How Michael Dwyer’s super journey left its mark

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by Greg Bright

Michael Dwyer is stepping down next month after an illustrious career in the superannuation industry. In a lot of ways that career – including running two super funds, starting an association and active industry participation – mirrors the industry’s modern history. Here are some highlights and observations.

Big multi-employer super funds are not simple businesses. When Michael Dwyer became the first chief executive officer of the NSW-based multi-employer fund, ASSET Super, in 1994, stakeholders included the Chamber of Manufactures of NSW, the Labour Council of NSW and the Employers Federation of NSW. While it had only $100 million under management at the time, Dwyer recalls that the members operated under 95 different industrial awards.

Growth didn’t come easy for ASSET. Unlike single-industry funds, it had to advertise widely for members. Dwyer had been the first marketing manager for the State Authorities Super Board then became involved with a NSW Tourism business which SASB owned. At ASSET, he pioneered radio advertising for members and employers and was constantly on the lookout for cost-efficient marketing opportunities.

He recalls being interviewed for the ASSET job by chairman, Warren Adcock, owner of the King Gee family clothing group and keen sailor, with whom he was to have a long and very close relationship, and Mark Lennon, a prominent identity within the NSW Labor Party who went on to become secretary of Unions NSW.

“During the first job interview, Warren surprised me by asking about my family and values,” Dwyer says. “Some people have said ‘We became like a father and son team’. Michael recently attended the 90th birthday party for Warren – called ‘Skip’ by most family members – fittingly at the Royal Sydney Yacht Squadron.

Dwyer says: “I believe the most critical relationship for the senior management team of an organisation to have is that between the chief executive and the chair. And over time it should become a most trusted relationship.” Warren Adcock is a charming and gregarious gentleman who regularly attended industry events with Michael. They seemed like salt and pepper shakers or bookends: two peas in a pod.

We'll get back to work soon - Baldwin and Dwyer

We’ll get back to work soon – Baldwin and Dwyer

Dwyer is a strong advocate of the equal representation model for industry super fund boards although he admits the current Federal Government’s proposal, currently on the backburner, for “a third, a third, a third” – meaning equal representation between trade unions and employer groups with one-third truly independent – has merit. “Equal representation harnesses both sides of the industrial equation. In my experience all directors, regardless of background, leave their hats at the door and genuinely work to achieve outcomes that are in the best interests of members.”

He was used to politics by the time he got to ASSET and then First State Super. He had previously also worked for the Department of Industrial Relations at the federal level. He attended the first CMSF in Wollongong, in 1992, which opened his eyes to what was happening in the wider super industry.

When the much-bigger job as chief executive of First State Super was advertised in 2004, Warren gave Michael his blessing to go for it. When he left ASSET it had approximately $1 billion under management and it eventually merged with Care Super in 2012.

“I had been at ASSET for 10 years and had just turned 50. If I was going to make a move it would have to be soon, so I spoke to Warren and he gave me his support,” Dwyer says. Now, at 64, he is embarking on a different challenge. He was recently appointed chair of Australia for UNHCR, the UN Refugee Agency’s national partner in Australia  , after years of support for the organisation as a director.  He also plans to spend more time with his wife Janelle and their six grandchildren.

It wasn’t only at the Department of Industrial Relations nor at ASSET that Michael honed his political and leadership skills. He was the first chair of the Fund Executives Association Ltd, which was formally launched in 1999 but had had a two-year gestation of meetings and more meetings, business plans and revised business plans and sensitive discussions with other established industry bodies such as AIST, ASFA and the FSC.

Associations are complex organisations too. While in theory they represent like-minded people under the umbrella of common interests, they can also end up with more factions than a political caucus.

At the outset, the other organisations were concerned that FEAL would become another lobbying group, something the small band of fund chief executives who formed the initial interim board, were dead against. It was to be a group which allowed senior executives of super funds to compare notes, to perhaps sponsor research, to encourage the development of executives and staff within superannuation and to, after a few years, become an educational body. To the chagrin of Michael Lillicrap, the maverick chief executive of REST and one of the key initial directors, it was not to be a “luncheon club” for chief executives either.

It was Lillicrap who was elected to tell the late Mavis Robertson, the formidable founder of AIST, of the plans to form FEAL, something which no-one was keen to do. In fact, Fiona Reynolds, who later became AIST’s chief executive and now the global head of UNPRI in London, initially referred to FEAL as “the CEO’s union”. That was another reason for FEAL’s formation: ASFA represented funds, AIST represented trustees and FSC represented fund managers and, later, insurers. FEAL became a unique organisation in the pension fund industry around the world.

Dwyer, who went on to be awarded a FEAL “Fund Executive of the Year’ award in 2012, says of FEAL: “I feel a great deal of pride in this organisation and what it has achieved for our industry and ultimately the fund members that we all serve: the industry’s first post-graduate qualification; awards and scholarship programs that support professional learning and an annual event program that brings fund executives together to share insights and hear from expert thought leaders.”

Just a year earlier, in 2011, Dwyer was named a Member of the Order of Australia for his service to superannuation through leadership roles and also to the broader community, in fact the international community, through his work with Australia for UNHCR. He had also been active within ASFA as a director, committee member and chair of the NSW division.

With his initial stint as FEAL chair he did all the hard work of overseeing the establishment of the association, with the help of EquitiLink marketing manager, Vanessa Stoykov, and her boss, the EquitiLink chief executive, Ouma Sananikone. Basically, from EquitiLink’s perspective as initial sponsor, committing more than $100,000 in cash and kind, Vanessa did the work and Ouma found the money. It’s a lot more difficult to start an association than a company.

