Facing a grilling at the House of Representatives Standing Committee on Economics today, IOOF chief executive Renato Mota said the firm's former complex organisational structure was responsible for additional risk.
Asked by Labor MP Daniel Mulino whether IOOF's super business had a more complex structure than other superannuation funds, Mota agreed, and said the firm was moving towards a simpler structure to reduce cost and risk.
"Organisations like ours have been managed in a way where different entities have been interwoven, and the conflicts were managed," Mota said.
Mota said IOOF would no longer seek to manage conflicts when it came to related party transactions, but rather to eliminate them entirely through a series of structural changes.
"We had a more complex structure than an organisation whose only role was to be a superannuation fund," Mota said.
"We are eliminating conflicts. What we're saying is we are eliminating those conflicts [raised at the Royal Commission]. Those conflicts will not exist going forward. But where I completely agree with you is that complexity equals risk and cost.
"I think as an industry - and certainly our focus has been - we want to remove that complexity from our own business, to ensure that we have a greater clarity about what we're delivering, why we're delivering it, who's receiving it and what the benefit is, and we can do that more efficiently."
Under questioning by committee chair Tim Wilson, Mota was asked about IOOF's transition to better governance standards, with Wilson noting the recent departure of Amanda Noble will see IOOF appoint its third chief risk officer in six months.
"Does that suggest that there's a very serious issue organisationally and culturally, or does it suggest that you're unable to find people who conform to the organisation's culture?" Wilson asked.
Mota said his view was that the firm was holding itself to a higher level of accountability.
"In some ways I don't envy being here now having had to make a change to our chief risk officer," he said.
"But our view is that the next phase of our development with respect to the uplifting of our governance required a different type of leadership, and we're committed to making sure we find that.
"We're not going to settle for second best."