Misunderstood: Future Fund’s Governance

Ashby Monk

Alex Dunnin flagged up an interesting Future Fund governance story in the Financial Standard. He suggests that the rumor that former treasurer Peter Costello would be offered a position working for the Labor Government at the helm of the $60 billion Future Fund illustrates a deep misunderstanding of the Future Fund itself. Dunnin notes:

“For example, the board already has a chairman in former CommBank chief executive David Murray and six guardians. Any role for Costello would have only been to join the board as an additional guardian or to replace one of the incumbents, noting that guardian John Paterson whose term expires this year is yet to be formally renewed.”

In short, Dunnin views the Costello appointment rumor as evidence that Australian politicians are unfamiliar with the Future Fund’s governance. This seems a bit of a stretch, but, given the Fund’s youth, it is possible that the politicians who were pushing for Costello to take over the Future Fund were forced to familiarize themselves with the Fund’s appointment procedures; the very procedures that were set up to keep politicians like them from meddling in the Fund’s internal activities.

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This website is a project of Professor Gordon L. Clark and Dr. Ashby Monk of the School of Geography and the Environment at the University of Oxford. Their research on sovereign wealth funds is funded by the Leverhulme Trust and The Rotman International Centre for Pension Management.

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