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Concept of Corporate Governance - Doc

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Added on  2021-06-18

Concept of Corporate Governance - Doc

   Added on 2021-06-18

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Running head: AUDIT, ASSURANCE AND COMPLIANCE Audit, Assurance and ComplianceName of the StudentName of the UniversityAuthors NoteCourse ID
Concept of Corporate Governance - Doc_1
AUDIT, ASSURANCE AND COMPLIANCE1Table of ContentsExecutive Summary:..................................................................................................................2Introduction:...............................................................................................................................3Implementation of ASX Corporate Governance Principles:......................................................3Risk Assessment:.......................................................................................................................6Nature of the company:..............................................................................................................6Market Overview:......................................................................................................................6Regulatory Authority:................................................................................................................7Business Strategy:......................................................................................................................7Relevant Audit Risk:................................................................................................................17Steps taken to reduce the risks:................................................................................................17Conclusion:..............................................................................................................................18Reference List:.........................................................................................................................19
Concept of Corporate Governance - Doc_2
AUDIT, ASSURANCE AND COMPLIANCE2Executive Summary: The concept of corporate governance is regarded as the system of rules and procedure that isused by the organization for directing and controlling. Corporate governance is concernedwith balancing the interest of the organization’s several stakeholders, management,financiers, government and community. The present report focuses on the implications of theASX principles of corporate governance for BHP Billiton. The study would conceptuallyprovide an explanation of the corporate governance principles applied by the BHP Billiton.Additionally, a risk assessment relating to relevant business risk for BHP Billiton would beexplained as well with nature of the company’s business and the market overview.
Concept of Corporate Governance - Doc_3
AUDIT, ASSURANCE AND COMPLIANCE3Introduction: BHP Billiton is one of the Anglo-Australian multinational mining, petroleum andmetal company. BHP Billiton is a duel listed public company having its headquarter inMelbourne, Victoria in Australia (BHP Billiton 2018). BHP Billiton was founded during theyear 1885 and in the year of 2017 the company was ranked as the world’s largest miningcompany based on the market capitalization and held as the Australia’s third largest companyin terms of revenue that significantly triple folded between 2004 and 2012. BHP Billiton was formed in the year 2001 with the merger of between the BrokenHill Proprietary Company Ltd and Anglo-Dutch Billion Plc turning out to be a dual-listedcompany. BHP Billiton Australia limited is primarily listed on the Australian SecuritiesExchange while the English registered PLC is primarily listed on the London Stock Exchangeand it is held as the constituent of the FTSE 100 index (BHP Billiton 2018). The majorpurpose of the stud is understanding the corporate governance principles of BHP Billiton andlay down the comprehensive explanation of the corporate risks. Implementation of ASX Corporate Governance Principles:The philosophy of the BHP Billiton corporate governance goes further than theobedience. The company believes that a high quality governance structure helps in acting asthe support in the long run value creation. Strong process is placed to make sure thatdelegation of authority flows through the Board and executive leadership team into theorganization. Meanwhile the responsibility of the board flows upward from the group toshareholders (Dodd 2017). The charter of the governance framework of the BHP Billitonembodies the corporate purpose, strategy and values to foster culture and higher ethicalstandards and corporate integrity.
Concept of Corporate Governance - Doc_4
AUDIT, ASSURANCE AND COMPLIANCE4As the part of shareholders rights it engages with the shareholders and communicateswith them to make their views known. BHP Billiton uses the wide range of formal andinformal medium of communication to engage with the shareholders (Tricker and Tricker2015). Additionally, BHP Billiton has robust mechanism of ensuring that all the directors ofthe company should remain aware of the issues raised and have the better understanding ofthe present views of the shareholders. In compliance with the laying the foundations for management and oversight the roleof the board is to represent the shareholders. The board of the BHP Billiton responsiblycreates value and delivers the value with the help of effective governance (Allen 2017). Theboard of directors lay down the solid foundations in making a contribution in the decisionmaking process. The governance report of the board provides that BHP Billiton has adoptedand implemented the foundations of reserving its considerations and decision makingauthority of delegating the responsibilities. The document of the BHP Billiton governancestates the role of board’s chairman and the role and conduct of the Non-Executive Directors.The governance documents provides secretary of the company as the accountable person foradvising the chairman, the board and the directors regarding the subject of governanceprocedure. In accordance with the principle of structure of board composition BHP Billitonpresent has nine members. The non-executive directors are regarded by the board as theindependent management and free from any form of business associations or any othercircumstances that may materially create an interference with the board’s objectives(McCahery et al. 2016). The board of directors of BHP Billiton have maintained a suitablebalance the executive and non-executive directors in order to promote the interest of theshareholders that govern BHP effectively.
Concept of Corporate Governance - Doc_5
AUDIT, ASSURANCE AND COMPLIANCE5Agreeing to the principles of Integrity in corporate reporting Risk and the auditcommittee of BHP Billiton helps in making sure that the financial statements are inaccordance with the integrity. The risk and the audit committee of the BHP Billiton assessesand provides recommendations to the board regarding the correctness of the accountingpolicies and judgments to company with the relevant accounting standards (Aguilera, Judgeand Terjesen 2018). The company has included formal adoption of the financial statements sothat BHP Billiton can maintain the integrity of financial reporting. Complying with the principles of remuneration the company has set up aremuneration committee that helps in provides assistance to the board regarding the policy ofremuneration and its detailed application to CEO and general application to each of theemployees (Armstrong et al. 2015). The company has adopted longer term incentive plans todetermine the degree of rewards. BHP Billiton complies with the appropriate legal andregulatory requirements that are related with the matters of remuneration. BHP Billiton identifies and manages business risks as it covers each of the asset andprovides assistance to the management in rendering necessary information so that it can allowthe risk and audit committee to properly discharge their responsibilities (Fox et al. 2016).BHP Billiton has the appropriate management committee and performs the necessaryfunctions of monitoring the inclusive governance of the company.BHP Billiton directors respects the rights of the shareholders by providing financialinformation to its shareholders with the fair and understandable information so that they canassess the position of BHP Billiton, its securities, performance and business strategy(Rodriguez-Fernandez 2016). BHP Billiton has placed considerable corporate governanceframework in place which comprises of management presentation of financial statements toits shareholders.
Concept of Corporate Governance - Doc_6

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