A newly formed corporate governance body within the Australian Securities Exchange (ASX), chaired by former Reserve Bank of Australia governor Philip Lowe, has committed to simplifying governance rules for listed companies. The group aims to reach an agreement on the revised rules by the end of the year. The move follows the dissolution of the previous 19-member council due to disagreements over proposed diversity reporting requirements for boards.
The new eight-member body, significantly smaller than its predecessor, includes prominent figures such as Pru Bennett, Dominique d’Avrincourt from TelstraSuper, and Mark Delaney, the outgoing chief investment officer of AustralianSuper. Other members include Tim Paine from Rio Tinto, former regulator Helen Rowell, company secretary Peter Torre, and company director Nicola Wakefield Evans. Noticeably absent from the new group are lobby groups and dedicated diversity advocates, signaling a shift in approach. The ASX acts as a marketplace where shares of publicly listed companies are bought and sold. As a publicly listed company itself, the ASX Group facilitates capital raising, investment, and trading activities in the Australian financial market.
In its first public statement, the new governance body affirmed its commitment to retaining the existing eight broad principles and the ‘if not, why not’ approach, which it believes has served the Australian capital market well. The focus will be on simplifying the rules where possible and providing guidance that assists companies without imposing additional compliance burdens. This decision comes amidst concerns about the existing 63-page corporate governance rule book, which has been cited as a factor contributing to a decline in ASX listings as companies explore private market options.
The push for simplification aligns with calls from figures like activist investor John Wylie, who has advocated for a principles-based approach to governance that prioritises company performance over prescriptive compliance. Wylie’s proposals included holding annual full board elections and requiring directors to invest a portion of their fees into the company, measures aimed at enhancing board accountability to shareholders.
