Has Corporate Governance in Australia Lost Its Way?

When leaders cross ethical lines, the consequences are usually swift and decisive. At least, that’s what we’re seeing overseas. CEOs who have been caught in conflicts of interest or inappropriate behaviour are being shown the door quickly, with boards and investors eager to protect the integrity of their organisations.

But in Australia? The story looks very different. Here, some of our highest-profile executives weather scandal after scandal and somehow emerge still holding power, often with board or investor backing. It raises an uncomfortable question: has corporate governance in Australia lost its way?

Lessons from abroad

Let’s start with a few recent examples from overseas.

Nestlé: The CEO was dismissed after it was revealed he had an undeclared conflict of interest – a relationship with a direct report. A clear breach of governance standards, met with swift action.
Astronomer: The CEO was caught in an affair with his Chief People Officer at a Coldplay concert. Both resigned soon after, with the reputational damage deemed incompatible with their leadership roles.
Drogbruk: The CEO was caught on camera snatching a signed hat from a child at the US Open. The response? A wave of public backlash, negative reviews on the company’s website, and reputational harm not just for the CEO and his family, but for the company itself.

Different situations, yes – but a common thread runs through them: the behaviour was, or became, public; it damaged trust; and consequences followed. Whether through dismissal, resignation, or reputational fallout, accountability was non-negotiable.

The Australian contrast

Now compare this to two recent scandals closer to home.

WiseTech Global Ltd: The CEO faced multiple allegations of undisclosed conflicts of interest, some of which were substantiated following an independent external review. The outcome? He was stood down from the CEO role – only to be re-employed as Executive Chair and Chief Innovation Officer, on a 10-year contract with a salary of $1m per year.
Mineral Resources Ltd: The CEO was revealed to have undeclared conflicts of interest and offshore tax arrangements that benefited him, and other MinRes senior executives, personally, at the expense of shareholders. The result? He remains as CEO, and investors continue to back him.

Despite the seriousness of these issues, the individuals at the centre of them not only kept their seats at the table – they consolidated them. In one case, a step sideways became a step up. In the other, shareholders appeared willing to turn a blind eye.

I see two themes emerging:

1. Different standards

The international scandals played out just as publicly as those in Australia, yet the responses couldn’t be more different. Overseas, accountability was swift. In Australia, it was lenient, sometimes seemingly non-existent.

So why the double standard? Is our threshold for accountability lower? Are boards and investors too protective of their own? Or have we simply become comfortable with a culture where governance rules bend to accommodate powerful leaders?

In both Australian cases, the CEOs are the original founders of the companies. But should that make a difference as to where the bar is set as to the level of integrity that is expected from them?

2. Tone at the top

Governance isn’t just about frameworks, policies, and annual reports. It’s about culture – and culture is set at the top.

When leaders are seen to sidestep accountability, the message to employees is clear: rules don’t really matter here. That attitude trickles down the organisation, weakening governance at every level. Why should the middle manager worry about conflicts of interest or bullying allegations if the CEO can shrug them off?

Tone at the top matters. When the example set is poor, governance becomes nothing more than a box-ticking exercise.

So, has governance lost its way?

These cases force us to ask some hard questions about the state of corporate governance in Australia. If overseas peers are willing to act swiftly in the face of misconduct, why aren’t we?

Perhaps it comes down to ownership structures, market dynamics, or the sheer influence of certain individuals. But whatever the reason, the result is the same: a weakening of trust in corporate governance.

If governance is the backbone of corporate trust, can Australia afford to treat it as optional at the highest levels?

Boards, investors and regulators need to ask themselves what message they are sending when they excuse – or even reward – behaviour that undermines trust.

When accountability fails at the top, it doesn’t just damage one company. It damages the credibility of governance as a whole.

I’d love to hear your thoughts: are these double-standards playing out anywhere else? Do you think Australian corporate governance standards are slipping – or is this just business as usual?

Claire Berry (CA, CFE, CPRM, AMIIA) is the Founder and Director of Green Pen Consulting, providing tailored risk management and internal audit support to risk and audit teams.

With nearly 20 years’ experience across audit, risk and governance roles, prior to establishing Green Pen Consulting Claire was Group General Manager – Risk & Internal Audit for an ASX100 entity in the chemical manufacturing industry.

Claire also authors the monthly Green Pen Digest newsletter, keeping readers up to date on the latest news and events across the accounting and auditing industries.