Sorry two years for CBUS shows it’s time super members got a say

“I will now make this very clear – no organiser or official is to agree to, or meet with, Mr Gatto or any other industrial mediator or fixer, except in the circumstances clearly identified in the policy.”

When the CFMEU’s federally appointed administrator, Mark Irving, KC, issued this warning in October 2025, the concern was that Gatto’s contact with the union opened the door for wrongdoing on building sites and worked against the best interests of dues-paying union members.

The “policy” referred to was issued after Zach Smith, seen as a player in a future, reformed, post-John Setka CFMEU, had organised for one of his subordinates to meet Gatto in secret. Smith ultimately stepped down, months later, from his CFMEU role citing personal reasons.

Viewed in this light, the decision of firefighters’ union boss Peter Marshall and plumbers’ union boss Earl Setches to join Gatto for a meal on a yacht last month seems at best ill-advised.

In addition to his union role, Setches is a “member director” on the board of the property arm of superannuation giant CBUS – meaning he is appointed by one of the industry fund’s union governors. On Thursday, in response to The Age’s reporting, the super fund launched a “fit and proper person” assessment of him and Lucy Weber, a CFMEU representative on the CBUS board.

Weber announced her resignation the same day, after we had revealed that she failed to disclose a personal relationship with Smith.

Industry super funds, such as CBUS, are custodians of billions of dollars in what is a multitrillion-dollar sector, and CBUS is the default super fund in many CFMEU members’ enterprise agreements.

The Age believes it is vital to the best interests of those members that holders of directorial positions are held to the same standards of probity that Irving is trying to establish within the union itself. This is the second time in 18 months that CBUS is dealing with questions about its directors’ links to the CFMEU and its problems.

The trade union movement was central to the creation of the superannuation funds we take for granted today, with building workers the first to receive an award-based super in 1984 from what eventually became CBUS. There is thus a compelling argument for unions to have some role in choosing fund directors.

But there have also been question marks over those nominated to fill those posts. When the federal government appointed Irving to administer the CFMEU in 2024, he sought the removal of the existing member directors from the CBUS board. Jason O’Mara resigned, but Irving then re-nominated him; Rita Mallia quit after she was sacked from her CFMEU role; while Dave Noonan was forced out after refusing to resign because there were no allegations of impropriety against him.

The Australian Prudential and Regulatory Authority (APRA) then ordered an independent review of O’Mara and the two replacement directors, Weber and CFMEU national president Paddy Crumlin.

While that review by Deloitte found all three were “fit and proper people” for their posts, it also noted that gaps in governance structures meant it was unable to conclude whether the directors had acted in the best financial interests of members when it came to spending on CFMEU events.

CBUS isn’t alone in making payments of this sort – both AustralianSuper and Hostplus have been identified over payments to industrial bodies.

The same review found that the board was highly attuned to managing conflicts of interest. This is unfortunate given the board was then appointing Weber who has now resigned over the apparent mismanagement of a conflict of interest.

Until now, the success of industry super has been used to bat away calls for more rigorous regulation of governance. CBUS deployed this argument when defending its handling of disability insurance and death benefit claims of thousands of members.

Some will point to former ACCC boss Graeme Samuel’s call for more qualified independent directors on industry super boards, while others will cite the need for a binding code of conduct and stricter regulation by APRA and the Australian Securities and Investments Commission of how trustees spend money.

We would add greater transparency to those investing in industry super funds over what is done with their money, and increased recourse for those consumers when they feel standards are not being met.

The experience of CBUS, where an objectively damaged organisation in the CFMEU has retained its nomination rights, unfettered by a voice for the members, is vexed country.

Some, such as the Governance Institute of Australia, have called for years for superannuation members to have similar rights to investors in a publicly listed company to vote directors on or off boards. APRA’s fit and proper test is a poor substitute.

Labor has staunchly defended the industry-fund model of equal representation for unions and employer groups. In opposition, it twice blocked attempts by Coalition governments to mandate independent directors.

CBUS chairman Wayne Swan (an “independent director”, it should be noted) told a parliamentary inquiry in 2024 – his board still in flux in the wake of the CFMEU’s implosion – that the model was a key to the sector’s success.

He defended, among other things, the millions of dollars paid to the CFMEU and other unions for services he insisted were commercially founded and the holding of a 40th birthday party for the union in a Melbourne theatre.

Whether or not members agree that all this served their interests we cannot know, because they are never asked in a meaningful way.

Swan told the committee that he was paid $210,000 a year to chair the fund. Again, there is no way of knowing if members are happy with either that amount or his performance.

The industry-fund board model looks increasingly quaint against the backdrop of their enormous growth and their centrality to the savings of many Australians.

CBUS is just one example. It is past time that members were given more say in who manages their money.

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