Speech given at ACSI 2025 Conference
Louise Davidson: Chief Executive Officer - ACSI
At the recent ACSI conference CEO Louise Davidson outlined how Australia's unique corporate governance landscape has worked well for investors and companies. What's more, she outlined research revealing that superfund members strongly support the work ACSI and its members do to safeguard their retirement savings as active owners.
Thank you and welcome once again to our conference. I also acknowledge the Wurundjeri people of the Kulin Nation, the traditional owners of the land on which we meet, and pay my respects to their elders past and present.
ACSI was founded more than 20 years ago because our visionary early members recognised the importance of good governance in creating and maintaining financial value in listed companies, particularly over the long term.
And as investors of Australians’ retirement savings, that was the horizon they had their eyes on.Since then, business and governments have increasingly also begun to act to address governance and other sustainability factors.
“Corporate governance” is a short phrase, but it covers a multitude – composition of boards, oversight of management teams and workforce, as well as company culture. There’s also remuneration structures and outcomes, oversight of financial and non-financial risks, capital structure and shareholders’ rights."
Strong corporate governance is a crucial foundation for strategic success and supports a company’s ability to effectively manage sustainability risks and opportunities.
So it’s no surprise that we speak about governance practices in around 70% of our company engagements.
Recent years have seen a number of instances where poor corporate governance has resulted in significant destruction of shareholder value. These are critical issues for ACSI’s investor members and are a reminder of the need for strong, capable, diverse and independent boards to achieve the best outcomes.
Significant progress has been made: the boardrooms of our listed companies are now close to being gender balanced. This is an increase from under 22% women a decade ago.
It’s a massive change, and one that has benefited companies and shareholders alike. A diversity of views improves decision-making, and that’s just a fact. Similarly with climate reporting – mandatory reporting began this year, but even before that, most of the top 200 companies were detailing their management of climate risks.
Again, a huge change in a few short years – in 2016, 70 companies in the ASX200 didn’t make any climate disclosures at all, and more than half of the index didn’t have a climate policy or an emissions reduction target.
We advocated for climate reporting because our members have a legitimate need to price climate risk into their investment decisions to ensure they are maximising long-term benefits for their beneficiaries.
That statement holds true not just for climate but about the range of issues today’s program focuses on, whether it be AI, safety, modern slavery and more.
As we all know, there have also been huge political shifts overseas, where it has become fashionable to dismiss some of the material factors we consider.
