The Australian Securities Exchange (ASX) will disband its corporate governance council after a failed attempt to overhaul reporting rules earlier this year. The move follows an independent review that concluded the council’s structure was cumbersome and unable to reach consensus among its 19 members. The ASX will now assume primary responsibility for establishing guidelines on critical governance issues.
The current council, which includes representatives from business, investor, and superannuation groups, has been criticised for being dysfunctional. One major point of contention was a proposal to expand diversity reporting requirements for boards, including characteristics beyond gender. The Australian Institute of Company Directors (AICD) has supported the ASX’s decision, stating that the existing structure needed significant reform. The AICD believes this provides an opportunity for relevant parties to develop balanced governance principles.
In place of the council, the ASX will establish a secretariat overseen by a smaller advisory group of six to ten members. This group will hold regular meetings to address emerging governance issues and conduct formal reviews every four years, a change from the current ad hoc approach. The advisory group will consist of experts in governance and investment, such as superannuation fund chairs, experienced directors, and investment managers.
ASX CEO Helen Lofthouse thanked the individuals who contributed their time and expertise to the corporate governance council over the past two decades. The Business Council of Australia has also welcomed the report and plans to consult its members on ways to improve corporate governance practices. The Australian Securities Exchange provides listing, trading, clearing, settlement and technology services to financial markets, as well as data, analytics, and post-trade services. It facilitates capital raising, investment and risk management.
