Corporate Ethics and Governance of Stockland Corporation

CORPORATE ETHICS AND GOVERNANCE OF STOCKLAND CORPORATION
Contents
Executive Summary.........................................................................................................................2
Introduction......................................................................................................................................2
Stockland Corporate Governance....................................................................................................3
Board Orientation............................................................................................................................5
Accounting Theory and Corporate Governance..........................................................................5
Orientation Board composition Focus Key communications..........................................................5
Shareholders.................................................................................................................................5
Stockland’s sustainability disclosure...............................................................................................6
Corporate Social Responsibility......................................................................................................6
Workplace Ethics.............................................................................................................................7
Stockland Communications Using Legitimacy Theory...................................................................7
Conclusion.......................................................................................................................................9
References........................................................................................................................................9

Executive Summary
Sound Corporate governance is a necessity for efficient management of organizations in today's
business environment. Stockland, the case study company is one of the major investors in the
real estate industry. This study exploits the various corporate governance structures that
stockland company has exploited to remain competitive in the industry. Moreover, the company
board of directors and the management teams’ reports show the company commitment to
corporate disclosures. Corporate disclosures aim to enhance the shareholders and well as the
other stakeholder’s interest in the corporate activities of the company. This paper will also
address the various theories aimed at supporting the need for corporate disclosers in both
financial and non-financial aspects. The theories in accounting discussed as important tenets for
corporate disclosures include stakeholder theory, agency theory and legitimacy theory. This case
study discussed the usefulness of corporate disclosure both to the shareholders and the
stakeholders of the company using the theory stated above. The conclusion of the research on the
ethics and corporate governance of Stockland reveals that the company board of directors led by
the chairman is specifically concern with the shareholder's welfare. The various communication
in the disclosure ranging from remunerations, management fees, finance income, climate change,
and work ethics shows the commitment of the company towards safeguarding the interest of the
shareholders.
Introduction
Stockland is an Australian based company in the industry of real estate. It was Founded in 1952
to help create prosperous communities with dynamic town centers for residential purposes,
shopping and working space. The company deals with the regulation and development of real
estate properties in Australia, United Kingdom, and New Zealand. The reports of the company
revealed that its net worth of real estate assets is $18.2 billion becoming a robust real estate
group in Australia with a diversified portfolio. Stockland holds various real estate properties both
in the public sector as well as private assets ranging from retail town centers, industrial assets,
workplace and logistics assets, residential communities, and retirement villages.
Stockland annual reports considers the company to be among the leading real-estate developers
in the retail and shopping malls. Stockland is engaged in building and developing premium
retails malls in Australia. In the residential real estate sector, Stockland is considered the leading
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residential developer as it focuses on unveiling a wide range of master plan in housing
communities and retirement townships in Australia. The company management is fully engaged
in the planning and undertaking all it diversified portfolios in the real estate industry. This is
possible since the company also offers property trust management services to other companies.
The company’s group vision is to develop a meaningful long-term development of cities and the
country. This vision has placed the company in a good history of infrastructure development as
well as stakeholder’s maximization of wealth.
The primary company objective in safeguarding the stakeholder’s interest is delivering growth in
the earnings per share (Wang & Sarkis, 2017). This is possible through the company’s
commitment to creating quality communities and real estate assets and also exceeding the
customers’ expectations in the service delivery. To increase the value of the shares in the
securities market trading index, the company combined the trust unit of Stockland and the
Stockland corporation shares and traded as one security on the Australian securities exchange.
Furthermore, the Stockland Board engage in good corporate governance through where the board
is responsible for their decision-making strategies (Vafeas & Vlittis, 2016). The board also have
a balance of experience and skills to oversee the high standard of corporate governance,
integrity, and accountability required of a professional and ethical organization.
Stockland Corporate Governance
According to the chairman of the board of directors, governance of corporate behavior is an
integral part of the business. The expectations from the board members by the various
stakeholders of the company are high. Therefore, the board must remain focused together with
the leadership team in promoting an influential culture of transparency in the company (Urde &
Greyser, 2016). Moreover, just like any other industry in today’s business environment, the
building and construction industry is facing intense competition, globalization issues, and other
market risk factors. More broadly, sound governance in the building and construction industry is
essential in the societal development of housing for business and residential purposes. This is
because recognition of safety regulations and corporate social responsibilities in the construction
industry is more stringent in promoting safe houses.
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The Essentials to good corporate governance in an established company is the board of directors
led by the chairman of the board and its independent and executive directors (Tricker & Tricker,
2015). The shareholders of the company appoint the board of directors in order to safeguard the
interest of the shareholders of the company. The board of directors must satisfy the required
experience, statutory and legal issues before being appointed by the company.
Stockland board of directors consists of eight directors. This is the best size for sound corporate
governance. Since the size of the board is large enough, it provides a vast experience and skills
in dynamic interaction and participation for better performance. The ratio of independent
directors and executive directors is 7:1. This is another issue in corporate governance that
determines the level of independence of the board of directors. Non-executive directors who are
independent plays an essential role in balancing the executive director powers and making sure
no individual is dominant in decision making of the company(Rao & Tilt, 2016). Stockland
recognizes the vital role that independent directors play in securing the shareholders’ interests.
The board of directors of Stockland company has resolved to have a ratio of 7: 1 director a
majority being the non-executive directors. Furthermore, the company has resolved that the
chairman of the board and the managing director should be separate individuals. All these checks
and balances increase the independence of the board in acting at the best interest of the
shareholders.
Stockland chairman Tom Pockett, of the board, is an independent director and does not have any
managerial duty in the company. The chairman is a Non-executive director with high ethical
standards and acts with integrity and probity. The chairman message reiterates the commitment
of the board to enhance transparency and sustainability of their reporting to the stakeholders. For
instance, the company disclosed its climate-related risks in their financial reporting.
The managing director and CEO, Mark Steinert statement on the status of the company reveal a
strong balance sheet that positions the firm to take advantage of the many opportunities arising in
the changing business environment. The CEO is further committed to repositioning the company
to take advantage of the growing population and demographic trends experienced in Australia.
Stockland company have a remuneration policy that attracts and retain highly experienced and
committed directors to work as members of the board (Qu, Percy, Stewart, & Hu, 2018). The
directors are remunerated according to their performance to the firm overall goals. The chief
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