From counting seats to counting capability: the next governance conversation
On 21 July 2026, the ASX opened its second attempt at a fifth edition of the Corporate Governance Principles, after the first stalled in 2024 over how far to expand diversity disclosure. New Zealand has spent the same period quietly building BoardConnector, which has just blown past its first year target, registrations up to 349, membership past 1,140.
Two different routes to the same question. Not who is in the room, but whether the room, collectively, can govern the risks the organisation actually faces.
Women still hold only 31 percent of director positions in NZX listed firms, so the pipeline work is far from finished. But New Zealand's approach has kept capability expectations running alongside representation, rather than treating them as competing claims, which is where Australia's first draft came unstuck.
Worth a read if you sit on, or advise, a board with any ASX exposure. Submissions close 14 September.
On 21 July 2026, the ASX opened an eight-week consultation on a new draft of its Corporate Governance Principles and Recommendations, the fifth edition since 2003. Submissions close on 14 September 2026. It's worth boards on both sides of the Tasman watching, not just for what's in the draft, but for the road Australia took to get here, and the steadier road New Zealand has been on in the meantime.
I have spent most of my career watching rooms: who is in them, who speaks first, whose questions get followed up. Working across the New Zealand public sector for two decades, I learned early to keep a close eye on how conversations about representation unfold, not because I doubted their importance, but because I have seen how easily they become the whole conversation. Diversity gets treated as the destination rather than one of the conditions for good governance. Boards across Aotearoa and Australia are now being asked a sharper question: not simply who is around the table, but whether the people around it, collectively, can govern the risks the organisation actually faces.
New Zealand and Australia are getting to that question by two different routes. New Zealand has been building steadily on an existing framework. Australia has been rebuilding the framework itself, after an earlier attempt at reform did not proceed following internal disagreement.
New Zealand: building the pipeline within the existing structure
The clearest recent evidence of New Zealand's approach came only a few days ago. On 21 July 2026, Minister for Women Nicola Grigg announced that BoardConnector, the Ministry for Women's governance database, had more than doubled its first-year growth target: a goal of 20 percent, or 160 members, set the previous June was met by March, and a refreshed database drew 349 new registrations, taking membership past 1,140. The Ministry has already set the next target, a further 20 percent, feeding into the government's broader goal of 50 percent of Crown appointments held by women.
It is worth being honest about the gap that remains. Ministry for Women data from March showed women hold only 31 percent of director positions in NZX-listed firms, well behind the public sector picture BoardConnector reflects.
The NZX Corporate Governance Code reinforces this by requiring listed issuers to disclose board skills matrices and diversity policies, and to explain how composition supports strategy and risk oversight. The FMA Corporate Governance Handbook links capability, independence and effective oversight to organisational performance. Neither regulator treats diversity as a stand-in for competence; both treat it as one input into a board that can do its job. Notably, none of this required changes to the underlying framework, just expanding visibility and existing disclosure requirements.
Australia: rebuilding the rulemaking process itself
Australia's path has involved more structural change, worth setting out because it shapes what conclusions can fairly be drawn.
The Principles have historically been updated on an irregular cycle, roughly every four to seven years, with editions in 2003, 2007, 2014 and 2019. On 27 February 2024, the ASX Corporate Governance Council released a consultation draft for a proposed fifth edition, including a recommendation that boards report diversity characteristics beyond gender, such as sexuality, age, Indigenous heritage and disability. It drew 109 written submissions, 31 confidential, from bodies including the Law Council of Australia, the Property Council of Australia, the AICD and several listed companies.
On 20 February 2025, the Council decided not to proceed, citing differing views within its 19 members, particularly over the proposed diversity characteristics, as the reason the draft did not go ahead. Its role in setting the Principles was wound up, and in October 2025 ASX took on direct responsibility for developing, approving and issuing the Principles itself. A new eight-person Advisory Group on Corporate Governance was appointed, chaired by former Reserve Bank Governor Dr Philip Lowe, aiming for a more regular review cycle going forward, closer to four years than the seven-year gap the market had just experienced.
