ASX body abandons controversial governance proposals
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The news: The ASX Corporate Governance Council has decided to end consultation on proposed new governance standards after stakeholders failed to endorse them.
What they said: Chair Elizabeth Johnstone said after an informed discussion with stakeholders, it would no longer pursue the implementation of its proposed fifth edition of governance principles.
"It is clear, from the range of views expressed during the consultation, that achieving broad consensus on a suitable Fifth Edition would not be possible at this point in time," Johnstone said.
ASX managing director Helen Lofthouse endorsed the decision to ditch the process as necessary to provide clarity for listed companies.
“The Fourth Edition of the Principles and Recommendations has been in place since 2019 and is a widely accepted, well-understood and utilised guide for listed entities and we’re supportive of the decision for it to remain in place at this time," Lofthouse said.
The context: The proposals had divided the market, with some stakeholders pushing for the disclosure of directors' sexual orientation, religious beliefs racem and socio-economic background.
Other proposals on the table included a requirement to have at least 40% women on any ASX 300 board, measurable and timely diversity targets, as well as increased transparency around director skill assessments, auditors, and breaches of a company's code of conduct.
The Governance Institute of Australia lamented that the proposals had lacked broad support and would have unnecessarily overburdened ASX boards.
'It’s important not to underestimate how any inclusion in the document sets an expectation for listed companies, big and small, adding significant cost and complexity to governance practices," CEO Megan Motto said.
The source: ASX Corporate Governance Council Release
