The chief executive of the ASX, Dominic Stevens, has sought to calm the waters that recently swamped the ASX Corporate Governance Council’s moves to upgrade its principles.
Mr Stevens said a sensible final position will be struck and boards’ discretion to not adopt parts of the guidance will be maintained.
Speaking after the release of the ASX’s full-year results, which were driven higher as larger amounts of capital were raised on the market, Mr Stevens said the ASX serves as a member of the Corporate Governance Council but does not seek to dictate that group’s position.
“It’s not the ASX – these are corporate governance principles put together by a broad church of investors, directors and professionals working in the market, and we see that as a great forum for building the principles,” he said.
After AMP chairman David Murray ignited a fierce debate about whether the principles had distracted boards from debating important strategic issues, and the Business Council of Australia argued the principles should not seek to prescribe corporate culture, Mr Stevens said he is confident sense will prevail.
“People thought it was widening out, but I think when those things are discussed post consultation, my gut feel is they will probably concentrate down a bit.”
Among the controversial proposals during the heated consultation was introducing a social licence, from which chairwoman Elizabeth Johnstone appears to have already back-pedalled. There were also calls for gender targets and disclosure of climate change risks; industry super funds may have been behind this push.
‘If not, why not’ approach
“As with all good consultations, it’s shown a wide range of views, and has been a good discussion, and that’s the point,” Mr Stevens said.
“ASX has confidence, as with the last three of these that have been done, we think it will come back down to an outcome where there will be broad consensus of all the members.”
About 100 submissions have been received on the changes and the council is not expected to come up with the finalised set of principles until early in the new year.
Mr Stevens suggested the “If not, why not” approach will remain a central element of the revised principles.
It states that if the board of a listed entity considers that a council recommendation is not appropriate to its particular circumstances, it is entitled not to adopt it, so long as it explains why.
“We believe in “If not, why not”,” he said. He also suggested that “if there were no corporate governance principles, legislation or regulation would fill that void”.