Australia’s Corporate Governance Principles and Recommendations (CGPR) 2019

The Corporate Governance Principles and Recommendations (CGPR) in Australia, last updated in 2019, provide a framework to guide the governance practices of Australian companies. Here’s an elaboration on the key principles and recommendations:

1. Lay Solid Foundations for Management and Oversight:
   • Boards are expected to establish and disclose the roles and responsibilities of the board, its committees, and individual directors.
   • Companies should have a clear organizational structure and define the respective roles of management and the board.
2. Structure the Board to Add Value:
   • The board composition should be diverse, comprising directors with a mix of skills, experience, independence, and knowledge relevant to the company’s operations.
   • Boards should periodically evaluate their own performance, as well as that of individual directors and committees.
3. Act Ethically and Responsibly:
   • Companies are encouraged to promote ethical and responsible decision-making by establishing a code of conduct and fostering a culture of integrity throughout the organization.
   • Boards should oversee the company’s compliance with laws, regulations, and ethical standards, and ensure appropriate risk management practices are in place.
4. Safeguard Integrity in Corporate Reporting:
   • Companies are expected to provide accurate, reliable, and timely financial and non-financial information to stakeholders.
   • Boards should establish and oversee processes for internal control, risk management, and external audit to safeguard the integrity of corporate reporting.
5. Make Timely and Balanced Disclosure:
   • Companies should disclose all information necessary for investors to make informed decisions, including financial performance, risks, and governance practices.
   • Boards are responsible for ensuring the accuracy, completeness, and timeliness of disclosures and communications with stakeholders.
6. Respect the Rights of Shareholders:
   • Companies should respect the rights of shareholders and facilitate their effective exercise, including the right to participate in general meetings and vote on key matters.
   • Boards should engage with shareholders and address their concerns, considering their input in decision-making processes.
7. Recognize and Manage Risk:
   • Companies should establish a sound framework for risk oversight and management, identifying and mitigating risks that may impact the achievement of strategic objectives.
   • Boards should regularly review and assess the company’s risk profile, ensuring appropriate measures are in place to manage risks effectively.
8. Encourage Enhanced Performance:
   • Companies should establish clear performance objectives, aligned with their strategic goals, and regularly assess their performance against these objectives.
   • Boards should incentivize and reward performance that creates long-term sustainable value for shareholders and stakeholders.

Overall, the CGPR in Australia aims to promote transparency, accountability, and responsible stewardship of companies, fostering trust and confidence among investors, regulators, and the broader community.