Former Reserve Bank of Australia governor Philip Lowe has convened the ASX Ltd (ASX:ASX)’s newly established corporate governance advisory body for the first time, with members agreeing to pursue a simplification of the exchange’s governance principles and setting a target to reach agreement by the end of 2026.
Lowe was appointed chair in November after the ASX disbanded its former 19-member governance council, following an internal split over proposed updates to the corporate governance principles that included expanded diversity reporting disclosures for boards.
The ASX announced a further seven members for the new advisory body at the end of January. The eight-person group comprises board adviser Pru Bennett; TelstraSuper head of equities Dominique d’Avrincourt; outgoing AustralianSuper chief investment officer Mark Delaney; Rio Tinto company secretary Tim Paine; former regulator and director Helen Rowell; company secretary Peter Torre; and company director Nicola Wakefield Evans.
The new body is less than half the size of the previous council, which had been chaired by Elizabeth Johnstone since 2017 and included representatives from business, investor and superannuation groups. The refreshed line-up is also notable for the absence of lobby groups and sole diversity, equity and inclusion advocates.
Panel keeps ‘if not, why not’ framework
Following its first meeting on Friday, the advisory body issued its first public statement on Tuesday, signalling an intention to retain the existing structure while reducing complexity.
“In updating the principles, members agreed to retain the 8 broad principles and ‘if not, why not’ approach,” the group said. “This approach has broad market acceptance and has served the Australian capital market well.
“In revising the principles, the [body] agreed on the importance of simplification, where possible. It will explore options for providing guidance that is helpful to firms in a way that does not create additional compliance obligations.”
The former council’s collapse followed controversy around a draft 5th edition of the ASX Corporate Governance Principles and Recommendations, which included a recommendation that boards report diversity characteristics beyond gender, including sexuality, age, Indigenous heritage and disability.
After the council voted not to proceed, the ASX commissioned an independent review chaired by Herbert Smith Freehills Kramer lawyer Quentin Digby, with former Commonwealth Bank and Telstra chair Catherine Livingstone also involved. The review recommended replacing the council with an ASX secretariat overseen by a smaller advisory group — now chaired by Lowe.
The latest communiqué comes amid broader debate about the compliance burden associated with the ASX’s existing 63-page governance “rule book”, which critics argue has added to friction costs for listed entities at a time when companies have increasingly favoured private capital over public listings.
Activist investor John Wylie last year circulated a “first principles” governance proposal advocating a shift away from more prescriptive compliance in favour of measures intended to sharpen accountability and performance. Among other changes, Wylie proposed annual full board elections — common in the US and Britain — and argued directors should be required to invest part of their fees in the company to increase “skin in the game”.