logo

Business Laws - Australian Security and Investment Commission’s Principle

11 Pages2583 Words285 Views
   

VICTORIA UNIVERSITY

   

BLO 2205 Corporate Law (BLO 2205)

   

Added on  2019-10-31

Business Laws - Australian Security and Investment Commission’s Principle

   

VICTORIA UNIVERSITY

   

BLO 2205 Corporate Law (BLO 2205)

   Added on 2019-10-31

ShareRelated Documents
Running head: BUSINESS LAWSBusiness LawsName of the studentName of the universityAuthor note
Business Laws - Australian Security and Investment Commission’s Principle_1
1BUSINESS LAWSQuestion A. The Australian Security and Investment Commission’s Principle 7 states that itis the rightful duty of a company’s head directorial board to identify risk and devise measures toundertake the task to correct/reduce them. In case if a company is incapable of identifying anddealing with the risk detected, not only will it affect the company as a whole but also affect itsstockholders. Such neglect may also affect the society, consumers and the current as well as thepotential investors and employees as a whole1. Certain propositions were kept by the ASX in regard to the topic at hand, one ofthem requires that the top directorial board make their stand and contribute to the formation of acommittee which will solely dedicate itself to risk management. The committee will prioritizethe handling of risk in all efficiency by conducting yearly reviews the framework of riskmanagement and insure its absolute readiness by implementing any new changes required2.Three members will be appointed as directors and will be bestowed with the power to deal withtheir task in utmost independence. It has been stated by the ASX that the directorial board in the company are requiredto disclose what necessary auditory details related to its build and overall functions in running ofthe organization. It is necessary that the company reveal any auditory material that might lead toa potential social, economical or environmental jeopardy and state the measure that it wouldimplement for their necessary corrections3. 1 Baxt, R., and Fletcher, K.L., Fridman, S., Corporations and Associations Cases and Materials on, (Butterworths, Australia, 10th edition, 2008).2 Parker, Clarke, Veljanovski, Posthouwer, Corporate Law,( Palgrave 1st edition 2012).3 Ciro T, Symes C, Corporations Law in Principle LBC Thomson Reuters, (Sydney, 9th edition 2013).
Business Laws - Australian Security and Investment Commission’s Principle_2
2BUSINESS LAWS In the scenario that is provided to us, it was seen that the directorial committee of acompany called the Ardent leisure is condemned for causing a small disaster and not havingmade any corrective measures for the correction of their failure. It has further been confirmedthat the company had not only failed to realize the risk that it had undertaken but didn’t bother totake measures for its mitigation in any way. It is known that if an accident were to occur in particular premises, all the damagecaused by the said incident falls on the shoulders of the current occupier. Hence, the lives thatwere claimed resulting to the said accident in our case are to be tackled by Ardent leisure. Anyframework adopted for the management of a potential mishap caused by a risk might haveprevented any anomaly in the first place4. The crisis that happened before the occurrence of the Dreamworld incident mighthave been dealt with if certain identification measures were in work. It can also be said that themeasures might have prevented several casualties. If a certain degree of Professionalism wasshown by the company, the disaster might have been prevented and the deceased and theirfamilies might have been at peace. Not only did the incident lead to a socio-economic andenvironmental loss, but it also had a bad effect on the company’s goodwill5. Question B. It is the legal obligation of the directorial board of a company to implement measurefor the identification and handling of risk related to any financial or business task and to alsoprepare a framework for the management of risk as said in the Section 7 under the good4 Li, G, Riley, S. Applied Corporate Law: A Bilingual Approach (LexisNexis 1st Edition 2009).5 Harris J, Corporations Law, (LexisNexis Study Guide 1st edition 2008).
Business Laws - Australian Security and Investment Commission’s Principle_3
3BUSINESS LAWScorporate governance. It was previously discussed that the company is required to start up acommittee with purpose to deal with the said task of assigning, finding and dealing with thesupposed risk that might lead to future anomalies and accidents as in the case that is provided tous6. It was further said that this committee has the independence to prioritise only on the riskfactor and work on the mitigation of any potential risk by taking a select few measures as inmaking the company cooperate by asking them for the full disclosure of all the documents thatshow risk, whether they be social, environmental, economical or financial. In this incident, it is seen that the company, Ardent leisure was supposed to rightfullyestablished a team in order to deal with the Dreamworld incident and to address the issues thathad now taken disastrous turns. Since such a team was never created, post crisis issues remaineduntouched and undealt with in that instance since the team could have taken measures forreconciliation and betterment by upholding the principle 7 of ASK, which as read before dealswith the risk management and finding and rectifying any sort risk that a company is liable to facein the near future events. As said before, if the presence of such a committee have resulted to amore sophisticated and handled approach to the risk at hand and the incident might have beensuppressed, the damage could have been reduced extensively, or it might have never happened tobegin with. So, it can be stated that the organisation not only failed to uphold the Principle 7 ofASX, but failed as a company to do right to the society and the men working for it7. It was obvious that Ardent Leisure would have to face the legal authorities and sufferconsequences for its actions of showing complete disregard for the risk framework of riskmanagement and the importance of identification and correction of risk. It didn’t only facecompetitive disadvantage in the market but the infringement of Provision 7 of ASX for the good6 Tomasic, R.,Jackson, J.,Woellner, R., Corporations Law - Principles, Policy and Process (4th Edition Butterworths., Sydney, 2002).7 Vermeesch,R B, Lindgren, K E, Business Law of Australia (Butterworths, 12th Edition, 2011).
Business Laws - Australian Security and Investment Commission’s Principle_4

End of preview

Want to access all the pages? Upload your documents or become a member.

Related Documents
The ASX Business Law
|10
|2323
|32

Risks and Implement Effective Measures
|12
|2603
|33

BLO 2205 Corporate Law and Risk Management
|10
|2321
|74

Corporate Law and Corporate Governance | Assignment
|10
|2356
|148

BLO 2205 Assignment on Corporate Law- Risk Management
|10
|2587
|42

BLO 2205 Corporate Law Risk Management
|11
|2611
|144