ASFA chief Mary Delahunty opposes big business moves to dump diversity reporting rules

The peak superannuation body remains aggrieved at a decision to axe corporate governance reforms including diversity changes, saying business leaders should ‘rise above politics’.

Wesfarmers boss Rob Scott said he was relieved planned corporate governance reforms had been scrapped

The powerful Association of Superannuation Funds of Australia has slammed the decision to scrap planned changes to diversity reporting rules, underscoring a divide among big business over contentious changes to corporate governance rules.

The 19 members of the ASX Corporate Governance Council last week failed to reach consensus on a new set of corporate governance principles and on Thursday officially axed the proposed “fifth edition” of the changes, following growing criticism from business leaders. ASFA had argued for the inclusion of even “stronger language” around the proposed extension of diversity characteristics to include race, sexual orientation, religious ­beliefs and socio-economic ­back­ground.

This has provoked a backlash from other corporate groups and individuals who are pushing back against the diversity, equity and inclusion tide.

Mary Delahunty, ASFA’s chief executive, said she was disappointed by the council’s move, given institutional investors supported many elements of the governance package.

“We think waiting for a burning platform for the business community to make certain improvements is probably a little retrograde,” Ms Delahunty told The Australian.

“And we can do better than that. There’s well documented research that there’s a relationship between diversity and value and so it’s entirely appropriate that shareholders would want to see companies pursuing that.”

ASFA CEO Mary Delahunty said she was disappointed by the council’s move. Picture: Aran Anderson

One of US President Donald Trump’s first acts in office was to sign an executive order promising to terminate all diversity, equity and inclusion offices, positions and programs across the US federal government.

The boss of ASFA, the peak advocacy body for Australia’s $3.8 trillion super industry, said that had also started to flow through into Australian business circles.

“I think the political wind internationally is there and it’s certainly been mentioned in council meetings. But isn’t it for the leaders of the business community to rise above political trends and see what shareholders are asking for them to see?” she said.

Wesfarmers boss Rob Scott, who runs one of Australia’s largest listed companies, backed the council’s decision to scrap ­planned changes to mandatory diversity reporting rules, saying the draft guidelines “went too far”.

“I am pleased they are not going ahead,” Mr Scott said.

“At a personal level, I feel that the draft guidelines went a bit too far,” Mr Scott told The Australian.

“Because what it would have done is it would have created additional reporting and disclosure obligations that were too far removed from what the objectives of a company should be.

“And all it was going to do was add additional cost, complexity and bureaucracy into businesses without any gain from a diversity or inclusion perspective. So I’m pleased that it’s not going ahead.

“And the only other point I make here is that we need to be mindful that we want to maintain the competitiveness of listed markets. We’re seeing very strong growth in private capital, so I think we just need to be careful that we’re not overly burdening listed companies with additional disclosure reporting regulations that aren’t really going to benefit their competitive advantage, or their shareholder base.”

ASX Corporate Governance Council chair Elizabeth Johnstone said the group was mindful of the impact on the market of what has been an extensive consultation process, adding it was now appropriate to end the process and provide the market with certainty.

“It is clear, from the range of views expressed during the consultation, that achieving broad consensus on a suitable Fifth Edition would not be possible.”

Originally published as ASFA chief Mary Delahunty opposes big business moves to dump diversity reporting rules