Regulatory Issues to Watch in Australia and New Zealand’s 2026 Proxy Season

Over the final months of 2026, hundreds of ASX and NZX-listed companies will hold their annual shareholder meetings, and investors will vote on thousands of AGM proposals. In the second of a two-part series setting out the issues expected to shape board decision-making and institutional voting across Australia and New Zealand’s 2026 proxy season, this article outlines regulatory trends and developments. Part one of the series covered governance and remuneration issues that are impacting market practice.

Governance Framework Developments

ASX Corporate Governance Consultation

The long-delayed fifth edition of the ASX Corporate Governance Principles and Recommendations has been revived under a new governance model. Following an independent review, the former ASX Corporate Governance Council was replaced in early 2026 by an Advisory Group on Corporate Governance, chaired by former Reserve Bank Governor Philip Lowe and comprising members drawn from governance, investment, superannuation and markets. Its members serve in an individual capacity rather than as representatives of particular constituencies.

On July 21, 2026, the advisory group released a draft fifth edition¹ for an eight-week public consultation. It intends to deliver its final recommendation to the ASX board by the end of 2026.

The draft is presented as an effort to refine rather than redesign the framework, retaining the eight core principles and the "if not, why not" approach, while simplifying the recommendations and updating them for changes in governance and law since 2019. It gives companies greater flexibility to adopt the specific recommendations or to develop and explain alternative practices that meet the high-level principles.

On board composition, the draft removes the requirement to disclose a board skills matrix, retaining it only as a suggested tool in the explanatory material, and instead asks boards to determine and assess the collective skills, knowledge and experience required, with the process and outcome disclosed.

On diversity, the draft steps back from the earlier fifth-edition proposals, a 40% gender target and disclosure of specific diversity characteristics, which failed to secure consensus in early 2025. It retains the existing 30% target and instead asks entities to disclose how diversity of thought, experience, perspective and gender factors into board succession planning.

Shareholder Approval for Significant Transactions

In October 2025, ASX released a consultation paper proposing to expand the circumstances in which listed companies must seek shareholder approval for significant transactions. The review followed representations from institutional investors about the dilutive impact of scrip-funded acquisitions.² The paper canvassed four areas: reducing the limit on shares a bidder can issue for a takeover or merger without approval; requiring approval for a dual-listed company to move to ASX Foreign Exempt Listing status; requiring approval for such a company to delist from ASX; and a broader option covering any significant change to a company's activities.

Following consultation, ASX published its response³ and an exposure draft of proposed listing rule amendments in June 2026, advancing the first three areas but not proceeding with the broader significant-transactions limb. On September 18, 2026, ASX published its final consultation response and final amendments. They are now only subject to completion of the statutory rule-amendment process, with commencement still scheduled for October 21, 2026.⁴

Central to the package is a 25% cap on shares on issue for S&P/ASX 300 companies, replacing the current framework under which qualifying takeover and scheme consideration is exempt from ordinary placement capacity, subject to the existing restriction on reverse takeovers. The existing position would largely be preserved for smaller entities. Shareholders would be able to agree to a higher cap in advance, including through a standing approval or a change to the company's constitution.

The direction of the proposals reflects a broader push, led by institutional investors, for greater say over transactions that materially dilute existing holders or alter the rights attaching to their securities. If adopted, the reduced threshold would bring a meaningful number of large-company deals within the approval net, placing renewed weight on how boards justify acquisition-funding dilution. Shareholders in dual-listed companies would also gain a direct vote on a change to foreign exempt status and on a delisting where the company retains a material Australian shareholder base.

Sustainability Disclosure Developments

Mandatory Climate Disclosures in Australia

Australia’s mandatory climate-related financial disclosure regime is now in force. Under Chapter 2M of the Corporations Act and the Australia Accounting Standards Board (AASB) S2 standard, in-scope entities must prepare annual sustainability reports, phased in by size, with the largest (Group 1) entities reporting for financial years beginning on or after January 1, 2025 and the first reports lodged with Australia Securities and Investments Commission (ASIC) from early 2026.

