The 4th edition is aimed at addressing governance issues around corporate culture and values, ethics, board responsibilities and effectiveness, diversity, executive remuneration, risk management and risk appetite, and climate change.
The 4th Edition of the ASX Corporate Governance Principles has introduced a raft of new requirements – see our article entitled Values, culture and social responsibility required to rebuild trust. So, where to begin?
First, we note that the direction of updated governance principles and recommendations is complementary to that of Integrated Reporting, <IR>, so the two can be developed concurrently – see our article entitled Building trust through transparency.
The aim is to strengthen the links and alignment between an entity’s purpose/vision, culture, values and strategy, and its activities and behaviour, and how those activities and behaviour drive value creation.
Nevertheless, regardless of your entity’s progress on <IR>, companies need to start preparing now for the new corporate governance regime.
Here is a quick list of the major ‘to do’ items:
Other important reminders and considerations include:
While the to-do list may look a little lengthy, many of the tasks will be straightforward if you plan and prepare early. Early preparation will leave enough time for the more nuanced requirements to be appropriately considered and implemented for the first full reporting period on or after 1 January 2020.