InvestmentMarkets and Australian Shareholders’ Association highlight lessons from reporting season
The FY25 reporting season has delivered a clear reminder for investors: strong governance and honest communication matter just as much as the numbers. Confidence in the market is holding up, but results from some of Australia’s biggest companies have shown that without transparency and careful risk management, even solid profits can leave shareholders uneasy.
Darren Connolly, CEO of InvestmentMarkets, said the shift is evident across the investor community. “What we’re seeing is a strong expectation that companies do more than just deliver results. Investors are looking at leadership, governance structures, and the way risks are communicated. Less spin and more honesty,” he said.
Rachel Waterhouse, CEO of the Australian Shareholders’ Association (ASA), said three themes stood out this reporting season: optimism about the market outlook, sector-specific surprises such as CSL falling short of forecasts, and growing unease about disclosure. “Healthcare caught investors’ attention with CSL missing expectations, which was reflected in the immediate share price reaction,” Waterhouse said. “But the bigger issue is around communication. At James Hardie, for example, the gap between forecast and actuals raised serious questions about when the company knew and whether it could have told investors earlier.”
Qantas also remains under scrutiny, reporting a record profit and a record fine in the same period. For investors, the combination highlights both the strength and the risks of relying on brand reputation. “It’s not just about profits, it’s about governance and culture,” Waterhouse said. “Companies need to show they are investing in people, in their fleet, in systems and processes that build long-term trust.”
Connolly said this sentiment is important for self-directed investors. “Governance is front and centre. Investors are well aware that reputational risks can quickly turn into financial ones,” he said.
Broader policy concerns are also weighing on investors, particularly the proposed Division 296 tax on superannuation balances. The ASA has warned the measure undermines confidence, with Waterhouse noting that taxing unrealised gains “simply doesn’t make sense.” She said the change raises serious questions about how investors are expected to pay a tax that has no cash impact, and called instead for a holistic review of the tax system rather than piecemeal reforms.
For retail investors, the challenge extends beyond policy to whether their voices are being heard in a market dominated by institutions, ETFs and superannuation funds. Waterhouse said hybrid AGMs, direct engagement and proxy voting remain critical tools. “Companies that engage meaningfully with retail shareholders build stronger long-term support,” she said.
Connolly said demand for transparency and engagement is an ongoing theme. “Investors want to know not just the numbers, but the risks, and the issues too. They don’t expect everything to go perfectly all the time, and companies that are upfront with the bad news too, are the ones that attract long-term investor support,” he said.
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