Corporate Governance and Ethics

This research focuses on the factors of corporate governance and ethical sustainability in Southern Cross Media Group Limited. It explores the existing framework and its impact on the organization in terms of corporate governance, board orientation, and organizational communication.

Running Head:CORPORATE GOVERNANCE AND ETHICS
CORPORATE GOVERNANCE AND ETHICS
Name of the Student:
Name of University:
Author Note:

1CORPORATE GOVERNANCE AND ETHICS
Executive summary
Southern Cross Media Group Limited is one of the leading organisation in Australia that is
related to the media and entertainment industry in Australia. The company has a profound
popularity for its corporate governance and ethical sustainability. Therefore, this research aims to
focus on those factors and willing to find out the existing framework that is considered to be one
of the major factors for the progress of this organisation. Therefore, in three segments the report
tries to elucidate the understanding in terms of the corporate governance, boar orientation and the
organisational communication. All these factors are interlinked and facilitate an in-depth analysis
on the subject.

2CORPORATE GOVERNANCE AND ETHICS
Table of Contents
Introduction......................................................................................................................................3
Corporate governance..................................................................................................................4
Independent and non-independent actors................................................................................4
CEO and Chairperson..............................................................................................................5
Remuneration report................................................................................................................6
Company plans........................................................................................................................6
Board orientation.........................................................................................................................7
Most powerful stakeholder......................................................................................................7
Character of the proposed theory.............................................................................................8
Personal focus..........................................................................................................................9
Company communication..........................................................................................................10
Conclusion.....................................................................................................................................11
Reference.......................................................................................................................................13

3CORPORATE GOVERNANCE AND ETHICS
Introduction
The mission and vision of Southern Cross Media Group Limited (SCA) is highly related
to its clients and employees in order to set a better entertainment practice within Australia. The
winning aspiration and focusing on the people paves the way for SCA to establish its market
with high profile national and local celebrities through the dedicated employees. It can be argued
that extensive focus and recognition on the employees is the most aspiring and strategic measure
that Southern Cross Media Group Limited is followed to procure effective and better
organisational practice. It is also resembled with the code of ethics and the code of conduct that
the organisation maintains for sustainable business activities. The culture and diversity in
Southern Cross Media Group Limited are delivering an ethical business practice for the
company. It can be argued that the culture in SCA is shaped by its talented and creative people
and the organisation facilitates effective measure for getting competitive advantage in the
Australian market.
Rapid growth is the key characteristics for the Australian entertainment and media
market. From the annual report it can be figured that there is an annual growth of 3% in the
entertainment and media market of Australia (Southerncrossaustereo.com.au, 2018). The market
forecast has confirmed that there is a growth of 3% in CAGR and it will be considered as a
promising measure for SCA to expand its market effectively. Marketing is considered to be an
important aspect for the entertainment and media market of Australia and for this the media
companies has to keep an eye on the technological implementation and the creative visions. The
current revenue of the entertainment and media industry of Australia is $1.27 billion or 65% of
thee advertising market. Due to such impressive development and lucrative opportunity it

4CORPORATE GOVERNANCE AND ETHICS
becomes a pertinent measure for the business organisations to perform effectively for getting
effective means of success and profitability in the market. Therefore, it is important for SCA to
imbue advanced technology and innovative practices as better sustainability measures. For SCA
also this industrial framework also suits its code of conduct while doing business in the
Australian market.
As far as the background of business activities of Southern Cross Media Group Limited,
it can be stated that SCA is the biggest entrainment company in Australia with its encapsulation
of 95% of Australia’s population. There are both the digital media and the radio stations that help
the organisation to expand the market of SCA effectively in Australia. For instance, The Triple
M and Hit Networks of SCA own 78 radio stations in addition to 7 digital radio stations in not
only the cities and metropolitans but the regional parts are also get connected with the radio
coverage of SCA (Southerncrossaustereo.com.au, 2018). Apart from that, there are 86
broadcasting signals Southern Cross Media Group Limited has in the form of Nine Network,
Seven network and the Network Tens programming. The premium quality of audio and visual
brands are supported by the social media coverage, live events, video and online streaming that
facilitate a better and effective measure for SCA with online podcasting network of Australia.
Corporate governance
Independent and non-independent actors
From the research of McCahery, Sautnerand Starks (2016) it can be seen that every
organisation consists of a group of independent and non-independent actors who are responsible
to participate in all the decision making practice of the organisation. The independent actors are
generally influence the decision making from outside the organisation. It means the independent

