Do governance practices impact performance, fees and the pay-performance link of CIOs? The case of Australian superannuation funds

Yang, Jin Sug

Do governance practices impact performance, fees and the pay-performance link of CIOs? The case of Australian superannuation funds

Yang, Jin Sug

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Publication Type:: Thesis
Issue Date:: 2019

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Field	Value	Language
dc.contributor.author	Yang, Jin Sug
dc.date.accessioned	2020-04-22T04:45:36Z
dc.date.available	2020-04-22T04:45:36Z
dc.date.issued	2019
dc.identifier.uri	http://hdl.handle.net/10453/140183
dc.description	University of Technology Sydney. Faculty of Business.	en_AU
dc.description.abstract	This thesis examines the effect of governance practices of Australian superannuation funds on performance, fees and executive compensation. Based on governance practices discussed, and recommendations provided by the Cooper Review (2010) and the Murray Inquiry (2014), this thesis develops a governance index to capture the governance quality of Australian superannuation funds. This study presents two main findings. First, the results on the association between governance practices, performance and fees of retail and industry superannuation funds show that better governance practices are positively associated with retail fund performance. In contrast, the findings show no evidence that better governance practices are associated with performance and fees of industry funds. However, some individual governance variables, such as busy directors and directors with financial qualifications and prior superannuation fund experience, enhance the outcomes of retail superannuation funds. Further, busy directors, independent directors and an independent chairperson enhance the outcomes of industry superannuation funds. Second, when examining Chief Investment Officers (CIOs) pay and their pay-performance relationship in industry superannuation funds, the results show that CIO pay is positively associated with fund performance while better governance practices do not strengthen the pay-performance relationship of CIOs. However, some individual governance variables, such as longer-tenured directors, are positively associated with, and directors with financial qualifications are negatively associated with the pay-performance relationship of CIOs. Overall, the results contribute to prior literature on the governance arrangements and the pay-performance relationship of Australian superannuation funds. Moreover, the results have implications for regulators and policy-makers and provide empirical evidence on the impact of governance practices recommended by the reviews. The results suggest that governance practices are different between retail and industry superannuation funds; therefore, a one size “fits-all” governance approach may be inappropriate.	en_AU
dc.format	Thesis (PhD)
dc.language.iso	en_AU	en_AU
dc.relation	https://opus.lib.uts.edu.au/bitstream/10453/140183/2/02whole.pdf
dc.rights	au.edu.uts.lib/ppc
dc.rights	The author owns the copyright in this thesis including all reproduction and reuse rights for the work. The work may not be altered without the permission of the copyright owner. Attribution is essential when quoting or paraphrasing from this thesis.
dc.rights	info:eu-repo/semantics/openAccess
dc.title	Do governance practices impact performance, fees and the pay-performance link of CIOs? The case of Australian superannuation funds	en_AU
dc.type	Thesis	en_AU
utslib.copyright.status	open_access

Abstract:

This thesis examines the effect of governance practices of Australian superannuation funds on performance, fees and executive compensation. Based on governance practices discussed, and recommendations provided by the Cooper Review (2010) and the Murray Inquiry (2014), this thesis develops a governance index to capture the governance quality of Australian superannuation funds. This study presents two main findings. First, the results on the association between governance practices, performance and fees of retail and industry superannuation funds show that better governance practices are positively associated with retail fund performance. In contrast, the findings show no evidence that better governance practices are associated with performance and fees of industry funds. However, some individual governance variables, such as busy directors and directors with financial qualifications and prior superannuation fund experience, enhance the outcomes of retail superannuation funds. Further, busy directors, independent directors and an independent chairperson enhance the outcomes of industry superannuation funds. Second, when examining Chief Investment Officers (CIOs) pay and their pay-performance relationship in industry superannuation funds, the results show that CIO pay is positively associated with fund performance while better governance practices do not strengthen the pay-performance relationship of CIOs. However, some individual governance variables, such as longer-tenured directors, are positively associated with, and directors with financial qualifications are negatively associated with the pay-performance relationship of CIOs. Overall, the results contribute to prior literature on the governance arrangements and the pay-performance relationship of Australian superannuation funds. Moreover, the results have implications for regulators and policy-makers and provide empirical evidence on the impact of governance practices recommended by the reviews. The results suggest that governance practices are different between retail and industry superannuation funds; therefore, a one size “fits-all” governance approach may be inappropriate.

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http://hdl.handle.net/10453/140183