Updated ACSI Governance Guidelines 2026

February 9, 2026

The Australian Council of Superannuation Investors (ACSI) recently updated its governance guidelines after seeking input from various stakeholders (including Guerdon Associates, see HERE), the 12th edition of the guidelines has been revised.

Key updates to the guidelines include revisions covering succession planning, artificial intelligence, culture, workforce and diversity and strengthening the ties between board skills and experience, succession and election.

Remuneration

ACSI has removed some elements that were previously borrowed from international practice. For example, it no longer recommends disclosure of the CEO’s pay ratio against the workforce at the median, 25th and 75th percentile as required in some other markets.

A section on the binding vote on pay has also been removed. Previously ACSI believed that the two strikes rule should be supplemented with a binding vote on pay policy every three years. The specific requirement that all companies receiving a first strike or a high vote against should respond to investor concerns through engagement on material remuneration issues is also removed.

International focus is also expanded to include expectations for where an ASX listed company is domiciled out of Australia. ACSI now expect boards to:

  • Voluntarily submit remuneration reports for an advisory shareholder vote in alignment with the requirements for Australian domiciled companies; and
  • Put the CEO’s equity grant to an annual shareholder vote.

Another additional section is ‘International norms’. ACSI state that where companies are listed on the ASX but have executives in other markets, ACSI expect boards to ensure that incentives are aligned to long term shareholder outcomes. Nevertheless the challenges of competing for talent internationally are acknowledged.

Also introduced is opposition to “long-term incentives where more than half of the award is subject to undisclosed performance metrics.”

Board and director responsibilities

Expectations regarding director capacity have been broadened to apply explicitly to committee chairs as well as the Chair of the board, recognising the increased workload. But ACSI has also softened wording, shifting from an expectation that boards ‘should’ limit other board or chair positions to noting that this ‘may be appropriate’.

ACSI now has a section on skills, experience and attributes, where the focus is on undertaking regular independent skills assessments. These should not be undertaken solely by director self-assessment and should consider how recently skills were acquired, to ensure the board can oversee strategy and respond to risks, including climate change and digitalisation.

There are also new sections on CEOs. ‘CEOs as board members’ now explicitly expects the CEO to sit on the board to enhance transparency and strategic discussion. ASCI maintain sitting on other boards can add value, but the executive role should be the primary responsibility. ‘CEO and executive succession planning’ sets out expectations for there to be a dedicated CEO succession plan articulating required skills. The board should also regularly assess the composition of the senior team to understand the development pipeline.

The section around controlling shareholders is expanded to include founders as well. ACSI recognise that they can contribute to success but introduce governance risks and potential conflicts of interest. While safeguards for minority shareholders remain, there is now more detail on oversight of potential influence. ACSI also now expects the appointment of  a lead independent director when the chair is linked to a controlling shareholder or has real or perceived conflicts of interest.

Capital structure and shareholder rights

Expectations are generally similar although refinements clarify certain practices. ACSI now states that better practice at the AGM includes allowing unscripted, live questions with follow-up, or use of an independent moderator for the question and answer session, no longer mandates 24-hour results announcements, and has removed the reference to 28-day notice of a general meeting.

Some elements around share buybacks have also been removed including the purpose of the buyback where a pro-rata buyback cannot be achieved, and the value of the benefit (premium to market price offered).

Material sustainability risks and opportunities

ACSI’s view on assessing a company’s climate risk management process has been simplified to focus on material sustainability issues and align with mandatory AASB S2 reporting. Other changes include shorter circular economy guidance, and expanded workforce and human rights expectations.

Digitalisation

A new section on Artificial Intelligence replaces the cyber security section, reflecting the growth of corporate digitalisation. The deployment of AI is expected to greatly contribute to the global economy but can lead to significant data governance issues and cyber security risks. Boards are expected to address these risks through:

  • Having appropriate governance structures associated with digitalisation.
  • Establishing policies and process to guide the use of AI and manage cybersecurity threats. They should reflect the sensitivity of the data collected and used.
  • Considering policies and principles to manage potential workforce dislocation driven by AI taking a long term view of the risks and opportunities.
  • Supporting a culture of responsible AI practices, data governance and cyber security including establishing guardrails and training programs for the workforce to guide the use of AI.

See HERE for the new Guidelines and HERE for our summary of the previous edition.