Patricia Cross leading candidate to chair Future Fund board

Future Fund board member Patricia Cross is the obvious choice to replace Peter Costello as chair when his term expires in February, industry insiders say.

Future Fund Board of Guardians member Patricia Cross. Picture: Britta Campion

Future Fund board member Patricia Cross is the obvious choice to replace Peter Costello as chair when his term expires in February, industry insiders say.

The Australian understands that Jim Chalmers is keen to appoint a woman to lead the seven-member Board of Guardians, after three men have occupied the role since the fund’s inauguration, including David Murray from 2006, David Gonski from 2012, and then Mr Costello from 2014.

Industry sources said there were many highly qualified female candidates who would be suitable, but that Ms Cross, who was chairwoman of the Commonwealth Superannuation Corporation and who has extensive international professional experience spanning seven countries, should be considered the leading contender.

Appointing an external candidate from the pool of corporate Australian boards could prove difficult given the extent of the Future Fund’s investments in ASX-listed companies, sources said.

All agreed that a successful candidate would need deep investment experience, particularly given the broad swath of often complex assets managed by the Future Fund.

They would need a sophisticated understanding of the challenges of managing money at the cusp of what could prove a new era for financial markets following decades of disinflation and falling interest rates, insiders said.

Macquarie board member, economist and former RBA board member Jillian Broadbent was also identified as eminently qualified for the role, although The Australian understands she would not be interested in taking the job.

Future Fund chair Peter Costello is stepping down after 14 years. Picture: David Geraghty

Treasurer Jim Chalmers. Picture: NCA NewsWire / Martin Ollman

Mr Costello, who was reappointed for a second five-year term in 2019, told The Australian that whoever replaced him must be able to defend the independence of the fund and protect the $200bn national asset from the “sticky fingers” of politicians.

The former Liberal federal treasurer set up the fund in 2006 with $60.5bn using the proceeds from budget surpluses and the ­Telstra privatisation.

Designed to pay for the unfunded superannuation liabilities of commonwealth public servants, Mr Costello said it was a “national asset” that was “owned by the people of Australia”.

“And you have to defend it against government, because governments over the years have had ideas to put their sticky little fingers into it,” he said.

“You need a candidate that has experience with financial markets, and experience with international investment. Someone who can keep the fund out of trouble, in terms of investments.”

On Monday, Dr Chalmers and Finance Minister Katy Gallagher in a joint statement said “a formal merit-based recruitment process will now commence to appoint a new chair”.

“The government will also carefully consider any future board vacancies as an opportunity to refresh and renew the Future Fund’s leadership,” the statement said.

While Mr Costello formally advised the Treasurer two weeks ago, it has been long clear that Mr Costello would not be seeking a third five-year term.

The government had already started the process to recruit a new chair with deep investment industry experience, with the search also looking overseas.