Strengths and Weaknesses of TFS (Quintis) Corporate Governance Practices

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ASSIGNMENT 1
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Assignment 1
Question One
(i) Strengths and Weakness I TFS (Quintis) Corporate Governance Practices
There are number of strengths evidence in TFS (Quintis) corporate governance. First, the
board is mainly committed in ensuring that the organization’s responsibilities and obligations
to numerous stakeholders are all fulfilled (Quintis Ltd 2017). This is in line with set
requirements of corporate governance structure, where an organization is required to have
governance structure that is in line with purpose of the firm and complexity of its functions.
The board size and structure is optimal in line with its tasks. In fact, the management and
board are mainly committed to high standard of the corporate governance, ensuring that the
organization complies with Corporate Act 2001, Company constitution, ASX Listing Rules
as well as other applicable regulations (TFS Corporation Ltd 2015). In fact, the firm followed
ASX corporate governance principles and recommendations where its board members
considered all the recommendations to become a suitable benchmark for their corporate
governance. This is a strong point for the company corporate governance practices as it
enable the board to offer full disclosure as well as reasons for adoption of their own practices
in line with if not or why not regimes.
Generally, based on the company corporate governance statement, it is evident that TFS
(Quintis) has fairly elaborates governance structure on the basis of their partners interests as
well as powers (Quintis Ltd 2018). Further, the chair of the Board is independent; this enable
him to carry out his leadership and effective evaluation of performance of the board,
facilitating real contribution of Directors and promotion of respectful and constructive
relation between the management and board members. Basically, his functions are all well set

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in details in Board Charter making it easier for the Chair to carry out his duties. Furthermore,
the firms has established Corporate Code of Conduct in providing guidance in line with
ethical, legal as well as other obligations in legitimating the stakeholders and accountability
and responsibility needed for organization’s employees for investigating and reporting
unethical practices (Quintis Ltd 2017).
Besides, the board has established Audit Committee with formal charter explaining their
functions, composition, authority, and mode of operations as well as their responsibilities.
The firm ensures that the external auditor attends annual general meeting in answering the
questions regarding conduct of audit, preparation as well as content of the auditor’s report,
auditor’s independence as well as accounting guidelines adopted in line to conduct of audit
(TFS Corporation Ltd 2013). Another chief strength in TFS corporate governance is the fact
that the firm implemented Investor Communication Policy in ensuring financial market and
shareholders have timely admission to material data regarding the firm. There is also strength
where the board has established Remuneration Committee. This is a major strength for the
company since it enhances effective remuneration for different personnel working within the
firm.
Furthermore, presence of established risk management committee is a major strength for TFS
since it makes it easier for the company to determine organization’s risk profile, overseeing
as well as approving the risk management policies and strategies (Quintis Ltd 2016). With
established risk management committee, the company is able to manage and recognize
probable risks and to consider possible investment opportunities available for a profitable
operation. Presence of Investor Communication Policy is another major strength for the
company since it enhances timely access to the material information by financial market and
shareholders regarding the firm.

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Some of its weaknesses include the fact that the firm lacks Nomination Committee. This
resulted to the board carrying out duties and responsibilities which would otherwise be
undertaken by Nomination Committee. Another weakness of TFS corporate governance
practices is that the firm lack internal audit function. In this case, processes employed in
managing what internal audit role would conduct the roles are setting out Audit Committee
charter (Quintis Ltd 2018). Another weakness is that the company failed to make sufficient
research while investing in Sandalwood. Further, it is unethical and irresponsible for TFS to
disclose wrong information to its stakeholders without taking into account consequences this
could bring to these individuals and to the company (Quintis Ltd 2016). Basically, every firm
is required to give appropriate information to its stakeholders so as they are capable of
making sound decisions regarding an investment.
(ii) How Corporate Governance At TFS (Quintis) Might have Contributed to Its
Demise
In spite of TFS making semi-annual incomes and sales, the company collapsed for a number
of corporate governance practices. Thus, the corporate governance at TFS contributed greatly
to its demise. For instance, the senate committee recommendations as well as government
responses failed to address significant structural defects within the firm MIS models and used
the company failure in illustrating that deficiencies apparent from the earlier failures were
still relevant (Quintis Ltd 2018). Furthermore, the analysis by the board demonstrated that
several regulatory changes by ASIC were insufficient in overcoming the deficiencies
prevalent or inherent in TFS MIS business model. Besides, the special tax concessions or the
regulatory changes and substantive policies by the Committee were unwarranted and induced
unsophisticated investors in making risky or ill-informed investments including taking highly
leveraged positions leading to inefficient allocation of the capital (TFS Corporation Ltd