Law Council of Australia

Business Law Section

ASX CGC’s Corporate Governance Principles and Recommendations

ASX Corporate Governance Council consultation materials for a proposed 5th edition of the Corporate Governance Council Principles and Recommendations

This submission by the Law Council of Australia’s Business Law Section has been prepared by the Corporations Committee. It has been designed to thematically address the ASX Corporate Governance Council’s consultation materials for the proposed 5th edition of the Corporate Governance Council Principles and Recommendations in a thematic way.

The first section of the submission looks at how the ASX Corporate Governance Council’s Corporate Governance Principles and Recommendations (CGPR) fits into the broader framework of corporate law and directors’ and officers’ duties. It explains how the CGPR are used by courts when considering directors’ and officers’ duties of (a) care and diligence and (b) best interests.

We suggest that the CGPR have become an integral part of the way the community and courts look at the duties of directors and officers of ASX-listed entities, and are influential in setting expectations. The submission concludes that the CGPR accurately reflect contemporary Australian corporate law with respect to those duties.

The second section of the submission explores whether the changes proposed in the Council’s Consultation Document reflect contemporary thinking about “best practice” governance. In particular, it asks whether the proposed changes to the CGPR take adequate account of the lessons learned since the 4th edition (especially in light of various investigations and inquiries into governance failures).

Read the full submission below.

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