ASX Consults on New Governance Principles

Last week, the Australian Securities Exchange (ASX) announced a public consultation on the fifth edition of its Corporate Governance Principles and Recommendations.

The draft was developed with input from ASX’s Advisory Group on Corporate Governance, chaired by Philip Lowe, former Governor of the Reserve Bank of Australia (RBA). “The 5th edition seeks to refine — but not redesign — the existing framework,” Lowe said. It retains the eight high-level Principles — which cover management oversight, board effectiveness, ethical culture, corporate reporting, disclosure, security holder rights, risk management, and remuneration — while simplifying the framework and updating it for changes in governance practice and law since 2019. 

The draft also preserves the “if not, why not” approach, allowing listed entities to adopt the Recommendations or develop and explain other governance practices that satisfy the relevant Principle. Gavin Skene, Acting Group Executive Listings at ASX, said the architecture of the eight Principles continues to receive broad market support. Proposed changes include simplifying the treatment of director and executive remuneration and placing greater emphasis on diversity of thought, experience, and perspective in board composition. 

The revised Principle 3 clarifies the board’s role in shaping and overseeing culture. Boards would be expected to approve the entity’s values and code of conduct and receive reports of material breaches of key policies. The proposal also emphasizes the importance of reinforcing a culture consistent with the entity’s values, strategy, and risk appetite. Entities would be expected to disclose “the monitoring mechanisms the board has in place to oversee the entity’s culture,” in order to support confidence and trust in their governance arrangements.

Written submissions are due September 14, 2026. The Advisory Group will provide recommendations to the ASX Board by the end of the year.