Australia: New edition of the ASX Corporate Governance Principles and Recommendations

The Corporate Governance Council of the Australian Securities Exchange has today published the fourth edition of its Corporate Governance Principles and Recommendations: see here (pdf). Also published by the Council are the following: communique (pdf) | consultation response (pdf) | a marked-up copy of the fourth edition compared with the consultation version (pdf) | a marked-up copy of the fourth edition compared with the third edition (pdf).

The Principles and Recommendations will operate on the basis of "if not, why not" - "comply or explain" in other words. In its consultation response, the Council notes that the most polarising issue (its words, not mine) was the proposed introduction of the term "social licence to operate". This term was used, the Council states, "as shorthand to convey the notion that a listed entity’s long term sustainable success is dependent on maintaining the trust and goodwill of the various social groups with which it interacts" (p. 4). This term does not appear in the fourth edition but has been replaced with references to terms the Council regards as synonymous - "reputation" and "standing in the community" - which it is believed are more likely to be better understood and more consistently applied.