Acclime Corporate Snapshot – April 2025.

Acclime Corporate Snapshot provides you with an overview of current corporate governance matters, including regulatory changes, trends, and other important issues.

To discuss how these may affect you, please contact us on 03 8689 9997.

ASX governance principles update binned

In late February, the ASX Corporate Governance Council announced the end of consultation on a draft fifth edition of its Corporate Governance Principles and Recommendations, with the result that the fifth edition won’t go ahead, and the fourth will remain in operation without change.

Eight of the Council’s 19 members opposed implementing the draft fifth edition, including the ASX itself. That draft had been in circulation for a year and included updated recommendations regarding DEI disclosures, such as personal diversity disclosures from directors. However, it may not have been the DEI issue that divided members; rather, there were concerns that the new edition added unnecessary compliance burdens.

That narrow majority of support from council members was insufficient for the required “broad consensus”, according to Council Chair Ms Elizabeth Johnstone, who made pointed reference to “highly engaged” and “robust” discussion among the Council.

Report provides vital checklist of class action risks

A new Herbert Smith Freehills report, Rethinking Risk: Class Actions in Australia, paints a comprehensive picture of the class action landscape for Australian companies. The report was compiled from survey responses given by directors, lawyers and executives across multiple sectors: a clear majority felt the risk of class action litigation was increasing, and that the risk was spread across three broad areas – cyber, financial losses and social/governance.

The report sets out practical steps that boards can take to get ahead of the risks, and it’s loaded with data and intuitive graphics. There’s even a podcast version for the treadmill. Strong recommendation.

Climate-related financial disclosure in play at federal election

Only five months after mandatory climate-related financial disclosure commenced in Australia, the federal election on 3 May threatens to disrupt everyone’s plans. The federal Liberal Party has promised to scrap the laws if elected, although it remains unclear whether that means simply excising the more draconian elements of the scheme – such as Scope 3 emissions reporting – or a complete repeal. And it doesn’t only depend on the Liberals being able to form government – they’d likely also need the support of a cooperative Senate to do it. Companies are, of course, working to meet the law as it stands, while trying to keep an eye on what’s around the corner electorally.

Are your board priorities on track with the trends?

We’re over three months into the calendar year already, but it’s still worth a look at Ashurst’s run-down of board priorities for 2025. This is an annual list compiled by global governance, sustainability and risk advisory experts, and some topics – such as ‘geopolitical risks’ – have come roaring into prominence already. Others are perennials these days: cyber readiness, AI and supply chain disruption are all updated. There’s detailed analysis under a dozen different headings – well worth the deep dive to help set your board agenda.

Beneficial ownership disclosure under the microscope

Late last year, the Federal Treasury invited submissions on proposed amendments to the Corporations Act 2001 contained in an exposure draft, ‘Enhanced beneficial ownership disclosure for listed entities.’

MUFG Corporate Markets made a submission supporting the proposed legislation, which will affect all listed entities. But they also made some interesting recommendations along the way:

Firstly, they recommended ASIC consult with industry to ensure standardisation of the Register of Relevant Interests doesn’t create an unnecessary administrative burden and isn’t rushed.

Secondly, they suggested Treasury make the application processes and prescribed fee regimes consistent so copies are obtained for a proper purpose, and fees remain fair and reflective of the costs required to undertake the activity.

Lastly, they supported the expansion of the concept of “relevant interest” in securities to include derivatives, but recommended Treasury also consider including the disclosure of short positions within the definition.

Discussion of the amendments is ongoing – you can also read a submission from the Business Law section of the Law Council of Australia here.

A look at the competing forces behind ESG

For a slightly longer (but very worthwhile) read, it’s worth a look at Allens’ analysis of ESG (Environmental, Social and Governance) trends globally.

Short version: the overall picture had been shifting from self-regulation to standards imposed centrally. But after last year’s legislative wave and increased enforcement around the world, and crackdowns on greenwashing, America seems hell-bent on deregulation under the Trump presidency. But there’s no certainty that the trend-line will be reflected here.

Sources of information: Gilbert+Tobin, Allens, Ashurst, Herbert Smith Freehills, Australian Securities Exchange Ltd (ASX), Australian Securities and Investments Commission (ASIC), MUFG Corporate Markets ANZ, Law Council of Australia.

Disclaimer: Acclime Corporate Snapshot is only intended to provide a general overview on matters of interest. It is not intended to be comprehensive and is not legal advice. Acclime Australia attempts to ensure that content is current but we do not guarantee its currency. You should seek legal and/or professional advice before acting or relying on any content.