The Twelve-Year Question

The question. An ASX board decides whether a long-serving director is independent. The shareholders who vote on that director's re-election apply their own test, and it is not the same one. The 4th edition of the ASX Corporate Governance Principles lists service of more than ten years among the factors that may raise questions about a director's independence. The consultation draft of the 5th edition, released on 21 July 2026, keeps length of service as a factor and keeps the disclosure of each director's tenure, but no longer offers any numeric reference point. This paper asks what investors' own voting policies say instead.

What we examined. We read, verbatim, the published voting and stewardship policies held in the VINCIT QSV policy database in September 2026. 104 policy holders have positions that apply to ASX-listed companies, and 89 of them address director independence. Those 89 policies are the population for every figure below. The analysis counts policies, not votes, weights every holder equally, and identifies no individual investor or adviser.

How many set a figure. Twenty-six of the 89 (29%) state a period of board service after which a non-executive director is, or may be, no longer regarded as independent. Sixteen set twelve years, six set nine, three set ten and one sets twenty. The median and most common figure is twelve years.

When the tests bite. 23% of those thresholds have been reached by a director's ninth year on the board, 35% by the tenth and 96% by the twelfth. The window that matters for renewal is years ten to twelve, not the AGM at which a long-serving director stands for re-election.

Bright line or presumption. The policies split evenly. Thirteen apply the figure as a classification: beyond it, the director is not independent, whatever the board explains. The other thirteen treat it as a review or a presumption that a specific, evidenced explanation can rebut.

Who sets the figure. Three of the four proxy advisers with Australian-specific policies set one, spanning twelve to twenty years; the fourth notes that many boards consider the question once a director has served ten years or more, but states no figure of its own. 31% of international investors set a figure. Among the 18 Australian investors in the population, two do.

The board chair. Sixty-three of the 89 policies (71%) take a position on the independence of the board chair, and 79% of those support an independent chair. Where the chair is not independent, the requirement named most often is a lead independent director: 38% of chair positions require or expect one, a further 17% treat one as a mitigating factor, and one policy regards it as no substitute for an independent chair. Twenty-three of the 26 policies that set a tenure figure (88%) also support an independent chair, so the two tests compound for a long-serving director who becomes chair: where policies say how service is counted, the clock runs from first appointment to the board, not from appointment as chair.

What it means for ASX boards. Test independence against the register as well as the Principles, because the test that decides the vote belongs to the holders of the vote. Treat years ten to twelve as the decision window for renewal and the independence assessment. For the policies that will read an explanation, make it specific: the director's contribution, the evidence that judgement is unimpaired, and the succession plan. For the policies that classify, re-run the board's independent majority under a twelve-year test, because reclassifying long-serving directors can take independence below a majority and draw votes against other directors. Run chair succession on the board-tenure clock, and where the chair is not independent, appoint a lead independent director and disclose what the role can do.

The full paper sets out the regulatory context, the method and every figure in detail.

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