Governance principles for listed companies are undergoing a refresh. Boards must also consider new foreign bribery laws and the AICD’s climate governance guidance. 

    Updated ASX guidelines

    One of Australia’s key governance frameworks, the ASX Corporate Governance Council’s Corporate Governance Principles and Recommendations, is being updated with public consultation underway.

    The principles, introduced in 2003, provide flexible, industry-led guidance on governance standards. A draft fifth edition has been released, with public consultation continuing until 6 May.

    Listed companies are required to report annually on their adoption of the principles on an “if not, why not?” basis, which recognises that different companies (under the leadership of their board) will legitimately adopt different governance approaches based on a range of factors.

    The AICD is a member of the ASX Corporate Governance Council and has a strong interest in the principles, both for listed company governance and as a watermark for good governance.

    The draft update retains the structure of the current guide, with eight core principles, 33 recommendations (down from 35) and supporting commentary. Several recommendations have been removed due to their overlap with growing governance laws and regulation.

    Consistent with local and global developments, the draft fifth edition includes new or revised recommendations covering:

    • A company’s relationship and engagement with its stakeholders 

    • Board composition and capabilities to oversee business success

    • Accountability and transparency for corporate conduct and breaches

    • The importance of board and workforce diversity, including recommendations for gender balance in board composition for ASX 300 companies.

    The draft has not added new layers to climate or sustainability reporting, and a broader view is proposed to support companies disclosing “material risks” (including ESG risks) over the short, medium and longer term.

    Remuneration recommendations include clawbacks on senior executive performance-based pay and a stipulation that clawbacks be disclosed on a de-identified basis.

    The current timeline proposes a final fifth edition in early 2025, with entities reporting for financial years commencing on or after 1 July 2025.

    The AICD will provide a detailed submission and is keen to hear from members on these key proposals in order to ensure that director views are adequately reflected in our response (email

    New foreign bribery laws

    Long-awaited changes to Australia’s foreign bribery laws will commence later this year with the recent passage of the Crimes Legislation Amendment (Combatting Foreign Bribery) Bill 2023 (Cth).

    The new offence applies to all sectors and includes listed companies, government entities and not-for-profits (incorporated associations and companies limited by guarantee). We encourage boards to take note of the changes, penalties and lower bar for prosecution.

    The law creates a strict liability corporate offence for “failing to prevent bribery of a foreign official by an associate” and attracts penalties of $27.5 million or higher. An “associate” can include an officer, employee, agent, contractor or a subsidiary of an entity.

    The new laws shift the way organisations can be prosecuted. It will no longer be necessary to prove that a bribe was authorised or that the company intended for the bribe to be paid. The definition of “associate” is also much broader.

    The only defence available is if a company can show it had “adequate procedures” in place to prevent the bribery offence, which makes it very important to have documented, strong internal procedures in place.

    The AICD and other stakeholders supported the new “failure to prevent offence”. However, it strongly recommended that a Deferred Prosecution Agreement (DPA) scheme be included in the law. A DPA scheme would incentivise corporations to self-report bribery misconduct when detected and would align with laws in the UK, US, Canada, France and Singapore. A DPA scheme was in earlier iterations, but was omitted from the final bill.

    A statutory review mechanism has been added to review the laws within 18 months and the AICD will continue to call for a DPA scheme. The new laws will commence later this year.

    Gender pay gap transparency

    The Commonwealth Workplace Gender Equality Agency has published the gender pay gap data of organisations with 100 or more employees. It has also developed a guide to help boards realise their role in accelerating change in workplace gender equality. Next year, the public data will include the salaries of CEOs and heads of business with average, not just median, salaries.

    New climate guidance

    The AICD has released a second climate governance study, which draws on a national survey of more than 1000 members and interviews with senior non-executive directors.

    Produced with Pollination Group, the Climate Governance Study 2024: Moving from vision to action finds that Australian directors are focusing on climate change, but face growing challenges in executing strategies. Directors reported a high level of concern about climate-related risks. The need for stable policy settings that support long-term investment is a clear message to government.

    To provide actionable insights for AICD members, the report sets out better governance practices and includes recommendations for directors, policy makers and investors.

    Insights from the study will inform the AICD’s advocacy for well-targeted regulation on climate, including climate reporting, a current priority for our policy team. 

    Louise Petschler GAICD is General Manager Education & Policy Leadership at AICD.

    Practice resources — supporting good governance

    Examples of the AICD’s contemporary governance practice resources for members:

    Cyber incident report

    • The AICD’s new Cyber Incident Response Guide, developed with the Cyber Security Cooperative Research Centre and Ashurst, provides guidance for directors and boards dealing with a cyber incident.

    Governing for quality aged care

    • This new director guide covers recent reforms and practical steps for aged care directors and boards.

    Best interests duty

    • The AICD’s legal opinion (Bret Walker AO SC and Gerald Ng MAICD) and Practice Statement guide directors on their duty to act in the best interests of their organisation.

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