Analysis of Corporate Governance Practices of BHP Limited and Bellevue Gold Limited

This assignment analyzes the corporate governance practices of BHP Limited and Bellevue Gold Limited in Australia. It discusses the indicators of corporate governance, compares the practices of the two companies, and evaluates their strengths and weaknesses. The role of corporate governance in accounting and its impact on corporate failure is also examined. The assignment provides insights into the importance of effective corporate governance for the success of organizations.

Running Head: ACCOUNTING THEORY
ACCOUNTING THEORY
Name of the Student
Name of the University
Author Note

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Table of Contents
Part A.........................................................................................................................................2
Introduction................................................................................................................................2
Discussion..................................................................................................................................3
Corporate Governance...........................................................................................................3
Indicators of Corporate Governance......................................................................................3
Comparison............................................................................................................................5
Conclusion..............................................................................................................................5
Part B..........................................................................................................................................5
Reference..................................................................................................................................11

2ACCOUNTING THEORY
Part A
Introduction
The aim of this assignment is to do the analysis on the corporate governance practices
of the two companies of Australia. Under this report, discussion will be done on the
identification and illustrations of the two companies of Australia for disclosing strategies,
policies as well as practices of the corporate governance. For this, the companies that will be
considered will be BHP Limited and Bellevue Gold Limited. Moreover, questions relating to
number of directors, percentage of executive directors and non-executive directors, name of
the CEO as well as summary of their statement in the annual reports, percentage of the shares
held by the executive directors and percentage owned by the institutional investors and block
holders will be discussed. Further, comparison will be done on the indicators of the corporate
governance of the two selected companies as well as discussion will be done on strength,
weaknesses as well as adequacy of the practices and principlesof the corporate governance
adopted by the companies will be discussed1.
Company Overview
BHP Limited is the company headquartered in Australia, which discovers, acquires,
and develops as well as markets the natural resources worldwide2.
Bellevue Gold Limited is the Australian listed company that is engaged in exploration
of gold. The company has the long history in the advancement of the historic Bellevue Gold
Mine in the Western Australia3.
1 Tricker, R.B. and Tricker, R.I., 2015. Corporate governance: Principles, policies, and practices. Oxford
University Press, USA.
2 BHP. (2019). BHP | A leading global resources company. [online] Available at: https://www.bhp.com/
[Accessed 6 Jun. 2019].
3 Bellevue Gold Limited. (2019). Bellevue Gold Limited. [online] Available at:
http://www.bellevuegold.com.au/ [Accessed 6 Jun. 2019].

3ACCOUNTING THEORY
Discussion
Corporate Governance
The annual report of BHP Group discloses that the company complies with the
standards sets by the government and United Kingdom as well as with the governance
requirements as is summarized in the corporate governance statements, director’s report,
remuneration report and the financial statements. ASX listing rules requires the listed
companies for reporting the applications of the main principles as well as extent to which the
company have compliance with UK corporate governance code provisions4.
In case of Bellevue Gold Limited, they review all of its practices and policies of
corporate governance on annually basis for ensuring their appropriateness for current stage
development of the company. The company’s reviews are made against Principles and
Recommendations (third edition) of ASX Corporate Governance Council5.
Indicators of Corporate Governance
a)
Total Number of Directors- There is eleven directors in case of BHP Group and there are
four directors of Bellevue Gold Limited.
b)
Non-Executive Director- The total number of non-executive directors are 8, hence the
percentage is 73%. While there are two non-executive directors of the company and hence
the percentage is 50%.
c)
4 Bhp.com. (2019). [online] Available at:
https://www.bhp.com/-/media/documents/investors/annual-reports/2018/bhpannualreport2018.pdf [Accessed 6
Jun. 2019].
5Asx.com.au. (2019). [online] Available at: https://www.asx.com.au/asxpdf/20180919/pdf/43yg8wtwyj704h.pdf
[Accessed 6 Jun. 2019]

