This is a service specifically targeted at the needs of busy non-executive directors (NEDs). We aim to give you a ‘heads up’ on the things that matter for NEDs in the week ahead – all in two minutes or less.

In this edition, we discuss the release of a consultation paper on the 5th edition of the Corporate Governance Principles and Recommendations by the ASX Corporate Governance Council, the gender pay gap indicated by the data released by the Workplace Gender Equality Agency (WGEA), and the greenwashing-related infringement notice issued by the Australian Securities and Investments Commission (ASIC) to Melbourne Securities Corporation Limited (Melbourne Securities).

In Over the Horizon, we consider the latest development in the climate-related disclosure space in the United States.


ASX Corporate Governance Council consults on 5th edition of Corporate Governance Principles and Recommendations. On 27 February 2024, the ASX Corporate Governance Council released the consultation draft for the fifth edition of its Corporate Governance Principles and Recommendations. The eight core principles in the 4th edition of the Principles and Recommendations have been retained, with new recommendations or updated disclosure expectations broadly relating to: (a) disclosure of board skills and diversity, and related processes; (b) interests of a listed entity’s key stakeholders, and how the entity engages with them; (c) NEDs not receiving performance-based remuneration or retirement benefits; (d) performance-based remuneration clawback provisions for senior executives; (e) disclosure of the outcomes of code of conduct breaches; (f) disclosure of verification processes for periodic reports and auditor tenure review processes; and (g) disclosure of a listed entity’s material risks. Subject to stakeholder consultation, the Council envisages that it will release the final version of the fifth edition of the Principles and Recommendations in early 2025, to potentially take effect for financial years starting on or after 1 July 2025. Submissions on the consultation draft are due by 6 May 2024. See ASX webpage.

Understanding Australia’s Gender Pay Gap. On 27 February 2024, the WGEA published data revealing a national 19% total remuneration gender pay gap, based on self-reported remuneration data from Australian private sector companies with at least 100 employees. This is the first time the WGEA has published (some 5,000) individual employer gender pay gaps with a view to bolstering transparency. Data trends include median gaps in base salary and total remuneration, which reflect broader societal and organisational dynamics. Interestingly, the WGEA data indicates that, while the median base salary gap is 14.5%, that gap expands to 19% when factoring in bonuses and overtime, which have primarily benefited male-dominated industries and higher-paid roles. According to the WGEA, the data poses questions about the value attributed to women's work, biases in hiring and promotion, and societal norms influencing career breaks and part-time roles. The WGEA notes that, ‘[a]nalysing the results of individual employers, against the context of their workforce composition and their actions in the workplace, will better inform employers and employees of the actions needed to address drivers of gender inequality at an organisational level, and will help policy makers, the media and the broader public hold employers to account’. Directors are encouraged to critically evaluate the impact of this data and the progress made (if any) in their own companies. See WGEA webpage.


ASIC issues infringement notice to Melbourne Securities for greenwashing. On 26 February 2024, ASIC announced that Melbourne Securities had paid $13,320 to comply with an infringement notice issued by ASIC for allegedly making misleading statements in the Product Disclosure Statement for the Bloom Climate Impact Fund, of which Melbourne Securities was the trustee and responsible entity. The Product Disclosure Statement stated that the Fund would seek to avoid the investment of the Fund’s assets in a range of excluded activities, including in fossil fuels. However, the Fund’s investment screening processes permitted investments in companies that derived up to 33% of revenue from excluded activities, such as fossil fuels. ASIC alleged that, as a result of the application of revenue thresholds, the Fund acquired and held a direct investment in General Electric Co which derived 16% of its revenue from fossil fuels in the 2022 financial year. Directors are reminded that sustainability-related claims and statements remain a key focus of ASIC enforcement activity. See ASIC media release.


SEC poised to make climate-related disclosures optional? The U.S. Securities and Exchange Commission (SEC) is due to vote on the much-debated draft Climate Related Closure Standards (Standards) on 6 March 2024. As we have previously noted (see G+T knowledge article), the Standards were initially put forward in early 2022 and proposed requiring publicly traded companies to disclose certain climate related management and risk information in their filings with the SEC – such as direct greenhouse gas emissions (Scope 1), indirect greenhouse gas emissions (Scope 2) and greenhouse gas emissions from upstream and downstream activities along their value chain (Scope 3). Commentators citing unnamed sources have suggested that the SEC has made compliance with the Standards optional and dropped all Scope 3 reporting, which (if correct) would represent a major setback to sustainability advocates, and place the US at odds with the EU. See news article. This would leave publicly traded companies who file with the SEC a wide discretion to effectively determine their own climate related management and risk reporting requirements, based on the board’s assessment of materiality. As concerns over the introduction of mandatory sustainability reporting in Australia increase, directors (particular of companies who are reporting issues in the US) should keep an eye on SEC developments.

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