Governance and Performance of Private Pension Funds: Australian Evidence

Abstract

The growing importance of private pension funds in the global financial, economic and public policy landscape has led to increasing regulatory and public interest in their governance and performance. Looking at the Australian private pension (superannuation) funds, this paper examines the impact of fund internal governance on investment performance. Utilising a unique dataset on Australian superannuation fund board attributes and director characteristics, we find that 1) board age diversity, 2) the presence of regular and independent review on performance and compliance, 3) non-busy board, and 4) directors’ fund ownership, are positively associated with fund performance. We find no evidence that more independent directors or higher director compensation are linked to better performance.