Corporate governance: Principles, policies, and practices

Running Head: Corporate Governance
Corporate Governance
Name of the Student
Name of the University
Author Note

1
Corporate Governance
Table of Contents
Part A.........................................................................................................................................2
Part B..........................................................................................................................................4

2
Corporate Governance
Part A
1. The two companies which have been selected are BHP Group and Rio Tinto and their
strategies, policies and practices of corporate governance are discussed below-
BHP Group-
According to BHP Group, they believe in high quality governance support for the
creation of long term value as good governance leads to good business. The approach of
BHP is to adopt the standards of governance in Australia, the United States and the
United Kingdom. The Financial Reporting Council has released the UK Corporate
Governance Code and the Guidance on the Effectiveness of Board of 2018 in July 2018.
It helps to describe the importance of demonstrating the corporate governance structure
through reporting and how it helps to achieve wider objectives by contributing in the
long-term sustainable success (Bhp.com, 2020).
Rio Tinto-
According to Rio Tinto, they produce those materials which are important for human
progress. This purpose requires them to work in remote and sensitive locations which are
owned by indigenous people. The values of Rio Tinto put emphasise on delivering
products with long lasting benefits for the owners of the company as well as for the
community in which they operate. The group has launched its first integrated sustainable
strategy in 2018. According to this strategy, the group has committed to adopt high
standards, aiming beyond the legal requirements and issuing of materials for the business
and the stakeholders. At the same time, they lead to innovate few key areas which will
strengthen their contribution in the society and sharpen their competitive advantage
(Riotinto.com, 2020).

3
Corporate Governance
2. Computation of the following indicators of corporate governance collected from the
annual reports of BHP Group and Rio Tinto-
Particulars BHP Group Rio Tinto
a. Total number of
directors
15 directors 8 directors
b. Percentage of non-
executive directors
46.66 % 100 %
c. Percentage of
independent
directors
66.66 % 100 %
d. Chief Executive
Officer
Andrew Mackenzie Jean- Sebastian Jacques
Summary of CEO’s
statement
According to him, BHP is
successful when the people
start their day with a
purpose and ends with
accomplishment and they
have an inclusive and
cultured team with good
relationships between the
suppliers, customers and
communities.
According to the CEO,
Rio Tinto has a global
tailing standard since 2015
and the financial year
2018 has been another
solid year fir them as they
have declared $13.5
billion cash returns to the
shareholder. It has been
highest in the history of
Rio Tinto
e. Percentage of shares
hold by executive
2.60 % 11.8 (multiple base fee)