Assignment On Advance Financial Management

Running Head: ADVANCE FINANCIAL MANAGEMENT
Advance financial management
Name of the Student:
Name of the University:
Author note:

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ADVANCE FINANCIAL MANAGEMENT
Executive summary
This report is discussed about the corporate governance and its benefits, rules and regulation.
Then the governance rules and regulation according to the ASX and ASIC of Australian and
New Zealand Bank and commonwealth bank has been discussed. Then comparison has been
done to find the best performing company.

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ADVANCE FINANCIAL MANAGEMENT
Table of Contents
Introduction......................................................................................................................................3
Corporate governance......................................................................................................................3
Principle of corporate governance...............................................................................................3
Laws and regulation.....................................................................................................................4
Corporation Act 2001..................................................................................................................5
Process.........................................................................................................................................6
Rules............................................................................................................................................6
Roles of ASIC..............................................................................................................................7
Australia and New Zealand bank.....................................................................................................7
Area of non-compliances...............................................................................................................11
Commonwealth Bank....................................................................................................................12
Better company..............................................................................................................................15
Recommendation...........................................................................................................................17
Conclusion.....................................................................................................................................18
References list................................................................................................................................20

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ADVANCE FINANCIAL MANAGEMENT
Introduction
Corporate governance is a system consisting of some process and principle which ensure
that a company is governed for the best interest of all stakeholders. It is a set of rules and policies
that are used to direct and manage a company which is directly influenced by the board of
directors. It helps to promote corporate fairness, transparency and accountability (Edmans 2014).
A good corporate governance ensures adequate and effective decision making to achieve the
companies’ objectives, transparency in business transaction, meet all statutory and legal
compliances, protecting shareholders interest and ethical conduct of business. Main objective of
corporate governance is to maintain the company transparency for long term and to improve the
shareholders’ value and protect the interest of stakeholders by improving the performance and
accountability. Further its objective is to create an environment of trust and confidence (Aguilera
et.al, 2015)
Corporate governance
Principle of corporate governance
I. Shareholder recognition – It is the key component to maintain the company stock price.
Sometime small shareholders with little impact on the stock price are kept aside to make
interest of the majority shareholders. With the help of the corporate governance it will
ensure that all shareholders stands equally and allowed to attain the general meeting.
II. Stakeholder’s interest – Recognizing the legal, contractual, and social and market
obligation by the corporate governance of an organization can help the company to
establish a positive relationship with both internal and external of the company (Iatridis
2013).

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ADVANCE FINANCIAL MANAGEMENT
III. Board responsibility – All board member must be on the same page and share the same
view for a better future of the company. This could be possible by having a clear outline
of board responsibility (Mason and Simmons 2014).
IV. Ethical behavior – Violation of ethical behavior can cause loss of profit with massive
legal and civil issues. A proper code of conduct should be established among all members
of the board.
V. Business transparency – It is the key to promote shareholders trust by clearly stating the
company’s financial record, earnings and other information’s. The role and
responsibilities of the board toward the shareholders should be known.
Laws and regulation
 Corporate governance laws and regulation vary from state to state depending on the
needs of the organizations. This law has some impact upon tax obligation also. Corporate
governance is a legal person created by laws and regulation of different countries.
Corporate legal person allows the entity to hold properties in its own right without any
person. Organization is subject to common law of the country and various other laws and
regulation of business practice. Corporate governance become more important due to
increase in collapse of large number of corporation in 2002 due to frauds. Scandals like
Eron Corporation, world com and other which leads to the establishment of Sarbanes-
Oxley act. This act is established to restore the confidence of the public and shareholders
on the organization (Yermack, 2017)

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Corporation Act 2001
Corporation Act 2001 is Act set by the Australian law for dealing with business entities at
interstate level. It is regulated by the Australian Securities and Investment Commission to
maintain and improve the financial performance of the entities. There are mainly two types of
companies under the Corporation Act which are public company and proprietary companies
limited by shares. Corporation Act 2001 provides a wide range of programs and schemes to meet
the entities obligation. Some of the elements under this act are as follows:
 Regulatory scheme – Corporation Act 2001 regulates the company’s securities. It also
regulates the incorporation process of the company. Corporation act with other legislation
forms a regulatory framework which is applied in Australia (Westphal and Zajac 2013).
 Australian securities and investment commission – It administrate the Corporation act
with its wide range of functions. It regulates the principle and information source of the
company matters.
 Incorporation – Company has a separate legal entity form its directors which allow it to
enter into a legal proceeding, own properties and commence legal proceedings. A
Australian resident company incorporated under the corporation act receives a nine digit
Australian company number.
 Directors and officers – Management decisions are controlled by the board of directors
who are appointed by the shareholders. All decisions taken by the directors are for the
betterment of the company and shareholders which is controlled by the corporation act
(McCahery, Sautner and Starks 2016).