In May this year, public consultation closed on the draft fifth edition of the ASX Corporate Governance Principles, which sets a new benchmark for publicly listed companies in evaluating their internal governance processes. There are a few big changes from the fourth edition which was published in 2019, and even if your business isn’t listed on the ASX, they are a useful source to see what the regulatory focus is at the top end of town.
There are two overarching themes to the draft changes:
- one, a shift in expectation that listed companies will focus on “long-term, sustainable value” for their shareholders rather than short-term windfalls; and
- two, an expansion of the key stakeholder interest groups that listed company boards are expected to consider when making decisions – these include shareholders but also employees, customers, suppliers, the local community and local Aboriginal and Torres Strait Islander peoples.
These two elements have been woven through a number of amended and new recommendations – we have summarised a few of these big ticket changes below:
The ASX is currently sifting through the responses to its public consultation, but the fifth edition of the principles is anticipated to be issued in early 2025 to apply to listed companies for financial years commencing after 1 July 2025. Combined with the new sustainability accounting standards and reporting requirements, 2025 will mark a substantial shakeup in corporate disclosure obligations – if it affects you and you want to get on top of the new requirements, get in touch.