4ACCOUNTING THEORY
Independent Directors- There is one independent director of BHP group and in case of
Bellevue Gold Limited; there are not any independent directors.
d)
Details of Chairman: BHP group’s chairman is Ken MacKenzie. The statement of CEO
stated in the annual report is that the company is further strengthened and simplified,
sharpened their focus towards productivity and culture, enhancement of the capital allocation
framework as well as company has delivered the financial results. Moreover, the company
remains cautious about market outlook of short term, remains positive towards long term and
they are placed for meeting the demand of commodities needed by the world6.
The chairman of Bellevue Gold Limited is Raymond Shorrocks. He made the
statement that the company has made up the great strides for uncovering the potential for
prospects in historic gold. Moreover, he also stated that there is unique opportunity for the
company for unlocking full potential for historically high grade gold mines of Australia7.
e)
Shares hold by the Executive Directors- BHP Group’s executive directors holds total
number of 359,256 shares at the end of financial year of 2018 and in case of Bellevue gold
limited, shares held by the executive director is 200,000.
f)
6 Al-Bassam, W.M., Ntim, C.G., Opong, K.K. and Downs, Y., 2018. Corporate boards and ownership structure
as antecedents of corporate governance disclosure in Saudi Arabian publicly listed corporations. Business &
Society, 57(2), pp.335-377.
7 Alhazaimeh, A., Palaniappan, R. and Almsafir, M., 2014. The impact of corporate governance and ownership
structure on voluntary disclosure in annual reports among listed Jordanian companies. Procedia-Social and
Behavioral Sciences, 129, pp.341-348.

5ACCOUNTING THEORY
Shares hold by the Block holders & Institutional Investors- The institutional ownership of
BHP Group consists of 62.43% for BHP Billiton Limited and 59.33% for BHP Billiton Plc.
In case of Bellevue Gold Limited, it is 45.55%.
Comparison
After comparison of both the companies, it has been found that, both of them is
performing well, has good policy of corporate governance and they both follows principles as
well as recommendations of ASX corporate governance. The corporate governance practices
of both the company shows that it is adequate, effective and provides strength to the
operations and management of the company8.
Conclusion
Hence, it is concluded from the analysis that for the effectiveness of the company’s
operations and management, practices of corporate government is very important. After the
analysis of both the Australian company, it has been found that both companies are adhering
to ASX corporate governance principles as well as recommendations. Corporate governance
indicators indicate strong and adequate practices of corporate governance.
Part B
This part of will explain and analyze the role of the corporate governance in the
accounting. There will be wide demonstration of the corporate governance aspects that
includes practices relating to corporate failure, corporate governance approaches, ASIC and
CLERP 9 roles in Australia, independent directors, integrated reporting and ethics and their
reflections of the international perspective as well as development. This part will mainly
provide details and entire concepts of the corporate governance9.
8 Darko, J., Aribi, Z.A. and Uzonwanne, G.C., 2016. Corporate governance: the impact of director and board
structure, ownership structure and corporate control on the performance of listed companies on the Ghana stock
exchange. Corporate Governance, 16(2), pp.259-277.
9 Salvioni, D. and Gennari, F., 2014. Corporate governance, sustainability and capital markets
orientation. International Journal of Management and Sustainability, 3(8), pp.469-483.

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Corporate Governance Role in Accounting
Corporate governance is broadly defined as that mechanisms, processes as well as
relations that helps the organization in direction and control, which also involves balancing of
the stakeholders interests of the organizations. On three factors, corporate governance is
dependent that is industry, subject area and environment. In company’s context, corporate
governance reporting is set of the roles and the principles organizations are operated and
controlled. In many of the fields, corporate governance is applied such as accounting,
management, finance, economic, law, political science as well as sociology. Corporate
governance identifies distributing rights and responsibilities among all the corporation
members. Therefore, corporate governance helps in providing principles, rules as well as
recommendations to organization in relations to different aspects10. Following are the
important role in the corporate governance:
 Maintaining Board Structure: This is the main functions of corporate governance
for maintaining proper structure of company’s board of directors with the help of
providing different principles, rules and recommendations.
 Appointment of Director: Corporate governance sets out the procedures, rules and
principle for the appointment of the company’s director.
 Duties and Remunerations of Director: Corporate governance is liable for defining
director’s duties and the remunerations.
 Audit: Corporate governance sets out the guidelines for auditing of the organization.
 Internal Control: Corporate governance helps in ensuring that the board of the
directors must perform properly as well as positively to the internal control for
managing business risks of company11.
10 Young, S. and Thyil, V., 2014. Corporate social responsibility and corporate governance: Role of context in
international settings. Journal of Business Ethics, 122(1), pp.1-24.
11 Amba, S.M., 2014. Corporate governance and firms’ financial performance. Journal of Academic and
Business Ethics, 8(1), pp.1-11.

