First State Super chair Neil Cochrane on investing in advice

Sally Rose

By

17/10/2017

CHAIR’S SEAT | In 2016, First State Super purchased the NSW Government’s financial planning business, StatePlus, for a reported $1 billion. The tie-up means the $80 billion default fund for NSW public servants now has one of the largest financial planning networks of any non-profit superannuation fund in the country. In this Q&A with Investment Magazine, First State Super chair Neil Cochrane shares why he is upbeat about the integration of the two businesses.

Investment Magazine: How is the integration of StatePlus going? What is the most challenging aspect of bringing the two businesses together?

Neil Cochrane: The integration and alignment of the two businesses is going extremely well. Our decision to acquire StatePlus last year was motivated by the belief that quality advice changes lives. The StatePlus acquisition is held as an investment in the First State Super portfolio. That means our members benefit from the capital appreciation of the investment and the dividend paid from the profits of StatePlus. Plus, by combining the advice capability of First State Super and StatePlus, we have expanded our geographical reach and increased the number of advisers available to assist our members.

IM: Are further acquisitions part of First State Super’s strategy?

NC: Absolutely. We are always interested in acquisitions and investment opportunities that will help us build scale, improve the services we offer to members and generate sustainable long-term investment returns.

IM: What is the most exciting project the First State Super board is working on at the moment?

NC: Our alignment with StatePlus presents some exciting opportunities. We now have 26 offices nationally, and almost 220 financial planners – giving us the largest member-owned financial planning network in Australia. Several projects are under way to help us maximise the potential of this powerful alliance and leverage the best of both organisations, optimising the access to advice services for our members, opening career opportunities for many of our people and creating a solid platform for future growth.

IM: The First State Super board has excellent gender balance, with six out of 13 of its directors women. Did that take a concerted effort? What benefits have you seen?

NC: We were deliberate about our desire for gender balance but it was not a difficult goal to achieve. Nearly 70 per cent of First State Super’s members are women, so for us it is especially important to have women on the board who can draw on their personal experiences and perspectives to help influence the decisions we make on behalf of our members. There is no doubt that we have a stronger governance framework and make better decisions because of the blended experience of the people who sit around our board table. Last year, we were also proud to be named a Workplace Gender Equality Agency (WGEA) employer of choice. Diversity of all kinds, not only in gender, is something we strive for at every level of our organisation.

IM: What is your next priority for improving diversity?

NC: Diversity means more than achieving equal representation of men and women. As our fund grows in size, scale and complexity, we need to ensure that the board continues to have the right mix of backgrounds, experience, skills and perspectives. It’s my role, together with our nominations committee, to work with our stakeholders to achieve this, and then to ensure that all of these diverse attributes can contribute to the ongoing success of First State Super.

IM: From your perspective as a former deputy chief executive of Colonial First State Global Asset Management and chief executive of REST Industry Super, what do you make of the bitter public rivalry between the retail and industry superannuation lobbies?

NC: The two groups have more things in common than they have differences. Chiefly, a growing cohort of ageing members and clients who are depending on all of us to deliver the products, services and investment returns they need to achieve peace of mind and a dignified retirement.

IM: How have your views about what makes a good chair changed since you took your first chair role at Commonwealth Bank Group Super in November 2009?

NC: I’ve learnt that I must firstly get to know and understand the individual directors and listen to their points of view. It is essential that all meetings provide directors with the opportunity to contribute, and discuss and debate issues in a respectful and collaborative environment. A large part of my role is to create an environment that enables that exchange of ideas.

IM: What is your top tip for how to facilitate a constructive board meeting?

NC: If my colleagues want to raise an issue or challenge a decision, then it is helpful to discuss it with me ahead of the meeting. I do this not to shut down the issue; rather, I want to open it up and create space for it. I have a responsibility to ensure that each one of my directors is given the space to be heard.

IM: Who were your most important mentors?

NC: The great inspirations of my life were my parents. My father was an extraordinary physician and medical researcher doing ground-breaking work on asbestosis in South Africa and my mother was a founding member of the Black Sash, one of the most effective anti-apartheid movements. They both taught me the importance of trying to live the golden rule of ‘do as you would be done by’. With the great privileges of being born white in South Africa came the equal demand to give back in meaningful ways.

IM: Who do you turn to for advice now?

NC: While I have been formally mentored in the past and still act as a mentor to others, I now see my professional community as my counsellor and coach. One of the most rewarding learning relationships I have is with First State Super chief executive Michael Dwyer. I think we both utterly trust each other and so are able to explore ideas without one of us thinking the other has lost his mind.