Blackmores Ltd: Corporate Governance and Risk Management Analysis

AUDIT, ASSURANCE & COMPLIANCE

Blackmores Ltd
Executive summary
In the modern global scenario, an organization’s success clearly relies on its various
strategies that allow it to attain all goals and objectives. The major role in this context is
played by adoption of corporate governance practices or principles and management of risks.
This highlights the fact that implementation of proper risk management strategies and
corporate governance together can allow an organization survive in the market and
outperform their competitors as well. With the help of this report, the evaluation of
Blackmores Ltd has been taken into account for in-depth analysis. The company is listed on
the Australian Stock Exchange and has adhered to the principles of corporate governance
within its affairs. Moreover, this report initiates with the implications of ASX Corporate
Governance Principles that has been looked after by Blackmores Ltd and its procedure of risk
management to tackle adverse situations. Thereafter, the auditing standard of ASA 570 has
been discussed to enhance the discussion that is also accompanied by various ratio
computations.
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Blackmores Ltd
Contents
Introduction...........................................................................................................................................3
Implications of ASX Corporate Governance Principles..........................................................................3
Risk assessment.....................................................................................................................................6
Conclusion.............................................................................................................................................8
References.............................................................................................................................................9
Appendix.............................................................................................................................................11
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Blackmores Ltd
Introduction
In the corporate environment of Australia, there has been several alterations in the industry of
consumer staples. In relation to Blackmores Ltd, the company is involved in the
development, marketing, and sales of health products for animal and humans that includes
mineral, herbal, and vitamin nutritional supplements. The company’s primary segments
comprise of China, Australia, and others. The company was founded in the year 1930 and is
in Warriewood, Australia. It offers its items and services through pharmacies, online stores,
merchandizers, groceries, health food stores, and various practitioners. Because of its
strategies and measures, the company has gained the position of number one health food store
brand in relation to ‘Fusion Health’ and number one practitioner brand in relation to
Bioceuticals. Moreover, this is the reason why the company has been regarded as the most
trusted brand in relation to supplements and vitamins in Australia (Blackmore, 2017).
Overall, the strong operations in 2017 have assisted Blackmores in attaining a major position
in the entire industry.
Implications of ASX Corporate Governance Principles
Blackmores Ltd has appropriately adhered to the principles of corporate governance as listed
under the recommendations of ASX. This can also be proved through its annual report and
statement of corporate governance as disclosed under reporting guidelines. The various
corporate governance principles adhered to by the company are as follows:
a. Laying enhanced foundations for oversight and management
The company’s Board is liable for the governance framework that operates under the
approved policies, practices, and charters of the Board. Further, the board committee assists
the Board in fulfilling their role of governance. Moreover, such committee together with the
Board reviews the governance framework of the company and its related practices to ensure
they align with statutory changes. The Board has also designed a formal charter that sets out
structure, composition, and responsibilities of the Board. The matters that necessitate board
approval are also included in such charter (Peirson et. al, 2015). Besides, prior to the
appointment of directors, the Board adopts proper checks and offers shareholders with
significant information that is important to the decision of re-electing or electing a director.
Nevertheless, such directors attain formal engagement letters that sets out conditions, terms,
and expectations of their engagement. The company also has comprehensive guidelines in
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