5CORPORATE GOVERNANCE AND ETHICS
actors are not directly involved with the operational system of the organisation. Mainly the
chairman and independent directors are identified as the independent members of the
organisation who are responsible to advice the management team of an organisation (Yermack,
2017). On the other hand, the management team is the core decision making body for the
betterment of the organisation. It is comprised with the CEO, CFO and other listed senior
managers of the organisation. Based on that, SCA has 6 independent members in the Board of
Directors. Peter Bush is the Chairman whereas Leon Pasternak is the Deputy Chairman of the
Board. Apart from that 4 other independent directors are there who are performing properly for
suggesting the senior management in decision making. Apart from that there are 6 non-
independent members in SCA under the leadership of the CEO and Managing Director Grant
Blackley (Southerncrossaustereo.com.au, 2018). Moreover, the CFO of the organisation Nick
McKechnie and other non-independent members are also played an important role in making
effective and strategic decision making.
CEO and Chairperson report
Armstrong et al. (2015) opined that there is a sharp distinction between the CEO and
Chairperson of an organisation on the basis of their job differences and activities. The role of the
CEO is to take all the necessary measures and all the executives are answerable to him. On the
other hand, the Chairperson is the head of the Board of Directors that is elected by the
shareholders. The Chairperson is generally enjoys substantial power in setting the agenda of the
board and determining the outcomes (De Haan&Vlahu, 2016). In case of SCA also the power
equation between the CEO and the Chairperson is based on a healthy relation where the
Chairmen is responsible to advice the CEO and the executives but the ultimate decision is made
by the CEO.

6CORPORATE GOVERNANCE AND ETHICS
The chairman’s report on the annual progress of SCA puts emphasis on the profit and
weaknesses for the business orientation of the organisation. There are some major development
in the annual revenue with an increase of 5% from the prior year. Moreover, the impairment
charges are also increased that proves SCA is in a great shape in compare to the previous year.
However, there are some issues in the regional broadcasting system that have to be mitigated in
course of time and the board starts looking for opportunity to resolve all the issues in the
financial year of 2018. On the other hand, the CEO report identifies that there are some
substantial changes made through the past three years in the course of strategic, financial,
operational and organisational spectrum. Those changes are embedded into the competitive
advantage of the organisation in references to the achievement in the entertainment market. The
CEO report explained a number of focal points in the name of optimising audio assets,
improving the experience of the audience, putting emphasis on the alternative market in terms of
the non-audio entertainment and so on.
Remuneration report
The remuneration report of the organisation is based on a gender analysis and applied
broadly to all levels in order to ensure a fair remuneration practice (Cuomo, Mallin&Zattoni,
2016). In this regard, the use of the Mercer International Position Evaluation (IPE) is an effective
tool to analyse the roles of the management and compare it with the remuneration of individuals
in similar rated roles in business. Based on the evaluation a total of 295 roles are identified
ranging from class 67, which is allocated for the CEO, to position class 41 assigned for the
apprentice (Southerncrossaustereo.com.au, 2018). Therefore, it can be seen that no such gender
biasness erects during the remuneration measurement because it is particularly focuses on the
skills and experience of individual employees.