7ACCOUNTING THEORY
Practices of the Corporate Governance and Corporate Failure
In case when set of the rules and processes that forms the mechanism of the
company’s governance fails or is ineffective then in that case there would be disastrous
consequences for the company. Hence, the management should notice this sign of failure for
avoiding corporate failure. Following are some of the major issues that are faced by the
company relating to corporate governance that leads to corporate failure:
 The ineffectiveness of the mechanism of governance leads to the company’s failure.
Ineffectiveness of governance means the lack of committee of board as well as less
board members in the company.
 Audit committee and the non-independent board leads to the failure of corporate such
as the CEO of the company helps in fulfilling multiple roles in the different
committee.
 Inadequacy of the board qualified members who don’t have adequate knowledge of
their fields’ leads to the corporate failure.
 The management of the organization who have the responsibility for undertaking
various roles of structures of governance manages the company’s risk. Therefore, in
case the management does not perform the roles in proper way then it leads to the
corporate failure12.
Corporate Governance Approaches
In the respect of the organization, there are following approaches of corporate
governance:
12 Carnegie, G.D. and O’Connell, B.T., 2014. A longitudinal study of the interplay of corporate collapse,
accounting failure and governance change in Australia: Early 1890s to early 2000s. Critical Perspectives on
Accounting, 25(6), pp.446-468.

8ACCOUNTING THEORY
 Leadership Approach- This approach of corporate governance provides the required
guidelines for the practices of leadership in the organization. Leadership have to be
performed by the company in positive and proper manner.
 Audit Approach- In order to perform audit, corporate governance helps in
determining which company will be adopting local procedures of auditing for
performing audit as well as which company will be using process of international
audit for their business. Therefore, appropriateness of audit procedures and principles
will be determined by corporate governance.
 Balance of Power Approach- Under this approach, roles, obligations, functions as
well as power is provided by the corporate governance among the board members,
directors, managers as well as other important company’s members13.
ASIC Role
Australian Securities and Investment Commission is also termed as ASIC, which is
the independent Australian government body that acts as the corporate regulatory of the
Australia. In relations to the different responsibility areas, several roles are performed by
ASIC. However, one of the main role performed by ASIC is for setting out the different roles
as well as regulations for corporate governance, securities and derivatives, financial services,
financial literacy, insurance, consumer protection and different other institutions. Rules and
regulations provided for these areas, ASIC helps in ensuring that all functions as well as
performance of the company are performed fairly and ethically without undertaking and
involving in areas of fraudulent activities14.
CLERP 9 Role
13 Formentini, M. and Taticchi, P., 2016. Corporate sustainability approaches and governance mechanisms in
sustainable supply chain management. Journal of Cleaner Production, 112, pp.1920-1933.
14 Ramsay, I., 2015. Increased corporate governance powers of shareholders and regulators and the role of the
corporate regulator in enforcing duties owed by corporate directors and managers. European Business Law
Review, 26(1), pp.49-73.

9ACCOUNTING THEORY
CLERP 9 provides the set of the principles and rules for the auditors of Australia. In
recent years, CLERP 9 has introduced certain key changes in the corporate governance
regulations. It helps in providing the new rules as well as regulations for the independency
and qualifications of the auditor for ASX listed companies. Therefore following are certain
main functions performed by CLERP 9:
 It helps in providing the new as well as effective rules for the auditor’s qualifications
for the audit work of ASX listed companies of Australia.
 It sets out the norms for the auditors that are external in relations to their
independency15.
Independent Directors
The company’s non-executive director is the independent director, who helps the
organization for improving the credibility of the organisation as well as standards of
government with having no interest in firm’s profitability16.
Integrated Reporting and Ethics
The integrated reporting and ethics helps in ensuring the fairness and trueness in
reporting of the company’s information to their stakeholders. The published information by
the company in the annual report should must provide the true information relating to the
particular company for their readers, which is one of the main objectives of the integrated
reporting as well as ethics17.
International Development
15 Shrivastava, P. and Addas, A., 2014. The impact of corporate governance on sustainability
performance. Journal of Sustainable Finance & Investment, 4(1), pp.21-37.
16 Jizi, M.I., Salama, A., Dixon, R. and Stratling, R., 2014. Corporate governance and corporate social
responsibility disclosure: Evidence from the US banking sector. Journal of Business Ethics, 125(4), pp.601-615.
17 Amran, A., Lee, S.P. and Devi, S.S., 2014. The influence of governance structure and strategic corporate
social responsibility toward sustainability reporting quality. Business Strategy and the Environment, 23(4),
pp.217-235.

