For readers of the AFR, you may have seen Patrick Durkin’s relentless campaign targeting the near-complete 5th edition of the ASX Corporate Governance Principles and Guidelines. For those unfamiliar with his articles, over the past few weeks, Patrick has made claims that the 5th edition contained onerous Diversity, Equity, and Inclusion (DEI) disclosure requirements and that this was causing division at the Council of 19 industry, investor and governance bodies (of which IIA-Australia is one).
The Council Chair, Elizabeth Johnstone has publicly corrected the claims about the DEI disclosures. But, as it turned out last week, Patrick was correct about the disharmony. This was when IIA-Australia found out that some Council members had strong opinions that, despite being near-ready, the consultation and preparation of the 5th edition should be shelved. Advance 3 days and that is the outcome we were advised of by the ASX late yesterday.
Confidentiality prevents us sharing particular details. What we can say is that there was strong support for the near-final version of the 5th edition, yet a handful of Council members were not able to support it. Without full consensus, the ASX decided to close the consultation process. IIA-Australia has expressed our deep disappointment over this decision.
With the 5th edition sidelined, the 4th edition will remain. This means that the hard-fought for inclusion of the Standards in the 5th edition is also sidelined. Although this would have been an important step forward for the practice of internal audit in listed entities, the existing “if not/why not” approach to having an internal audit function continues. We thank all our members who advocated for and participated in the consultation. We are sorry that governance enhancements were sidelined by process.
Hopefully, we will not have to wait for another GFC or Royal Commission before governance for performance improvements get another look in. We may have been trumped this time, but we will continue the good fight.
Regards,
Trish Hyde
Chief Executive Officer