Submission to the ASX Corporate Governance Council on proposed Principles and Recommendations

This is the Business Council’s submission to the review of the ASX Corporate Governance Principles. The Principles and Recommendations have served corporations well to date. The Business Council is supportive of their role, particularly in assisting boards with their disclosure obligations but has some concerns with proposed changes.

Our main comments on the draft Principles and Recommendations can be summarised as follows:

  1. The Principles and Recommendations should not attempt to prescribe corporate culture.
  2. The scope of obligations on directors has been broadened well beyond their key legal obligations.
  3. There is ambiguity about the meaning of social responsibility and”social licence to operate” in Principle 3 and the accompanying recommendations.
  4. There is over-prescription within the recommendations and associated commentary. An “if not, why not” approach to reporting on such a level of prescription will lead to the recommendations being regarded as minimum standards to be reported upon.
  5. Some of the recommendations duplicate or potentially conflict with existing legal obligations.