In May 2026, ASIC published early observations from its review of a sample of the first reports lodged by Group 1 entities with December year-ends,⁵ ahead of the larger June 30, 2026 reporting season. ASIC reported a marked improvement in the quantity and quality of climate-related information compared with prior voluntary disclosures. It also identified recurring areas for improvement: the disclosure of judgements and assumptions, the use of cross-references and disclaimers, and the framing of climate-related targets. ASIC published a report on September 21, 2026, based on a sample of 40 December-year-end sustainability reports. It found marked progress, but identified improvement areas including forward-looking disclosures and assumptions/judgements.⁶

For boards, the regime moves climate disclosure from a voluntary exercise to a mandated one, with ASIC signaling first-year reports are a starting point, not a settled benchmark. Scrutiny is expected to shift toward the credibility of offsets, scenario analysis and forward-looking financial impact disclosures.

Climate Disclosure Recalibration in New Zealand

New Zealand was among the first jurisdictions globally to mandate climate-related financial disclosure, requiring large financial market participants to report against the External Reporting Board's three climate standards for annual periods beginning on or after January 1, 2023 – well ahead of Australia's regime.

In October 2025, Cabinet agreed to narrow⁷ the regime as part of a wider package to reinvigorate capital markets: the listed-issuer threshold rises from NZ$60 million (US$34.3 million) to NZ$1 billion ($571.7 million),⁸ managed investment scheme managers leave scope entirely, and thresholds become adjustable upward only by Order in Council. Together these changes are expected to take more than half of all reporting entities out of scope. The proposed amendments also soften liability: directors will not be deemed liable for entity-level breaches, and reporting entities and their directors will not be liable for unsubstantiated forward-looking statements where they comply with the climate standards. The enabling Financial Markets Conduct Amendment Bill remains before Parliament.

Separately, the External Reporting Board is consulting until September 30, 2026⁹ on a roadmap to introduce New Zealand International Financial Reporting Standards (NZ IFRS) S2, based on the international IFRS S2 standard and aligned where appropriate with Australia’s AASB S2. Under the proposed transition, entities could adopt NZ IFRS S2 early for reporting periods beginning on or after  October 1, 2026, with mandatory application deferred to periods beginning on or after January 1, 2033.

Modern Slavery Legislation in New Zealand

New Zealand has moved to introduce its first mandatory modern slavery reporting framework, bringing it into line with regimes long established in Australia and the United Kingdom. The Modern Slavery Bill¹⁰ was introduced in February 2026 and passed its first reading in April before being referred to the Education and Workforce Select Committee, which has now reported and recommended by majority that the bill be passed. If enacted in its current form, the bill would require entities with consolidated annual revenue of more than NZ$100 million (US$57.1 million), including overseas companies carrying on business in New Zealand, to prepare and publish an annual modern slavery statement.

The New Zealand regime is drawn from international models, but goes further than Australia's in several respects. The bill would require reporting not only on structure, operations and supply chains but also on incidents and complaints. It would further provide for a public register of statements and civil and criminal penalties for non-compliance, a departure from the Australian regime, which carries no penalties. If enacted, the regime would come into force six months after royal assent.

Conclusion

As the 2026 proxy season progresses, several regulatory developments will warrant close attention from boards and investors across Australia and New Zealand. The final shape of the fifth edition of the ASX Corporate Governance Principles and Recommendations will determine how expectations around board skills, diversity and disclosure evolve, while proposed shareholder approval requirements for significant transactions could give investors a greater direct say over dilution, delistings and changes in listing status. Meanwhile, sustainability disclosure is also entering a new phase on both sides of the Tasman. Together, these developments make the remainder of 2026 an important period for determining how regulatory expectations around governance, shareholder rights and sustainability reporting translate into company practice.

‍