7CORPORATE GOVERNANCE AND ETHICS
Company plans
It is important to identify the board members who are entitled to procure an effective
measure for the decision making within the organisation. In this context, the major focus of this
discussion will be circled around the independent and non-independent members and the
difference between the CEO and the Chair person. Moreover, the discussion also expands its
dimension by highlighting the remuneration report as an effective measure for the business
development of the organisation. The leadership team of Southern Cross Media Group Limited
portrays a clear identification of its key decision making personnel who are entitled to influence
the organisational management and illuminate the potential risk factors from within and outside
of the company.
Board orientation
Most powerful stakeholder
For identifying the most influential stakeholder in SCA, the annual report and the
financial statement of the organisation has played a pertinent role. Based on the assessment of
the financial statement and the organisational mission and vision, it can be identified that the
shareholders are considered to be the most important stakeholders in this company
(Matuleviciene & Stravinskiene, 2015). High revenue earning and putting emphasis on the
sustainable business growth the Board of Directors tries to make a fair business practice so that it
will attract the shareholders and investors to invest more. As per the Chairman’s note on the
progress report of Southern Cross Media Group Limited, it can be seen that there was a huge
concern about the effective business practice that the organisation is popular for with an
inclination towards innovation. The Chairman and the Board were aware of the fact that in the
financial year of 2017 there were some issues that the company in terms of the decline in Metro

8CORPORATE GOVERNANCE AND ETHICS
Radio in the first of the previous financial year. Therefore, it was obvious that it created an
impediment into the expected revenue generation for SCA. Based on this, the Board of Directors
were putting more emphasis on the shareholders engagement in the organisational practice and
ensure the income of the organisation sustainably. The remuneration report shows that there is a
steady growth in the remuneration and reward percentage of the employees and the executives.
For instance, the total remuneration in the year of 2017 was $1,118,438 whereas in 2018 it was
increased at $1,167,750 (Southerncrossaustereo.com.au, 2018). This was a measurement for the
non-executive directors. Moreover, for the non-independent members also the salary and the
reward also increased in the form of $6,982,055 in 2018 which was more than $1,000,000 from
the previous year. The proposed dividends are same as it was estimated in 2017 but the
organisation successfully earned way more profits than the previous year which proves the
effectiveness of its shareholder and investors engagement into the organisational context.
Character of the proposed theory
According to the research of Bellantuono, Pontrandolfo and Scozzi (2018)it can be
argued that the role of the agency theory is to procure a relationship between the agents and the
principles. In case of the Southern Cross Media Group Limited, the agents are identified as the
boards and the executive. On the other hand, the principles are associated with the prospect to
maximise the shareholders. The agents are entitled to represent the principal in a particular
business transactions and is expected to get benefits from the principles. One of the major facet
of the Agency theory is to bring healthy connection between the executives and the shareholders.
As a result of that both the interests of the organisation and the investors can be met. Moreover,
it is also associated with the practice of corporate governance because the organisation never
want to lose its potential investors by focusing on the unethical means of business practices.

9CORPORATE GOVERNANCE AND ETHICS
Therefore, it is always considered to be an important aspect for the organisation to put emphasis
on the fair and transparent business activities that envisages a benevolent and ethical image of
the organisation. Based on this, it can be stated that for doing business in Australia, following the
ASX principles can foster strategic advantage for the business organisations. In this context, the
agency theory can be implemented in course of finding out the important stakeholder in SCA. As
per the research of DithebeandAigbavboa (2018) nit can be argued that the role Agency theory is
to emphasis on the shareholders as the owner or the driving force of the organisation. On the
other hand, the board and executives are identified as the agents to meet the interests of the
shareholders. Moreover, the business orientation of the organisation is also fixed on its volume
of investment. Align the self-interests of the shareholders with the interests of the business
company will facilitate a competitive advantage for Southern Cross Media Group Limited to
encapsulate the market with more aggression and stable financial backup. It is obvious for the
investors to ensure high profitability from their investment and the organisations also intend to
expand their business effectively. Therefore, harnessing the interests of the organisation and
investors can usher a competitive advantage for the organisation in near future.
Personal focus
It can be stated that Southern Cross Media Group Limited is clearly turned its gaze on the
investors and shareholders. The report of both the chairman and the CEO articulated about a
grave concern for the relationship with the investors. It can be stated that it is imperative for any
organisation to attract the stakeholders with the help of effective organisational practice and
promising approach (Delgado-Márquez, Pedauga&Cordón-Pozo, 2017). The investors are
always in pursuit for better opportunities to get high profitability. Therefore, SCA also emphasis
on its investors for making a continuous and stable flow of capital that will help the organisation