10ACCOUNTING THEORY
The effectiveness of the corporate governance helps the organization in the
development of their business and increasing the firm’s efficiency. Therefore, the
requirements of the corporate governance is necessary for the company’s development. The
Corporate governance also provides the different principles for the organizations that also
helps the organization for developing internationally.
Hence, it can be said that the corporate governance is overall combination of the
principles and rules that divides the functions and right among all the board members,
directors as well as management of the firm. Moreover, corporate governance performs
different roles in the company’s development with the help of providing the principles and
guidelines to the companies. Moreover, any ineffectiveness in the corporate governance leads
to the corporate failure18.
Reference
Al-Bassam, W.M., Ntim, C.G., Opong, K.K. and Downs, Y., 2018. Corporate boards and
ownership structure as antecedents of corporate governance disclosure in Saudi Arabian
publicly listed corporations. Business & Society, 57(2), pp.335-377.
18 Kolk, A., 2016. The social responsibility of international business: From ethics and the environment to CSR
and sustainable development. Journal of World Business, 51(1), pp.23-34.

11ACCOUNTING THEORY
Alhazaimeh, A., Palaniappan, R. and Almsafir, M., 2014. The impact of corporate
governance and ownership structure on voluntary disclosure in annual reports among listed
Jordanian companies. Procedia-Social and Behavioral Sciences, 129, pp.341-348.
Amba, S.M., 2014. Corporate governance and firms’ financial performance. Journal of
Academic and Business Ethics, 8(1), pp.1-11.
Amran, A., Lee, S.P. and Devi, S.S., 2014. The influence of governance structure and
strategic corporate social responsibility toward sustainability reporting quality. Business
Strategy and the Environment, 23(4), pp.217-235.
Asx.com.au. (2019). [online] Available at:
https://www.asx.com.au/asxpdf/20180919/pdf/43yg8wtwyj704h.pdf [Accessed 6 Jun. 2019].
Bellevue Gold Limited. (2019). Bellevue Gold Limited. [online] Available at:
http://www.bellevuegold.com.au/ [Accessed 6 Jun. 2019].
BHP. (2019). BHP | A leading global resources company. [online] Available at:
https://www.bhp.com/ [Accessed 6 Jun. 2019].
Bhp.com. (2019). [online] Available at:
https://www.bhp.com/-/media/documents/investors/annual-reports/2018/
bhpannualreport2018.pdf [Accessed 6 Jun. 2019].
Carnegie, G.D. and O’Connell, B.T., 2014. A longitudinal study of the interplay of corporate
collapse, accounting failure and governance change in Australia: Early 1890s to early 2000s.
Critical Perspectives on Accounting, 25(6), pp.446-468.
Darko, J., Aribi, Z.A. and Uzonwanne, G.C., 2016. Corporate governance: the impact of
director and board structure, ownership structure and corporate control on the performance of
listed companies on the Ghana stock exchange. Corporate Governance, 16(2), pp.259-277.

12ACCOUNTING THEORY
Formentini, M. and Taticchi, P., 2016. Corporate sustainability approaches and governance
mechanisms in sustainable supply chain management. Journal of Cleaner Production, 112,
pp.1920-1933.
Jizi, M.I., Salama, A., Dixon, R. and Stratling, R., 2014. Corporate governance and corporate
social responsibility disclosure: Evidence from the US banking sector. Journal of Business
Ethics, 125(4), pp.601-615.
Kolk, A., 2016. The social responsibility of international business: From ethics and the
environment to CSR and sustainable development. Journal of World Business, 51(1), pp.23-
34.
Ramsay, I., 2015. Increased corporate governance powers of shareholders and regulators and
the role of the corporate regulator in enforcing duties owed by corporate directors and
managers. European Business Law Review, 26(1), pp.49-73.
Salvioni, D. and Gennari, F., 2014. Corporate governance, sustainability and capital markets
orientation. International Journal of Management and Sustainability, 3(8), pp.469-483.
Shrivastava, P. and Addas, A., 2014. The impact of corporate governance on sustainability
performance. Journal of Sustainable Finance & Investment, 4(1), pp.21-37.
Tricker, R.B. and Tricker, R.I., 2015. Corporate governance: Principles, policies, and
practices. Oxford University Press, USA.
Young, S. and Thyil, V., 2014. Corporate social responsibility and corporate governance:
Role of context in international settings. Journal of Business Ethics, 122(1), pp.1-24.