The corporate governance of Australian listed construction companies

This paper compares the compliance level of Australian Stock Exchange (ASX) listed construction and non-construction companies with the ASX Corporate Governance Council (CGC) recommendations on sound corporate governance. It also examines the difference in board characteristics between the two groups, paying particular attention to differences in board independence. It concludes that compared with the top 20 ASX listed non-construction companies, listed construction companies are less compliant overall particularly with regards to board structure, and have lower levels of independence both in terms of CEO/Chairperson duality, the ratio of executive to non-executive independent directors and independent membership of nomination, remuneration and audit committees. These conclusions are important because sound corporate governance has been associated with higher levels of organisational resilience derived from the reputational and financial benefits of greater transparency, market value, investor attractiveness and organisational performance.