Reminder to update your corporate governance policies before the financial year deadline – ASX Corporate Governance Principles and Recommendations (4th edition)

09 April 2020


The fourth edition of the ASX Corporate Governance Council’s (Council) ASX Corporate Governance Principles and Recommendations (Fourth Edition) takes effect for a listed entity’s first full financial year commencing on or after 1 January 2020.

This means that entities with a 30 June balance date will be required to measure their governance practices against the recommendations in the Fourth Edition commencing with the financial year beginning 1 July 2020.

If you have not already, we recommend you review and update your listed entity’s current corporate governance statement disclosures and adopted policies for compliance with the Fourth Edition as soon as possible.

Please contact the authors or any member of our Corporate Governance team if you have any questions in regard to the Fourth Edition or if your organisation requires assistance in addressing its recommendations.


HWL Ebsworth previously summarised the changes in the Fourth Edition, which have a clear emphasis on values, culture, risk and accountability, here.

We recommend you consider in particular:

  • New policies – Adopting and disclosing a Whistleblower Policy, Anti-Bribery and Corruption Policy, Statement of Values, Code of Conduct and Board Charter, if not already in place;
  • Appropriate agreements – Ensuring that each director and senior executive has personally entered into a written agreement with the company setting out the terms of their appointment, rather than a consultancy agreement or through a private company;
  • Independency – Whether a director needs to be re-classified as no longer being independent, including where they hold performance-based remuneration (such as options or performance rights) or participate in an employee incentive scheme;
  • Shareholder resolutions – Requiring all substantive shareholder resolutions to be decided by a poll rather than by a show of hands;
  • Corporate reporting validation – Disclosing your processes to verify the integrity of any periodic corporate disclosures that are not audited or reviewed;
  • Diversity practices – Reviewing the content of your Diversity Policy, measurable objectives (particularly if you are in the S&P/ASX 300 Index) and disclosures;
  • Full policies – Disclosing the following policies in full, if only summaries have previously been released: Diversity Policy, Code of Conduct, and Continuous Disclosure Policy; and
  • Foreign issues – Ensuring that there are processes to assist directors who do not speak the same language, that shareholder meetings for entities established outside Australia are held at a reasonable place and time, and that external auditors attend AGMs (if applicable).

As under previous editions, 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. If it does so, however, it must explain why it has not adopted the recommendation – the “if not, why not” approach has been maintained.

However, the Council would like entities to not only outline the governance arrangements they’ve adopted, but also to explain how they are being implemented, including actions taken to promote compliance, whether there have been any material breaches and how these have been dealt with, and any material insights gained from reviews or evaluations undertaken.


On 1 January 2020, ASX updated Guidance Note 9: Disclosure of Corporate Governance Practices to assist listed entities to comply with disclosure and other requirements in the Listing Rules regarding corporate governance practices, including guidance on the Council’s new recommendations.

Listing Rule 4.7.3 requires a listed entity to give ASX a completed Appendix 4G at the same time it gives ASX its annual report. The Appendix 4G is a key to where the entity has made its governance disclosures, and includes the Fourth Edition recommendations in a table with checkboxes in two columns for an entity to indicate whether it follows the recommendations or not, the details of which are then set out in the entity’s corporate governance statement.

The Appendix 4G is not a substitute for, and is not to be confused with, the entity’s corporate governance statement.

The corporate governance statement summarises the entity’s corporate governance practices by disclosing in detail the extent to which the entity has followed the recommendations in the Fourth Edition, any alternative practices adopted and the results of any reviews or evaluations undertaken during the reporting period. The corporate governance statement must either be included in the annual report or released as a separate announcement to the ASX at the same time as the Appendix 4G.

This article was written by Shaun Hardcastle, Partner and Maddison Cramer, Associate.


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