AustralianSuper CEO Ian Silk fronts royal commission

AustralianSuper’s chief executive, Ian Silk, finally got his turn in the financial services royal commission hot seat yesterday.

AustralianSuper CEO Ian Silk in Melbourne yesterday. Picture: Aaron Francis

AustralianSuper’s chief executive, Ian Silk, finally got his turn in the financial services royal commission hot seat yesterday afternoon, after a couple of days hanging around waiting for the end of four days of explosive allegations of fee-gouging greed — and potentially criminal behaviour — at super funds run by National Australia Bank.

The mood, which had turned grim after three torrid days hearing corporate gobbledygook from former NAB super trustee Nicole Smith, lifted as soon as Silk and his moustache — probably the second-most famous icon in superannuation after the industry’s hands symbol — slid into the witness stand.

Silk was there to deal with questions about the way Aussie, the nation’s largest fund with $140 billion of people’s retirement savings in its care, dealt with members’ money.

There were no questions about his pay packet — at $887,142 a year, Silk is cheap compared to big bank CEOs such as Macquarie’s Nicholas Moore, who trousered $25 million as he wrapped up his tenure atop the Millionaire’s Factory last year.

Silk was also the first CEO of a financial services outfit of any size to make the trek to courtroom 4A, at Melbourne’s Commonwealth Law Courts Building, and face the commission’s questions.

Counsel assisting the commission, Michael Hodge, QC, focused on two decisions made by the AusSuper board: pumping $2m into news website The New Daily and approving a TV commercial decrying the big banks as foxes wanting to get into the super henhouse. Commissioner Kenneth Hayne wants to know how either could be in the interests of members.

But questions about commercial appropriateness quickly became an opportunity for Silk to advertise the virtue, goodness and high investment returns enjoyed by members of not-for-profit industry super funds — in contrast to the low returns, “mis-selling, cross-selling and conflicts of interest” endured by those unfortunate enough to be marooned in a for-profit fund run by a bank.

Counsel assisting even assisted Silk by playing the ad itself, letting its ominous tagline “banks aren’t super” boom out, drowning out sobs coming from Family Court attendees standing outside the courtroom.

“Is the point that you’re trying to make, Mr Silk, that your fund generates higher returns than a bank fund?”

Silk’s right eyebrow maintained its seemingly permanent arch.

“Well it does, but that’s not the point I’m trying to make.”

Any idea a governance disaster might emerge quickly evaporated. It turns out that both endorsing the ad and going in on The New Daily were carefully considered by the super fund’s board. No, The New Daily hadn’t measured up as well as hoped. So, yes, AusSuper gave it away to Industry Super Holdings.

On the other hand, it had stayed true to its purpose of providing financial information to the “not working class, but working Australians” at whom it was aimed.

It was another opportunity.

“The difference between the best funds and the poorest funds is literally life-changing for people,” Silk told the commission.

Advocating for the best for members “is in the DNA of industry funds”, although it does not want to “be a thoughtless cheerleader”, he said.

Hang on, Hodge asked — how does that fit with the website’s charter of editorial independence? Simple, according to Silk. The website could come out in favour of industry funds “where the facts warrant that — and we say that in most cases the facts do warrant that”. After just two hours, he was free to go.