At First State Super, at the time the smaller defined contribution cousin of the closed State Super (STC) defined benefit fund, Dwyer’s first big challenge was to take the fund “public offer” to promote further membership growth. He accomplished this in 2006, requiring an amendment to an Act of the NSW Parliament. At the time, First State Super had just 12 staff and about $9 billion under management. Now it has 1,000 staff (including StatePlus) and $93 billion in the assets of its 800,000 members and clients.

The fund had been created in 1992, coinciding with the start of the Superannuation Guarantee, which provided universal coverage – not just for those working under awards. Award Super was introduced in 1986 under the famous “Industrial Accord” between the Labor Government and the ACTU, but the Hawke-Keating Government saw its limitations, as did Garry Weaven and Bill Kelty, the two most senior advocates at the ACTU.

The membership of the fund expanded after gaining public offer status, not only among the families and friends of the many NSW Government departments including the very significant Education and Health departments whose employees were already attracted to the fund’s offerings. Dwyer then saw an opportunity in 2010 to enhance the fund’s scale benefits further and worked with the board and its then-chair, economist Dr Tom Parry, to pursue merger negotiations with Health Super. A merger was announced later that year and completed in 2011. The transition was helped along because Dwyer and Chris Clausen, the Health Super chief executive, knew each other and were on good terms. Clausen became deputy chief executive of the merged fund for a time and then moved to the Victorian Treasury.

Dwyer says that Health Super wanted to be part of a bigger player to benefit its members and to enable this to happen was prepared to accept a reduced number of board positions. “Also, we both wanted to do business with people we knew and trusted,” he says, which is a trademark character trait. “We had nearly 12 months of discussions. They did a lot of homework and Michael Rice [of Rice Warner actuaries and consultants]did a presentation for all of us about the benefits.”

Dwyer’s relationships tend to last a long time and follow him around the industry. For instance, Neil Cochrane is the current chair of First State Super. He was the first ‘independent’- non super fund executive – chair of FEAL in 2010, although he was also the independent chair of the Commonwealth Bank’s staff fund, and had previously been the chief executive of REST. Dwyer met Michael Baldwin, who then worked for ASFA, through his own involvement with that association. When the time came, he and the FEAL board offered Baldwin the job of FEAL CEO. Baldwin ran the association on a day-to-day basis for 12 years before a stint as assistant director at the National Gallery of Australia in Canberra. When he returned to Sydney full-time, he was persuaded to join First State Super to establish a corporate affairs division.

Baldwin has also assisted in Dwyer’s work at Australia for UNHCR and in his role as director of the Sydney Financial Forum.

The word goes in the industry that if the two Michaels come to see you about something, perhaps to ask for help or funding for whatever project, there is no point in resisting – you try not to sigh, say ‘sure’ and ‘where do I sign?’ It’s a lot quicker that way.

Back to the First State Super story, Dwyer’s first CIO hire was Mark Sainsbury, who had been CIO of NSW’s Local Government and Energy Scheme and had a reputation for taking bold decisions on currency, which he liked to actively manage himself. His track record was very good.

One of Sainsbury’s referees was John Nolan who had worked with Dwyer as asset consultant at ASSET Super, when Nolan still controlled JANA. He phoned Nolan and with only a minute or so of pleasantries – which is uncharacteristic of Michael – he said Sainsbury’s recent performance had been very good and was it a result of skill or just good luck? Nolan responded with words to the effect “yes, he’s been lucky for about 10 years!”.

As it turned out, Sainsbury was an excellent defensive investor as well. First State Super was the number one performing super fund during the most difficult 12 months of the global financial crisis.

Perhaps Dwyer’s last significant decision at the fund was to acquire the State Government’s financial planning and wealth management business, State Super Financial Services (now called State Plus), for which it paid a reported $1 billion in 2016. Following the acquisition, Dwyer’s former deputy, Graeme Arnott, was appointed CEO of StatePlus and StatePlus CIO, Damian Graham, moved across to First State Super. Graham now manages the combined investments of both organisations.

As a result of the acquisition, First State Super members can now access a network of over 200 financial planners located in offices across Australia. “We now own the largest profit-to-member financial planning network in Australia. The right service and advice changes lives and our members now have the comfort of knowing we are here to support them throughout their careers and into retirement” Dwyer said.

The role of chief executive which Dwyer’s replacement, Deanne Stewart, is taking on, is a lot bigger and more complex than the one he took on back in 2004.

On his future Dwyer admits it is a “bitter-sweet” time for him in his career. “I will certainly miss the people and the challenge,” he says. “I think I am leaving First State Super in a strong position and I know Deanne Stewart to be a person of vision and talent.  She is well positioned to lead the organisation forward.”

Known for his Christian faith, Michael referenced his favourite passage from Jeramiah: ‘For I know the plans I have for you, declares the Lord. . .  to give you a future and a hope.’ Dwyer remarked: “I believe there is a purpose and a plan for each one of us. I am grateful for the time I’ve had in our industry, for the wonderful people I’ve worked with and all that I’ve experienced and learned. I am looking forward to the next season of my life and the challenges and opportunities that it will bring.

In the first week of December Dwyer is spending a week at UNHCR’s headquarters in Geneva with  Australia for UNHCR’s national director, Naomi Steer. His new role as chair is a three-year appointment and involves a number of visits to refugee camps, something he would have had limited time for while running a big super fund.

In closing, Dwyer was asked about the most significant thing he had learned from his journey in the super industry.  He replied: “I don’t care how much you know until I know how much you care.”

As an end note, that sums up the mark of the man.

*photography by Hayden Brotchie

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