Report on Changes in Ethics and Corporate Governance
Added on - 03 May 2020
Running head: CORPORATE GOVERNANCE AND ETHICSCorporate governance and ethicsName of the Student:Name of the University:Author’s Note:
1CORPORATE GOVERNANCE AND ETHICSIntroduction:The report is prepared for analysing the changes in ethics, corporate governance andcorporate social responsibility of Wesfarmers. For this purpose, analysis has been done using thetwo years annual report for the given organization. Changes in their structure of corporategovernance can be analysed by comparing annual report for year 2016 and 2011. Reportincorporates the discussion of structure of board, group of stakeholders and any public scandalsfaced by group. The application of Australian securities exchange guidelines in context ofWesfarmers have also been demonstrated. Furthermore, report discusses about the CarrollPhilanthropic model by providing evidence from the information gathered about Wesfarmers.Wesfarmers is one of the largest retailer operating in Australia having diverse businessoperations such as office supplies, home improvement, hotel and convenience, super market,liquor and departmental stores. It is the largest private sector having shareholder base of 530000and employee of around 220000. Providing shareholders with satisfactory return is one of theprimary objective of Wesfarmers (Wesfarmers.com.au, 2017).Discussion:Board structure of Wesfarmers and how it changes over the year:The composition of board of directors in year 2011 is assured of making compromisewith directors bringing an appropriate mix of experience, skills, diversity and expertise in thedecision-making of board. The board structure in year 2011 was comprised of 10 directors longwith eight non-executive directors. It is viewed by board that an appropriate mix of diversity,skills and expertise is possessed by board that assist them in delivering corporate objectives anddischarging responsibilities (Schneider & Scherer, 2015). Advisor to board on retail issues was
2CORPORATE GOVERNANCE AND ETHICSdone by Mr. Archie Norman who has significant experience in retail business (Aguilera et al.,2015). The deliberation of board is independent of management of business that has thelikelihood of materially affecting independent judgement and in regard to this, board areexpected to judge and bring reviews. At the date of this report, the association and positions ofall directors in office is reviewed by board and it was considered by them as in reported year thatout of all eight non-executive directors, seven of them are independent and Mr. Graham is notdeemed to be independent as it act as an investment adviser of company by virtue of his positionas Managing director of Gresham partners limited. It has been determined by board that exerciseof independent judgement of Mr. Graham would not interfere with relationship and it is believedthat he has been appointed in the best interest of organization because of expertise and sufficientknowledge that he brings to the board (Cule & Fulton, 2013).Structure of board of director in year 2011:(Source: Wesfarmers.com.au, 2017)The composition of board of directors in year 2016 comprise of 10 directors that involvedeight non-executive directors. The assessment of independence of board and the criteria against
3CORPORATE GOVERNANCE AND ETHICSwhich the materiality of information, facts and circumstances is determined in accordance withthe principles of Australian stock exchange. Independence of directors is assessed in relation toimportant factors as set out in the recommendation given by the Australian accounting standard.Relationship and position of all dire tots in office at the reporting year is reviewed by board thatconsiders that out of all the non-executive directors, seven directors are independent. Chairmanis considered as independent and directors Ms Vanessa Wallace is considered as independent asit has past relationship with various organization and her exercise with the independentjudgement in relation of affairs of company so that she is not compromising with the functions ofWesfarmers (annualreports.com, 2017). By virtue of position of Mr. James Graham as chairmanof Gresham partners limited, he is not considered as independent. Board has establishedRemuneration committee, Nomination committee, risk and audit committee in both the reportingyear.