New ASX Principles demand better corporate culture, ethics, diversity and environmental risk reporting
Aims to address community demands for greater accountability and transparency following events such as the Banking Royal Commission.
Wednesday, 27 February 2019 — Following extensive consultation, the Fourth Edition of the ASX Corporate Governance Council’s Corporate Governance Principles and Recommendations was released today, providing updated guidance for ASX-listed companies reporting on corporate governance, such as culture and ethics, workplace diversity and environmental risk.
‘Nothing is ever created in a vacuum, and since the 2013 Third Edition, disruptive events like the Banking Royal Commission, the Intergovernmental Panel on Climate Change’s 2018 Report, and the National Inquiry on Workplace Sexual Harassment have highlighted the difficulties companies have reporting on ‘non-financial’ achievements to shareholders, and the public at large, who are increasingly demanding accountability in these areas,’ said Megan Motto, CEO, Governance Institute of Australia.
‘The process of consultation for the Fourth Edition has been very robust, and we feel it now has a good balance between addressing wider community expectations around corporate behaviour, and providing market-based certainty for investors.’
‘It has been a privilege working with the ASX, our members and our drafting committee partners to drive this focus on better corporate governance disclosure. After much debate, we are pleased that a number of our recommendations have been incorporated into the final document.’
In particular, the Governance Institute has campaigned for key Fourth Edition additions to the ‘Culture and Values’ section (Principle 3), including the disclosure of company values and company whistle-blower policies. These exist alongside updated principles and recommendations for reporting on workplace diversity (especially board diversity), environmental sustainability and other risks.
The ASX will also continue to require ‘if not, why not’ explanations for any companies not reporting to these specifications.
‘The Fourth Edition is also an excellent guide for any company looking to develop, measure and reinforce good governance frameworks in their business. The Governance Institute considers reporting in line with the Fourth Edition to be ‘best practice’ for all Australian businesses, whether listed or not.’
The Governance Institute Of Australia is a founding member of the ASX Corporate Governance Council, and a member of the Council Drafting Committee for the Principles and Recommendations.
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ASX Communique on Principles and Recommendations
ASX Corporate Governance Council’s Corporate Governance Principles and Recommendations (Fourth Edition)