10CORPORATE GOVERNANCE AND ETHICS
to expand its business and refurbish the existing innovative and skilled workforce. The
development in the organisational profitability can be identified as effective attraction and
incorporation of the investors within the organisational practice. The balance sheet, annual
report, income statement and the remuneration report reveal that high profitability for the
organisation is an effect of the successful incorporation of the investors (Balmer, 2017).
Moreover, Southern Cross Media Group Limited always puts stern focus on the quality of
services in terms of entertainment both in on-air broadcasting and through the radio stations. As
a result of that the shareholders and investors get attracted by the success of the organisation and
understand the high profitable and stable business practice of SCA that help them to pursue for
their own success (Southerncrossaustereo.com.au, 2018). Apart from that sharing the annual
report with profits and dividends is also an important aspect of the SCA to attract more investors
for securing the future business possibility for the organisation. It also enables the organisation to
support the concerns of the Board of Directors about ensuring security of the business of
Southern Cross Media Group Limited.
Company communication
Communication with the employees and the shareholders is considered to be an important
aspect for Southern Cross Media Group Limited to set sustainable business practice. The
legitimacy theory is highly relevant in this context that will create an effective discussion of the
relationship between the organisation and the investors and the employees. From the research of
HummelandSchlick (2016) it can be argued that there is a sharp connection between the
legitimacy theory and the corporate governance within the organisations. In this regard, it can be
stated that legitimacy is a general perception associated with the perception of delivering an
effective system based on norms, values, beliefs and definitions (Deegan, 2002). The report

11CORPORATE GOVERNANCE AND ETHICS
reflects a close affinity with the social and environmental disclosure policies. For supporting and
connecting the communities SCA expands its business in the regional level by coving the local
and regional events and news. In collaboration with Nine network, SCS tries to enhance local
news bulletins in Victoria, Sounthern New South Wales and Queensland.
Based on this understanding, Nurhayati et al., (2016) articulated that the role of the legitimacy
accountability reporting framework is to communicate with the shareholders and clarify the
importance of the relationship. It is a pertinent measure for the business corporates to facilitate
an eco-friendly measure and bring benevolent approaches to the society (Deegan, Rankin &
Tobin, 2002). The advent of globalisation creates the need for an effective measure for the
companies and currently it seems a competitive advantage for the companies to facilitate proper
steps to bring out good practice for the society and ushers proper planning to safeguard the
environment (Van Zijl, Wöstmann&Maroun, 2017). The environmental awareness of the
organisation follows the National Greenhouse and Energy Reporting Act and there is no notice
that SCA got in the financial year of 2018 for breaching the environmental factors.
In this regard, SCA aims to prepare a plan for improving the environment with
implementing best talent both on and off air. An organisational Culture Inventory (OCI) in 2016
was introduced in order to provide valuable information about the strengths of the organisation
and areas where there is a lack of effort for setting better organisational practice. Therefore,
recognising the biggest impact on culture Southern Cross Media Group Limited also intends to
shape its leadership with a two year program on leadership development capability in business
(southerncrossaustereo.com.au, 2019). Moreover, the values are also important to make both the
investors and the employees satisfied in the form of collaboration, initiative, creativity, courage
and integrity. SCA believes to enhance its performance by a diverse workforce where all the

12CORPORATE GOVERNANCE AND ETHICS
employees irrespective of their gender, class, ethnicity, religion or country can get equal
treatment with respect and fairness. Moreover, workplace health, safety and wellbeing are also
important for the Southern Cross Media Group Limited to set a unique value on the employees.
Henceforth, it can be argued that the high performance and proficiency of the employees lead
SCA to embolden its business practice effectively and efficiently.
Conclusion
The above discussion is trying to emphasis on the Southern Cross Media Group Limited
and its emphasis on the ethics and governance while doing business. In respect to this, it can be
stated that the practice of the organisation is divided into three distinct parts. The first part
discusses about the corporate governance where the role of the executives and the management
in facilitating an effective organisational practice is highlighted. The second part is focusing on
the board orientation towards business and the justifications are supported by the financial
statement and annual report of the organisation. Moreover, the third part is associated with the
practice of delivering an effective measure to satisfy the employees and the shareholders so that
no such disruption can be incurred to damage the healthy business environment and orientation
of the organisation. Based on this understanding, it can be concluded that the report rightly
justifies with the ethics and governance in Southern Cross Media Group Limited and put lights
on the relevant aspects of ethics and governance that SCA is effectively maintained.

