ASX consults on updated Corporate Governance Principles and Recommendations

ASX has described this draft 5th edition as an “evolution, not a redesign”. The existing eight Principles and the familiar “if not, why not” reporting model will remain. However, the draft proposes a number of changes intended to make the framework clearer, less duplicative and more focused on practical governance outcomes. To assist navigating the proposed changes, ASX has also helpfully released a recommendation-by-recommendation roadmap, setting out the status of a Recommendation in the draft 5th edition as compared to the current 4th edition.2

Listed companies should review the draft 5th edition and consider how the proposed changes may affect their current corporate governance processes, including Board composition and capability, culture reporting, risk, audit and verification processes, remuneration governance, stakeholder engagement and annual corporate governance reporting. If there are any concerns or practical issues, there is an opportunity to raise these with ASX during the consultation period.

A snapshot of the main themes and proposed changes

Some of the key themes from the draft 5th edition are:

• The existing framework stays: ASX proposes to retain the existing eight Principles and the “if not, why not” reporting approach, which allows companies to adopt governance practices that are appropriate for their size, structure and circumstances.
• Less duplication with existing law: Several Recommendations are proposed to be removed or reframed where the subject matter is already dealt with under legislation, the ASX Listing Rules or other regulatory requirements.
• Clearer distinction between what must be reported against and what is guidance: The draft 5th edition more clearly separates the Principles, Recommendations and non-reportable Explanatory Material. This should help reduce the risk that guidance is treated as mandatory.
• Less prescriptive policy content: ASX proposes to remove detailed suggested policy content from a number of commentary boxes to avoid a box-ticking approach to the Principles, including in relation to diversity, codes of conduct, whistleblower policies, anti-bribery and corruption policies, continuous disclosure policies and remuneration guidelines. Instead, ASX is considering providing a dedicated webpage with links to additional resources on these topics. Such resources will not form part of the Principles but will offer practice guidance to companies.
• Board skills disclosure becomes more flexible: ASX proposes to remove the Recommendation on disclosing a Board skills matrix (current Recommendation 2.2). Instead, Boards of listed companies would be expected to determine and disclose the mix of skills, knowledge and experience they need. A skills matrix may still be used as a tool that supports assessment, but would not be the focus of the Recommendation.
• Factors for assessment director independence updated: ASX proposes to remove the reporting obligation against prescribed independence factors in Box 2.3 and align potential substantial shareholder influence on independence with the thresholds for positions of influence in Chapter 10 of the Listing Rules. This would move the relevant shareholder influence threshold from the 5% substantial holding threshold under the Corporations Act to the 10% threshold used in Chapter 10 of the Listing Rules.
• More focus on Board oversight of culture and stakeholder engagement: Greater emphasis is being placed on the Board’s role in overseeing culture, including how the Board monitors culture and is informed of material breaches of key policies. A new Recommendation is proposed to recognise the role of engagement with security holders and other stakeholders in supporting an entity’s culture and long-term sustainable value, with related disclosure of the entity’s engagement processes.
• Audit, verification and remuneration remain important: ASX proposes refinement relating to verification processes for periodic corporate reports, disclosure of auditor tenure and audit reviews, executive pay adjustment mechanisms and non-executive director remuneration and security holding arrangements. These changes are intended to better reflect contemporary governance practices and investor expectations.
• Appendix 4G and guidance may be simplified: ASX is also consulting on consequential Listing Rule and Guidance Note changes, including a streamlined Appendix 4G and the proposed withdrawal of Guidance Note 9 (Disclosure of corporate governance practices) and Guidance Note 10 (Review of operations and activities: Listing Rule 4.10.17).

What companies should do now

Listed companies should use the consultation period to:

• review their current corporate governance statements and policies against the draft 5th edition;
• identify disclosures in their corporate governance statements and policies that may need to be updated, simplified or expanded;
• review how Board skills, succession planning and Board evaluation processes are documented;
• consider whether Board’s current role in overseeing culture, conduct, stakeholder engagement and material policy breaches is sufficient;
• review audit committee processes and verification procedures for periodic corporate reports;
• revisit remuneration governance disclosures, including executive pay adjustment mechanisms and non-executive director remuneration arrangements;
• consider the practical impact of the proposed Appendix 4G and Listing Rule changes; and
• identify any concerns or practical issues that should be raised with ASX before the end of the consultation period.

Many (and in particular, larger) listed companies may already have the relevant governance processes in place. However, it is important to ensure those processes are documented in a way that will be consistent with the revised Principles and stakeholder expectations.

Next steps

Written submissions on the draft Principles close at 5pm (AEST) on 14 September 2026. The consultation is supported by public forums across major cities in August, where the Advisory Group on Corporate Governance will answer questions about the draft Principles. ASX has indicated that the Advisory Group on Corporate Governance will consider feedback and provide recommendations to ASX’s Board by the end of 2026, with ASX’s response to consultation likely to be released in the first quarter of 2027.