About the Corporate Governance Principles and Recommendations
ASX has responsibility for developing, approving and issuing principles-based recommendations relating to the corporate governance practices of listed entities. The Principles are intended to promote investor confidence and to assist listed entities to meet stakeholder expectations in relation to their governance.
ASX does not seek to prescribe the corporate governance practices that a listed entity must adopt. Instead, the Principles apply on an ‘if not, why not’ basis. This recognises that the governance practices a listed entity chooses to adopt are fundamentally a matter for its board of directors.
Under Listing Rule 4.10.3, ASX listed entities are required to benchmark their corporate governance practices against the recommendations and, where they do not conform, to disclose that fact and the reasons why. The rule effectively encourages listed entities to adopt the recommended practices but does not force them to do so. It gives a listed entity the flexibility to adopt alternative corporate governance practices, if its board considers those to be more suitable to its particular circumstances, subject to the requirement for the board to explain its reasons for adopting those alternative practices.
The current version of the Corporate Governance Principles and Recommendations (fourth edition) was released on 27 February 2019.
Earlier versions of the Principles and Recommendations can be found at:
- Corporate Governance Principles and Recommendations (third edition released on 27 March 2014)
- Corporate Governance Principles and Recommendations with 2010 Amendments (released June 2010)
- Revised Corporate Governance Principles and Recommendations (second edition released August 2007)
- Principles of Good Corporate Governance and Best Practice Recommendations (first edition released March 2003)
Advisory Group on Corporate Governance
ASX, as the ultimate issuer of the Principles, is supported by a small Advisory Group (the Advisory Group on Corporate Governance) which is responsible for considering developments in corporate governance relevant to entities listed on ASX and recommending to the board of ASX Limited any changes to the Principles.