ASX Corporate Governance Principles and Recommendations
Submission Date: 15 September 2026
The Corporations Committee (Committee) of the Business Law Section of the Law Council of Australia provided comments on the revised draft of the fifth edition ASX Corporate Governance Principles and Recommendations, released by ASX Limited (ASX) on 21 July 2026 (Consultation Draft).
Overall, the Consultation Draft is an improvement on the fourth edition ASX CGPR, including in that it:
- is broadly consistent with Australian corporate law, including the law of directors’ duties;
- removes some obvious areas of overlap with existing legislative obligations;
- removes discussion of some matters that are not governance;
- encourages more thoughtful and reflective engagement by listed entities (and those to whom disclosure in the corporate governance statement is directed) with the “if not, why not” approach, given there are situations in which following a particular recommendation would not be in the interests of the entity and its security holders; and
- reduces the length of the commentary and the extent to which the commentary in previous editions has undermined the “if not, why not” approach.
The Consultation Draft does not depart significantly in substance from the current fourth edition. It does not seek to revisit the fundamental approach of earlier editions; nor does it reconsider, in any depth, which aspects of listed entity governance ought to be the subject of recommendations. It maintains the “top-down” approach to corporate accountability and oversight, rather than adopting a more dynamic, systems-based perspective on the relational nature of effective governance.1
The Committee recognises that, after the failure of the ASX Corporate Governance Council to produce consensus on a fifth edition in 2024–25, ASX prefers incremental improvement over a more radical rethink.
However, the Committee notes the broader debate in corporate governance about the ongoing utility and relevance of these kinds of soft-law codes and disclosure frameworks for listed entities.2 This includes where the recommendations they contain, first adopted many decades ago in quite different market conditions, are not necessarily supported by current evidence that they actually improve corporate behaviour or outcomes.
In this submission to the former ASX Corporate Governance Council in 2024, the Committee recommended that the Council plan for a more comprehensive re-examination of the model before moving to a sixth edition. The Committee makes the same recommendation to ASX, and suggests that work on that project begin as soon as the fifth edition is concluded.
1 A more dynamic view recognises the respective and distinct roles of (and interplay between) the board, senior management, security holders and other stakeholders in contemporary corporate governance: see P Hanrahan and T Bednall, “Independence of directors affiliated with substantial shareholders: Issues of law and corporate governance” (2015) C&SLJ 239 at 255.
2 See eg B Cheffins and B Reddy, “Thirty Years and Done – Time to Abolish the UK Corporate Governance Code” (June 9, 2022). European Corporate Governance Institute - Law Working Paper No. 654/2022, University of Cambridge Faculty of Law Research Paper No. 13/2023, Available at SSRN: https://ssrn.com/abstract=4132617 or http://dx.doi.org/10.2139/ssrn.4132617
Last Updated on 07/10/2026
Share
Tags
Most recent items in Business Law Section
Business Law Section
Reforms to the bankruptcy system
Business Law Section
The Australian Taxation Office's management of small business collectable debt
Trending Items in Business Law Section
Business Law Section
Forsyth/Pose Scholarship
Business Law Section
Santow Scholarship
Business Law Section