When boards use related parties: Outsourcing and superannuation fund performance

Kevin Liu, Elizabeth Ooi

Research output: Contribution to journalArticle

3 Citations (Scopus)

Abstract

Superannuation funds heavily outsource key fund functions to service providers who play a crucial role in superannuation fund operations and affecting Australians’ retirement savings. We examine the impact of related party service provider usage and trustee‐director affiliation on investment performance. We find that for‐profit funds significantly underperform when using related party service providers. The underperformance is more severe when the board is controlled by more affiliated trustee‐directors and belongs to a vertically integrated conglomerate group. Our results raise concerns about whether recent regulatory reforms increasing trustee‐directors’ duties effectively address the conflicts of interest inherent in related party service provider arrangements.
Original languageEnglish
Pages (from-to)715-746
Number of pages32
JournalAccounting & Finance
Early online date21 Jun 2018
DOIs
Publication statusPublished - Apr 2019

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Outsourcing
Fund performance
Superannuation
Service provider
Investment performance
Conglomerate
Integrated
Retirement saving
Conflict of interest
Regulatory reform
Underperformance

Cite this

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When boards use related parties : Outsourcing and superannuation fund performance. / Liu, Kevin; Ooi, Elizabeth.

In: Accounting & Finance, 04.2019, p. 715-746.

Research output: Contribution to journalArticle

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