“Hindsight is a powerful thing.”

Just before AustralianSuper went public with its Russia plan, the federal government made the unprecedented step of calling on the $3.5 trillion sector to support international sanctions by dumping Russian assets. “They didn’t direct. But they got pretty close to directing,” Schroder says.

Schroder stresses his decision to divest was made prior to the government’s intervention, but worries about the precedent that it could set. Last year, a parliamentary inquiry heard Queensland MP George Christensen considered forcing Australian financiers to fund thermal coal and other fossil fuels.

“It’s dangerous and it’s ridiculous for governments of any persuasion at any level to say what funds should be investing in or not,” Schroder says. “A person joining at 20 [years old] today, they’re going to be with the fund at 90. There might be 25 federal treasurers between now and then. Not one of them should touch a members’ super balance.”

AustralianSuper's board has now asked management to put together a dossier to better prepare the leadership for the next geopolitical meltdown. “What have we learnt? What is the playbook if we have to do it again? Most things held up but there’s definitely things we can learn.”

But Schroder refuses to be drawn on parallels with China – an autocratic country that has made no secret of intentions to “reunify” Taiwan.

“I’d be very cautious about drawing that connection. China is a very, very important trading partner. There are a lot of Chinese who live in Australia. There’s a very strong and deep relationship between the two.”

Around 5 per cent of AustralianSuper’s assets are invested in China, with stakes in technology giants Alibaba and Tencent and controversial companies like China Mobile, sanctioned by the US over national security concerns. Schroder’s outlook for China remains unchanged.

“We were happy to move in relation to Russia because of all of the obvious things. It was un-investible. China remains investible. We invest there and we have an office there.”

AustralianSuper’s new CEO

Schroder’s extensive interview with The Age and Sydney Morning Herald takes place in AustralianSuper’s new office in Charter Hall’s flash new development at 130 Lonsdale Street.

On the thirtieth floor, the design is modern and slick with a view from Melbourne’s skyscrapers stretching out to the Dandenong Ranges.

The lease was signed just before the coronavirus pandemic hit and remains largely empty though Schroder insists he has no regrets about taking on the extra space.

Before entering super, he climbed the ranks of the Finance Sector Union where he became national secretary. His proudest achievement was changing the balance of power towards members, campaigning for decent pay and safe conditions, while making the union commercially viable.

Schroder says the industry super sector is motivated by a similar ethos to unions, promoting “the interests of working people to make sure they have a much better current and future”.

He was appointed AustralianSuper chief executive in October 2020, taking over from Ian Silk who had been in the role for 15 years. The promotion came just as the board had signed off on a three-year strategy to expand globally and reach $500 billion in funds under management by 2026. An internal replacement was seen as the best way for the fund’s strategy to be realised but Schroder is bringing his own approach to the job.

One of the first decisions he made as CEO was to stop AustralianSuper members from being automatically signed up to the newsletter of media outlet, The New Daily.

While Schroder was the fund’s first chief risk officer, he completed a full synopsis of the threats facing the business. Data security was one of key risks identified, which informed his decision to stop members being opted-in to The New Daily.

“Peoples’ data is very important. We take that very, very seriously. So absent compelling evidence to do it, I made the decision,” to opt-out members, he says.

The other major risks identified include cybersecurity, liquidity and governance but Schroder says the most important is culture. “If I look at organisations that fail or have major problems, they’ve usually been culture and conduct related.”

Like many, Schroder spent much of the pandemic working from home, under the same roof as his wife and four children. His wife works in child health and needed the spare room, leaving Schroder to lead the country’s largest super fund from a desk in their bedroom. “A slightly inferior position,” he says.

Schroder struggled with maintaining work-life balance during COVID-19 but says he now wants to ensure AustralianSuper is an employer where family life is valued and flexibility is here to stay.

He’s trying to lead by example. This week, Schroder was scheduled to visit the fund’s London office to meet the UK team but delayed the trip by three days so he could stay in Australia for his son’s nineteenth birthday.

AustralianSuper also has offices in Beijing and New York. A key pillar of AustralianSuper’s strategy is to bring investment management in-house, saving members money by reducing the firms clipping the ticket on the investment process.

But Schroder says the experience with Russia has taught him the importance of having local investment knowledge. “You need to be on the ground and understand those markets well.”

It’s a precarious time to be expanding globally, with rising inflation and cascading humanitarian crises combining to heighten geopolitical uncertainty during a time Australians have never been so engaged with their super.

Climate change is a major risk for the fund, and an issue its members are keenly engaged on. Unlike other major industry funds, AustralianSuper does not screen out investments in thermal coal or other fossil fuels but Schroder says the exposure to this sector has naturally declined as the business case increasingly fails to stack up. While the Russian oil and gas ban is sending coal, oil and gas prices soaring, Schroder is certain the surge is short-term rather than any permanent derailment of the green energy transition.

“The simple economics is renewables are becoming cheaper and cheaper, and fossil fuels are booming more and more expensive,” he says.

While Schroder navigates these challenges amid an increasingly uncertain environment, he remains focused on one piece of advice from his predecessor:“Big things and small things, local and global, it’s always one members’ account you’re talking about.”