- Consultation on the fourth edition of the Australian corporate governance principles and recommendations
- Significant changes are proposed to principle 3 – acting ethically and responsibly
- CA ANZ would welcome input into its submission.
Consultation on Fourth Edition of Corporate Governance Principles and Recommendations
The ASX Corporate Governance Council (the 'Council') is consulting on proposals to update and issue a fourth edition of its Corporate Governance Principles and Recommendations (the 'Principles and Recommendations'). Chartered Accountants Australia and New Zealand are members of the Council and will be making a submission as part of the consultation.
The Council’s communique notes "While the standards of corporate governance in Australia remain high by international standards, the Council recognises the need to regularly assess and evolve the Principles and Recommendations to address emerging domestic and global issues in corporate governance."
In May 2017, the Council resolved to commence work on a fourth edition of the Principles and Recommendations to address a number of such issues, including:
- social licence to operate;
- corporate values and culture;
- whistleblower policies;
- anti-bribery and corruption policies;
- an apparent slowing in the rate of progress in achieving gender diversity at board level;
- a recommendation from the Senate Economics References Committee for increased guidance around carbon risk;
- cyber-risks; and
- other areas for improvement identified by KPMG in a review commissioned by the ASX Education and Research Program on the adoption of the recommendations in the third edition of the Principles and Recommendations.
The Council’s proposed changes anticipated and respond to some of the governance issues identified in recent enquiries, such as the Hayne Royal Commission.
The consultation draft retains the same eight core principles in the third edition, although the Council is proposing to make significant changes to principle 3 (a listed entity should act ethically and responsibly) to address emerging issues around corporate values and culture, and social licence to operate. It is proposed to re-word this principle as “a listed entity should instil and continually reinforce a culture across the organisation of acting lawfully, ethically and in a socially responsible manner”.
The Council proposes to expand the number of recommendations from 29 in the third edition to 38 in the fourth edition. The new recommendations and their rationale are explained in the consultation paper.
Submissions on the consultation paper are due by 27 July 2018 to the Council. Chartered Accountants ANZ would also welcome input to its submission prior to 14 July via the email address below.
Access the consultation package
The Council’s consultation package is available on their websiteRead more
Would you like to enter a submission?
Provide input to CA ANZ’s submission via email by 14 July 2018Details here