Principles of Good Corporate Governance and Good Practice Recommendations ASX Corporate Governance Council Exposure Draft of changes 2 November 2006
Exposure Draft Principles and Recommendations Unmarked The proposed changes to the Principles of Good Corporate Governance and Best Practice Recommendations outlined in the Explanatory Paper, Consultation Paper and Exposure Draft represent ASX Corporate Governance Council's collective view of what should be released for public comment and consultation. The material should not be interpreted as representing the final view of any Council member on any issue. Page 2 of 43
Exposure Draft Principles and Recommendations Unmarked Foreword The ASX Corporate Governance Council was formed on 15 August 2002, bringing together 21 groups from disparate business backgrounds and carrying the varying aims and priorities that accompany those constituencies. Despite their differing perspectives, the Council's overriding mission was commonly held: to develop and deliver an industry-wide, supportable and supported framework for corporate governance which could provide a practical guide for listed companies, their investors, the wider market and the Australian community. The size, complexity and operations of companies differ, and so flexibility must be allowed in the structures adopted to optimise individual performance. That flexibility must, however, be tempered by accountability - the obligation to explain to investors why an alternative approach is adopted - the "if not, why not?" obligation. The enhancement of corporate accountability and the adoption of this framework for reporting was a major evolution in corporate governance practice in Australia. The impact on Australian companies must not be underestimated. The ASX Corporate Governance Council is committed to a continuing assessment of the implementation experiences of listed companies and the reactions of investors. This document is not the final and complete guidance - it is offered as guidance only in the sense that any corporate governance regime must be sufficiently flexible to cope with a constantly changing environment. Just as a healthy and robust business environment evolves with circumstances, so too must any guidelines for corporate governance good practice. The ongoing relevance and effectiveness of these guidelines will be periodically reviewed by the ASX Corporate Governance Council. As with the ASX Listing Rules, where the spirit and intention outweighs the letter of the law, so must these guidelines be applied: maintaining an informed and efficient market and preserving investor confidence remain the constant imperatives. Chair ASX Corporate Governance Council Page 3 of 43