13CORPORATE GOVERNANCE AND ETHICS
Reference
Armstrong, C. S., Blouin, J. L., Jagolinzer, A. D., &Larcker, D. F. (2015). Corporate
governance, incentives, and tax avoidance. Journal of Accounting and
Economics, 60(1), 1-17.
Balmer, J. M. (2017). The corporate identity, total corporate communications,
stakeholders’ attributed identities, identifications and behaviours
continuum. European Journal of Marketing, 51(9/10), 1472-1502.
Bellantuono, N., Pontrandolfo, P., &Scozzi, B. (2016). Capturing the stakeholders’ view
in sustainability reporting: a novel approach. Sustainability, 8(4), 379.
Cuomo, F., Mallin, C., &Zattoni, A. (2016). Corporate governance codes: A review and
research agenda. Corporate governance: an international review, 24(3), 222-241.
De Haan, J., &Vlahu, R. (2016). Corporate governance of banks: A survey. Journal of
Economic Surveys, 30(2), 228-277.
Deegan, C. (2002). Introduction: the legitimising effect of social and environmental
disclosures–a theoretical foundation. Accounting, Auditing & Accountability
Journal, 15(3), 282-311.
Deegan, C., Rankin, M., & Tobin, J. (2002). An examination of the corporate social and
environmental disclosures of BHP from 1983-1997: A test of legitimacy
theory. Accounting, Auditing & Accountability Journal, 15(3), 312-343.

14CORPORATE GOVERNANCE AND ETHICS
Delgado-Márquez, B. L., Pedauga, L. E., &Cordón-Pozo, E. (2017). Industries regulation
and firm environmental Disclosure: a stakeholders’ perspective on the importance
of legitimation and international activities. Organization & Environment, 30(2),
103-121.
Dithebe, K., &Aigbavboa, C. (2018). A Theoretical Review on the Importance of
Stakeholders and Sources of Financing Public Urban Infrastructure.
In Proceedings of the World Congress on Engineering (Vol. 1).
Hummel, K., &Schlick, C. (2016). The relationship between sustainability performance
and sustainability disclosure–Reconciling voluntary disclosure theory and
legitimacy theory. Journal of Accounting and Public Policy, 35(5), 455-476.
Matuleviciene, M., &Stravinskiene, J. (2015). The importance of stakeholders for
corporate reputation. Engineering Economics, 26(1), 75-83.
McCahery, J. A., Sautner, Z., & Starks, L. T. (2016). Behind the scenes: The corporate
governance preferences of institutional investors. The Journal of Finance, 71(6),
2905-2932.
Nurhayati, R., Taylor, G., Rusmin, R., Tower, G., & Chatterjee, B. (2016). Factors
determining social and environmental reporting by Indian textile and apparel
firms: a test of legitimacy theory. Social Responsibility Journal, 12(1), 167-189.
southerncrossaustereo.com.au (2019). CORPORATE GOVERNANCE STATEMENT.
Southerncrossaustereo.com.au. Retrieved from:

15CORPORATE GOVERNANCE AND ETHICS
https://www.southerncrossaustereo.com.au/media/1302/corporate-governance-
statement-2018.pdf
Southerncrossaustereo.com.au. (2018). Annual Report. Retrieved from
https://www.southerncrossaustereo.com.au/media/1303/scx0005_sca_annual-
report-2018_200dpi_high.pdf
Van Zijl, W., Wöstmann, C., &Maroun, W. (2017). Strategy disclosures by listed financial
services companies: signalling theory, legitimacy theory and South African
integrated reporting practices. South African Journal of Business
Management, 48(3), 73-85.
Yermack, D. (2017). Corporate governance and blockchains. Review of Finance, 21(1), 7-
31.