The latest round of consultation on the fourth edition of the Corporate Governance Principles has created enough of a stir that the ASX Corporate Governance Council has felt the need to defend itself.
What is usually a relatively behind-the-scenes process has become public, largely thanks to the announcement by new AMP chairman David Murray in the Fairfax press that he will not be adhering to the principles.
In a statement released yesterday, ASX Corporate Governance Council chair Elizabeth Johnstone said that “much of the commentary” misses the point that the current document is a consultation draft, not a “final or fixed position”.
“It is appropriate and important that a consultation draft explore new ideas and test boundaries,” Ms Johnstone said.
“It is wrong to label the consultation draft as the work of ‘left-wing activists’ or ‘social engineers’. It is the work of those who invest in, raise capital from and provide professional support for the market.”
The ASX Corporate Governance Council said the materials on “social licence to operate” have caused the most concern among stakeholders.
“The council will listen carefully to the concerns that have been raised about the term ‘social licence to operate’ and consider how best to express and address this issue in the course of preparing the final version of the fourth edition,” Ms Johnstone said.
Ms Johnstone also explicitly rejected the suggestion made by Mr Murray in the Fairfax press that the Principles and Recommendations had caused the problems discussed in the royal commission.
The chair said: “The suggestion some have made that the Principles and Recommendations have contributed to the egregious behaviour revealed by the Hayne royal commission is simply wrong.
“Similarly, the suggestion some have made that the Principles and Recommendations have contributed to boards being inundated with thousands of pages of board papers is also wrong.
“The council is firmly committed to retaining this framework and the primacy of boards in setting appropriate governance arrangements for their listed entities.”
