the competencies that the Board collectively needs if other Board members have those competencies or they are obtained from external consultants or experts and the Board does not unquestionably rely on their advice.

4.2      Propriety

When determining if a nominee is a ‘proper’ person, the following criteria are considered.

Whether the person:

1. Has demonstrated a willingness to comply with legal obligations, regulatory requirements or professional standards, or not been obstructive, misleading or untruthful in dealing with regulatory bodies or a court
2. Has complied with his or her obligations to the Board
3. Has no conflict of interest which may influence the Board’s or the individual’s ability to carry out his or her role and functions with the degree of probity and independence required or has dealt appropriately with such conflicts
4. Has not perpetuated or participated in negligent, deceitful, or otherwise discreditable business or professional practices
5. Has not been reprimanded, or disqualified, or removed by a professional or regulatory body in relation to matters relating to the person’s professional competence (where relevant to the role of the Responsible Officer), honesty, integrity or business conduct
6. Has not seriously or persistently failed to arrange personal details or financial affairs satisfactorily in circumstances where such failure caused loss to others
7. Has not been substantially involved in the management of a business or company which has failed
8. Is of sound repute in any business or financial community
9. Has not been the subject of civil or criminal proceeding or enforcement action, in relation to the management of an entity, or commercial or professional activities which reflected adversely on the person’s competence, diligence, judgement, honesty or integrity

ElectricSuper Nominations Committee will review all documentation for any nominee, or re‑appointment, of Responsible Officer to ensure the Fitness and Propriety requirements of ElectricSuper are met and will make a recommendation to the Board on the nominees’ suitability. To assist in this review, ElectricSuper will hold job descriptions for Responsible Officer positions which document competencies required for these positions.

The Nominations Committee must make all reasonable inquiries to obtain information, including sensitive information, relevant to the assessment.

Interim appointments to Responsible Officer positions do not need full assessments, but full assessments must be made prior to permanent appointment.

Sufficient documentation for each assessment must be retained by ElectricSuper.

Where a person is assessed as not meeting this Fitness and Propriety policy, the Nominations Committee should provide advice to the Board and in accordance with the recommendation the Board will determine how to proceed with the appointment or otherwise of this person.

The following process is to be conducted for any new Board appointment, new Trustee Office appointment and at the beginning of a new term of appointment for any Board member:

1. Obtain a Statutory Declaration that the person is not a Disqualified Person and that the person does not hold any office or possess any property whereby duties or interests might create a conflict of interest with the duties or interests as a Member of the Board
2. Complete the skills matrix questionnaire
3. Check with APRA whether disqualified
4. Obtain consent from the applicant to make an Australian Federal Police Criminal History Check and review the results of that search when received
5. Conduct a bankruptcy search
6. Verify evidence of any qualifications which are material to an assessment of competency for the Responsible Officer position
7. Verify recent employment history to the extent relevant and material
8. Check with relevant professional or industry bodies for matters relevant and material to an assessment of propriety
9. Check other matters disclosed in the Declaration to the extent relevant and material to an assessment of fitness and propriety
10. The Nominations Committee will review the appointment of the Board member.

Carrying out this process is the responsibility of the Company Secretary, or the Chief Executive Officer in the case of the Company Secretary. The Fit and Proper Checklist, and all findings, will be reported to the Nominations Committee.

Elected and appointed Responsible Officers of ElectricSuper must be meet this Fitness and Propriety policy at all times.  As such each Responsible Officer will be required to declare that they are not a disqualified person at each meeting of the Board or Sub-Committee.  The Nominations Committee will be responsible for regularly assessing Fitness and Propriety of Responsible Officers.

The management of the fitness and propriety obligations of the Board should be the subject of an internal audit review at least every 3 years.

In the event that an actual or perceived breach of this policy is identified, the ElectricSuper Procedures for Managing a Policy Breach should be followed.

The Responsible Officers of ElectricSuper need as a group, the skills necessary to prudently manage a legally and financially complex body. Training and knowledge will be managed in accordance with ElectricSuper’s Board Induction and Training Policy.

Auditors or actuaries who are appointed to perform functions for ElectricSuper must also comply with the Fitness and Propriety requirements and provide ElectricSuper with a declaration to confirm such compliance.