ASX Corporate Governance Principles - Diversity Council Australia

What are the ASX Corporate Governance Principles?

The Australian Securities Exchange (ASX) Council has adopted Corporate Governance Principles and Recommendations that apply to all entities admitted to the ASX official list as an ASX listing. These principles and recommendations are not mandatory or prescriptive. This recognises that there are a range of factors which may influence the kinds of governance practices that listed entities adopt.¹

However, the ASX Council takes an “if not, why not” approach to compliance with the Corporate Governance Principles and Recommendations. This requires listed entities to adequately explain why they have not adopted recommendations should they choose not to do so. Explanations must be included in the listed entity’s Corporate Governance Statement, as required by ASX’s listing rules.

Recommendation 1.5

Recommendation 1.5 of the ASX Corporate Governance Principles and Recommendations explicitly addresses D&I for ASX listed entities:

A listed entity should:

a) have and disclose a diversity policy;

b) through its board or a committee of the board set measurable objectives for achieving gender diversity in the composition of its board, senior executives and workforce generally; and

c) disclose in relation to each reporting period:

the measurable objectives set for that period to achieve gender diversity;
the entity’s progress towards achieving those objectives; and
either:
- the respective proportions of men and women on the board, in senior executive positions and across the whole workforce (including how the entity has defined “senior executive” for these purposes); or
- if the entity is a “relevant employer” under the Workplace Gender Equality Act, the entity’s most recent “Gender Equality Indicators”, as defined in and published under that Act.

If the entity was in the S&P/ASX 300 Index at the commencement of the reporting period, the measurable objective for achieving gender diversity in the composition of its board should be to have not less than 30% of its directors of each gender within a specified period.

The ASX Council recognises diversity as an asset to listed entities and a contributor to better overall performance. The recommendations also provide suggestions for the content of a diversity policy for ASX listed entities (see Box 1.5, page 10).

Update your diversity and inclusion policy to comply with the ASX principles and recommendations: check out our guide to writing or updating your D&I policy, and example policies, strategies and plans.

Fifth Edition of the ASX Corporate Governance Principles and Recommendations

In February 2024, the ASX Corporate Governance Council released the consultation draft for the fifth edition of its Corporate Governance Principles and Recommendations. This draft proposed changes to the recommendations, which include new recommendations on board diversity as well as diversity and inclusion policies.

As part of this consultation, DCA contributed to a joint submission with the University of Sydney Business School and University of Technology Sydney Business School/Jumbunna Institute for Indigenous Education and Research.

This submission called for the ASX to:

incorporate objectives for greater cultural and racial diversity, specifically asking listed entities to disclose the cultural, ethnic, and racial diversity of their board members to ensure accountability and transparency
adopt the proposed recommendation to set an objective for S&P/ASX300 companies to achieve gender-balanced boards (as opposed to 30% of each gender)
adopt the proposed recommendation for listed companies to disclose the effectiveness of their diversity and inclusion practices.

Go beyond compliance

Consider collecting (and disclosing) data about the diversity of your governing body, using the following DCA resources:
Develop and adopt a diversity and inclusion strategy using DCA’s resource, Getting strategic with D&I.

Read & learn more

ASX, Diversity resources
DCA, WGEA requirements

Australian Securities Exchange (ASX) (2019), ‘Corporate Governance Principles and Recommendations: 4th edition’.