Governance Institute of Australia welcomes release of major corporate governance report but concerned at underreporting on climate risk and diversity stagnation
A major report examining how organisations are tracking against a key set of governance principles has been released revealing underreporting on key risks including climate change, and a stalling on diversity initiatives.
Governance Institute of Australia welcomed the analysis by KPMG of how companies are performing against key elements of the fourth edition of the ASX’s Corporate Governance Principles and Recommendations. However, it says the findings serve as a reminder that all organisations need to be making a sustained effort to report on – and address – some of the most significant challenges of our times.
Using data from around 600 ASX listed entities, the reports examine outcomes for categories including culture and ethics, workplace diversity, and environment/sustainability risk.
As well as an overarching report, in-depth analyses of results for the issues of diversity and social and environmental risks have also been released.
The reports found that 25% of companies reported they have no material environmental and/ or social risks, which KPMG states is “unlikely”. It also revealed only a 1% growth in the disclosure of diversity policies over the last six years and a “largely stagnant” proportion of females in senior executive positions.
Governance Institute is a founding member of the ASX Corporate Governance Council and a member of the Council Drafting Committee for the principles and recommendations.
Governance Institute Chair Pauline Vamos said the Corporate Governance Principles and Recommendations provide an excellent best practice guide on a range of key issues, but also serve as a reminder that organisations need to stay proactive on all key issues.
“Having a set of external standards is essential for organisations to develop, measure and reinforce good governance reporting principles, whether listed or not,” Ms Vamos said.
“The examples of good practice reporting will also assist companies looking to improve their practices and disclosures.
“But there is certainly no time for stalling on issues such as ESG and diversity – as has been shown to be the case in these reports. We want to see high levels of action and transparency on these critical issues.”
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About Governance Institute of Australia
A national membership association, advocating for a community of more than 43,000 governance and risk management professionals from the listed, unlisted and not-for-profit sectors. Our mission is to drive better governance in all organisations, which will in turn create a stronger, better society.