Business and Economic Research

This study examines whether the compliance with the audit committee recommendations which the Australian Stock Exchange (ASX) Corporate Governance Council (2003, 2007, 2010, 2014) put forward as part of its corporate governance reforms has enhanced corporate performance of ASX listed companies. Using company performance variables for 97ASX listed companies in the materials sector, the study estimates six different company performance models under two major categories of accounting performance indicators and investor performance indicators. Result clearly suggest that among corporations that operated within the materials sector and ranked in the top 500 companies listed on the ASX, those that complied with ASX recommendation of audit committee requirements, have achieved a higher corporate performances as measured by return on assets (ROA) and return on equity (ROE) as opposed to those firms that did not comply with the recommendation.