Case Study Analysis

Running Head: Case Study Analysis
CASE STUDY ANALYSIS

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Case Study Analysis
Table of Contents
Question 1: Advice: ASX Corporate Governance Principles and Recommendations as per the
case study.........................................................................................................................................3
Question 2: With reference to the Code of Ethics for Professional Accountants, use the following
American Accounting Association (AAA) Model..........................................................................4
Question 3: Report...........................................................................................................................5
Reference List..................................................................................................................................8

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Case Study Analysis
Question 1: Advice: ASX Corporate Governance Principles and Recommendations as per
the case study
The concerned agricultural company Far Faraway Pastoral Limited (FFA) has provided
some information regarding its board of directors to Samantha Gabrielle, audit personnel of
Samway Baker Fitzgerald (SBF). Based on the given information, it can be said if FFA has
breached any Corporate Governance Principles and Recommendations as mentioned by the
Australian Stock Exchange (ASX).
Independent Chair of the Board
FFA has three non-executive directors, whose names the company has been provided to
Samantha. Out of them, the person who is holding chair of the board is holding shares in FFA.
However, according to the principles set by ASX, the person-holding chair of the board should
be an independent director and a director being independent becomes doubtful if the person is a
shareholder of that particular company or associated with any shareholder of that company. In
this context, it can be said that it is the prior responsibility of the management of FFA to appoint
an independent chair of the board that is free from any interests and to act accordingly for the
best interest of the concerned company. This is because, an independent chairperson is vital to
contribute to the openness in making various decisions of the concerned company.
Maximum members of the board shall be independent
The board of directors of FFA comprises of the three personals, one of them to hold
shares of the concerned company and other person is a retired farmer who is also a major
supplier to FFA. According to the principles and recommendations provided by ASX, the
majority of the board members should be independent directors. The persons who are either
holding shares in that particular company or are associated with a material type business, such as
being a supplier of that particular company, are in a doubtful position of being independent
directors (Safari, 2017). In this context, it is advised to Samantha in order to Inform FFA that it
should appoint members of its board of directors who are independent, as it will strengthen the
implementation of the decisions made by the board. It will also reflect the clear interests of the
concerned company, and it will not be biased with the interests of the management.
Disclosure of the roles of the members of Board
FFA provided in its annual report for 30 June 2019 the personnel comprising the board of
directors of FFA. However, they have not mentioned the roles of each personnel of the board.