Back to Global Corporate Governance Trends for 2026
One of the most visible trends in Australian governance today is the rise of targeted shareholder activism. Voting outcomes have become more precise, with protest votes now frequently directed at individual directors rather than boards collectively. Directors are being held accountable for perceived governance failings not only within their own companies but across the broader ecosystem of roles they hold.
The recent Institutional Shareholder Services-influenced protest vote linked to Qantas demonstrates how governance controversies can generate spillover effects beyond the company directly involved. In this case, a director otherwise regarded as uncontroversial saw support for her service on another board fall from 99% to 87% year-on-year, following ISS criticism related to her Qantas board seat. Similarly, directors are increasingly challenged on overboarding concerns, as investors question whether someone with multiple roles can meaningfully discharge a governance workload. In these cases, even strong performance is not a defense. One of Australia’s best-regarded chairmen—with an almost unblemished leadership record—felt the heat at his re-election (with a 14% vote against) based on overboarding perceptions due to his chair roles on three major ASX-listed businesses.
The rise in remuneration strikes further reflects this heightened investor assertiveness. Such strikes occur when over 25% of a shareholder vote goes against executive pay, triggering all non-executive directors to stand for re-election in the event of a second strike. While the number of strikes in the ASX 300 is down slightly from 2024, it remains at one of the highest levels in a decade. While shareholders are using strikes to signal general dissatisfaction with business performance or governance quality, there is also a focus on protesting against long-term incentive structures they view as misaligned with performance. Investors are also pushing for clearer ESG-linked performance metrics, particularly those tied to climate transition, and for simpler, more comprehensible remuneration disclosures. In response, many boards have begun revising their long-term incentive frameworks, adjusting measurement periods and engaging more openly with institutional investors to explain the rationale behind design choices.
Sustainability reporting is placing new demands on boards, as companies must demonstrate rigorous oversight of climate risk, scenario analysis, transition pathways and emissions disclosure. Yet climate is only the beginning of a broader shift. As the Australian government aligns itself with the Kunming–Montreal Global Biodiversity Framework, expectations for nature-related disclosures—currently voluntary through the Taskforce on Nature-related Financial Disclosures (TNFD)—are steadily growing. It is increasingly plausible that mandatory nature reporting will follow climate reporting as early as 2026.
At the same time, social risk reporting is becoming more prominent, driven by investor concern for supply chain integrity, labor practices and community impact. Indeed, Kmart found itself in court in 2025 defending against allegations of forced labor in its supply chain. A key part of its defense in the media was its social risk disclosures. Boards therefore face an expanding governance parameter, where sustainability oversight requires both deeper expertise and more frequent engagement.
AI has emerged not only as an operational enabler but as a governance issue in its own right. Many companies are applying three lenses to their AI approach: The first examines how the organization uses AI to maintain market leadership; the second focuses on the oversight of AI-related risks, including bias, safety and network integrity; and the third recognizes that individual directors now actively use AI in their personal capacities, requiring new safeguards and supporting technology. Some boards are experimenting with AI agents designed specifically for the board, trained on a secure collection of past board papers, annual reports and other archival materials. Similarly, cybersecurity expectations have escalated sharply. As a result, foundational cyber literacy is becoming a baseline requirement for board service. With structured, recurring cyber training and external assessments becoming normal, boards will see their role in digitalization oversight ramp up, especially as investors increasingly expect them to harness AI to improve their decision-making processes and outcomes.
Sprouting from the controversial rewrite of the ASX Corporate Governance Principles in 2024, organizations expect a less ambitious version to be released for comment in 2026. With investors and proxy advisors challenging the longstanding practice of presenting aggregated board skills, there is growing pressure to move toward individual-level reporting, ideally supported by externally validated assessments rather than self-reported judgments. Indeed, the Australian Prudential Regulation Authority (APRA) has already been urging the financial services sector to implement greater focus and transparency here. Large-cap company boards are adapting by expanding their skills categories, increasing the frequency of external board reviews beyond the standard three-year cycle and embracing contemporary models that feature continuous feedback, culture analysis and a closer examination of how committees interact with management.
At the same time, Australia’s regulatory posture continues to harden as the Australian Securities & Investments Commission adopts a more assertive enforcement philosophy. Rather than viewing breaches such as privacy lapses and failures to prevent money laundering exclusively as organizational issues, the regulator increasingly interprets them through the lens of directors’ duties. ASIC observations on the use of fines to materially influence corporate behavior are widely seen as a signal that it’s preparing to pursue breaches more frequently and aggressively. The Australian Competition & Consumer Commission has also widened its focus, particularly regarding misleading environmental claims, data security and consumer protection in digital environments. Meanwhile, the ASX has significantly increased the number of aware notices issued for unexplained price movements, reflecting a more vigilant approach to continuous disclosure.
Taken together, these forces are reshaping what it means to govern. Boards must now operate with greater transparency, deeper expertise and more agile oversight. The expectations on individual directors are growing—both in terms of competence and accountability—and the time commitment associated with board service continues to rise.
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