On 21 July 2026, the Advisory Group released the draft fifth edition and opened its eight-week consultation, with written submissions due by 5pm AEST on Monday 14 September 2026. Materials are available on ASX's public consultation webpage at asx.com.au/about/regulation/corporate-governance-principles-and-recommendations. Lowe has described the aim as a fifth edition intended to "refine, but not redesign" the existing framework. The draft retains the eight core principles and the existing gender diversity recommendation, and discusses diversity of thought, skills and experience, but frames these around board effectiveness and emerging risks such as AI and digital transformation, rather than additional demographic disclosure categories.
What the sequence tells us, and what it does not
It would be easy to assume the current draft carries the same baggage as the 2024 version. The 2024 draft ran into trouble inside the body that wrote it, not out in the market, and this group is smaller, with a narrower brief to simplify rather than expand. Whether the market agrees is still genuinely open, and we'll know more once submissions close in September. For now, this is Australia's second run at getting a fifth edition over the line, built on what didn't work the first time.
Being counted as part of a diversity statistic and being recognised for capability are not the same experience, even when they describe the same appointment. The first can feel like being let in through a side door; the second is what makes the appointment durable, because it survives scrutiny on the same terms as everyone else's. Australia's Council struggling to agree on how to define diversity, and the replacement body choosing not to expand those categories, says something about what happens when representation and capability get treated as competing claims. New Zealand has mostly sidestepped that by keeping capability expectations running alongside the pipeline work, not in tension with it.
From individual credentials to collective capability
Boards on both sides of the Tasman have historically recruited in their own image: former CEOs, finance executives, directors with established governance experience. This produced familiarity, but also overlapping perspectives and limited range. The more useful question now is not whether each director individually meets a traditional definition of experience, but whether the board, together, holds the range the organisation needs, increasingly reflected in broader skills matrices.
- Traditional focus - Finance Governance experience, Legal, Industry knowledge, CEO experience, Audit, Risk, and Strategy
- Emerging focus - Cyber security, Artificial intelligence, Digital transformation, Data governance, Customer insight, Culture and people, Innovation, Technology
None of this diminishes financial or legal expertise. It reflects that organisations now carry a wider set of strategic risks than a decade ago, and a board built entirely around the traditional column will struggle to challenge management on the emerging one.
AI is likely to accelerate the change
Artificial intelligence may end up doing more to shape board composition than any diversity policy has managed alone. Boards are increasingly expected to ask informed questions about AI governance, model risk, algorithmic bias, data privacy and automation's workforce implications. No board needs every director to be a technical expert; it needs enough expertise around the table to challenge management properly, the same principle long applied to audit and risk.
What this means in practice
Boards preparing for their next succession cycle might usefully ask themselves:
- Do we collectively have the capability to govern AI, cyber and digital transformation, or are we relying on management's assurance that things are under control?
- Which strategic risks receive insufficient challenge because no director has deep experience in that area?
- Is our succession plan addressing future capability, or simply filling vacancies as they arise?
- For directors with any ASX exposure, is it worth reviewing the draft before submissions close on 14 September, given how much the last attempt at reform was shaped by who did and did not weigh in?
A closing reflection
The composition debate has spent a long time being framed as representation versus merit, as though a board had to choose. That framing was never especially accurate. Representation broadens whose perspective gets heard; capability determines whether that perspective translates into better judgement in the room. Australia's experience over the past two years shows what happens when the two get argued as opposites: progress slows considerably. New Zealand's experience shows that steady, unglamorous pipeline work, kept alongside capability expectations rather than instead of them, tends to hold up better over time.
I do not think the answer is to stop paying attention to who is in the room. I think the answer is to keep asking, in the same breath, whether the room can actually do the job in front of it. That is not a comfortable question for every board to sit with. It is, I suspect, the one worth sitting with anyway.