The fourth edition of the ASX Corporate Governance Council’s Corporate Governance Principles and Recommendations has been released.
The new principles provide 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,” Governance Institute of Australia CEO Megan Motto said.
“The process of consultation for the fourth edition has been very robust, and we feel 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.”
A founding member of the ASX Corporate Governance Council, The Governance Institute has campaigned for key fourth edition additions to the ‘Culture and Values’ section, including the disclosure of company values and company whistleblower 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,” Ms Motto said.
“The Governance Institute considers reporting in line with the fourth edition to be ‘best practice’ for all Australian businesses, whether listed or not.”
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