Two government MPs, Karen McKeown and Nathan Hagarty, earned a total of $200,000 in directors’ fees last year for their roles on the board of the superannuation fund Active Super. The fund was recently found to have misled investors about its investments in coal, gambling, and Russian entities, despite claiming to avoid such industries. This case marked the first successful greenwashing prosecution contested by the fund, with previous cases being settled out of court. Active Super managed $13.5 billion in assets for 89,000 members during the relevant period.
Karen McKeown, currently the deputy chair of the board, has been a director since 2018 and received $115,159 in directors’ fees in addition to $12,092 in pension and superannuation. Her responsibilities include serving on the governance committee. Nathan Hagarty, the government whip, earned $82,256 in directors’ fees and $8,637 in post-employment benefits. He is a member of the risk committee and the audit and compliance committee. McKeown and Hagarty chose not to comment on the matter while legal proceedings are ongoing, and the case will return to court for the determination of costs and penalties.
Company directors are legally obligated to oversee and monitor the management of their company, remaining informed about its activities by regularly engaging with managers and staff. Active Super’s board of directors, including McKeown and Hagarty, faced scrutiny for their role in the fund’s deceptive practices regarding investments in coal, gambling, and Russian entities. The fund’s actions were found to contradict its stated commitment to avoiding such industries, leading to a landmark judgment in the Federal Court.
The case involving Active Super and its directors sheds light on the challenges of ensuring transparency and accountability in the financial industry, particularly regarding ethical investments and avoiding greenwashing. The fund’s management of billions of dollars in assets for tens of thousands of members underscores the importance of responsible investment practices and accurate disclosure to investors. The prosecution by the Australian Securities and Investments Commission highlights the consequences of misleading investors and the need for regulatory oversight in the financial sector.
The implications of the Active Super case extend beyond the specific actions of the fund and its directors, raising broader questions about corporate governance and ethical decision-making in the financial industry. The role of government MPs on the board of a superannuation fund adds another layer of complexity, as their actions and accountability come under public and legal scrutiny. As the legal proceedings continue and the case moves forward, the disclosure of information and the accountability of company directors will continue to be central issues in ensuring trust and integrity in the financial sector.
In conclusion, the involvement of government MPs Karen McKeown and Nathan Hagarty in the Active Super case highlights the need for greater transparency and accountability in the financial industry. The fund’s deceptive practices regarding investments in coal, gambling, and Russian entities have raised concerns about greenwashing and ethical investment practices. Legal proceedings and regulatory oversight play a crucial role in holding company directors accountable for their actions and ensuring the protection of investors’ interests. As the case progresses, the focus on corporate governance and responsible investing will remain essential in maintaining trust and integrity in the financial sector.
