This report discusses the concept of corporate governance and ethics through the case study of Vocus Group Limited. It analyzes the composition of its board, agency theory, and adherence to the legitimacy theory. It also explores how Vocus Group Limited fulfills social and environmental initiatives.
Contribute Materials
Your contribution can guide someone’s learning journey. Share your
documents today.
Running head: CORPORATE GOVERNANCE AND VOCUS GROUP LTD CORPORATE GOVERNANCE AND VOCUS GROUP LIMITED Name of the Student: Name of the University: Author’s Note:
Secure Best Marks with AI Grader
Need help grading? Try our AI Grader for instant feedback on your assignments.
1CORPORATE GOVERNANCE AND VOCUS GROUP LIMITED Executive Summary The concept of corporate governance and ethics are the major focus of this report and the report discusses these two concepts through the use of the case study of Vocus Group Limited. The report begins by highlighting the business activities and also the kind of services that it offers to its clients or customers. Next, a discussion of the composition of its Board had been undertaken and the agency theory had been used to analyse whether the construct of ethics is being followed within the Board or not. As a matter of fact, the researcher found that the working policies of the Board are completely based on the concept of ethics. The report concludes with a discussion of the manner in which Vocus Group Limited effectively fulfils the criteria of the Legitimacy Theory and thereby adequately discloses the different social and environmental initiatives undertaken by it.
2CORPORATE GOVERNANCE AND VOCUS GROUP LIMITED Table of Contents Introduction................................................................................................................................3 Vocus Group Limited.................................................................................................................3 Summary of Corporate Governance at Vocus Groups Limited.................................................4 Board Orientation of Vocus Groups Limited.............................................................................6 Analysis of Vocus Group Limited’s communications through Legitimacy Theory..................8 Conclusion..................................................................................................................................9 References................................................................................................................................11
3CORPORATE GOVERNANCE AND VOCUS GROUP LIMITED Introduction According to Deegan (2002), the machinery of corporate governance is an important one since it helps the business enterprises to formulate the policies, regulations, measures and others which in turn would enable them to manage the various aspects of their business operations in an effective manner. Deegan, Rankin and Tobin (2002) have stated that the corporate governance framework followed by a business enterprise needs to be in conjunction or alignment with the stipulations or regulations or the business guidelines dictated by the national governments of the nations in which it is presently operational. In addition to these, it is seen that the corporate houses also take into account the interests of the different stakeholders, be it the internal stakeholders or the external stakeholders who are associated with the concerned corporate house for the formulation of the corporate governance policies or the framework itself (Milne & Patten, 2002). This finds evidence from the fact that the business actions or more precisely the corporate governance policies followed by the corporate houses directly or indirectly affect the stakeholders associated with the same depending on the level of their association with the concerned corporate house (Tricker & Tricker, 2015). The purpose of this report is to undertake an analysis of the corporate governanceframeworkfollowedbythecorporatehouseVocusGroupLimited.The researcher for the effective completion of this report had taken the help of the corporate governance report, annual report, sustainability report and also taken the help of different secondary sources of information from Google Scholar. The researcher had taken the help of the agency theory and the legitimacy theory for the completion of the report. The researcher had found that the Vocus Group Limited is largely ethical in its outlook.
Paraphrase This Document
Need a fresh take? Get an instant paraphrase of this document with our AI Paraphraser
4CORPORATE GOVERNANCE AND VOCUS GROUP LIMITED Vocus Group Limited Vocus Communications, presently called by the name of Vocus Group Limited, was founded by James Spenceley in the year 2008 and is an international telecommunication service provider headquartered in Sydney, Australia (Vocus.com.au, 2019). The concerned corporate house is famous for the wholesale as well as the retail telecommunication services to the corporate houses and the individual clients in the nations of Australia, New Zealand and others (Vocus.com.au, 2019). Furthermore, it had been seen that the telecommunication services like Dark Fibre, IP WAN, internet, Unified Communications and Telephony, Cloud Services and others offered by the corporate house under discussion here had been greatly appreciated by its clients over the years (Vocus.com.au, 2019). In addition to these, it is seen that the concerned corporate house has more than 18 different Data Centres in the nations of Australia and New Zealand and caters to the demands of more than 471,000 subscribers from these two nations itself (Vocus.com.au, 2019). The success as well as the popularity of the telecommunication services offered by the corporate house under discussion here becomes apparent from the fact that the annual profitability registered by it for the year 2018 was more than AU$129.25 million (Vocus.com.au, 2019). Summary of Corporate Governance at Vocus Groups Limited García-Sánchez,Rodríguez-DomínguezandFrías-Aceituno(2015)areofthe viewpoint that an important feature of the Board of the different corporate houses is the fact that they consist of directors who are independent and non-independent directors depending on the level of interests that have in the concerned corporate house. As opined by Schneider and Scherer (2015), the independent directors are the ones who have minimum amount of interest in the affairs of the corporate house with which they are associated and as a matter of fact do not share any kind of materialistic relationship with the corporate house. More importantly, it is seen that they are not being offered fixed remuneration or wages and they
5CORPORATE GOVERNANCE AND VOCUS GROUP LIMITED are being remuneration on the basis of the each of the Board meetings that they attend (Du Plessis, Hargovan & Harris, 2018). In contrast to this, the non-independent directors are the ones who share a high level of interest in the affairs of the corporate house with which they are associated with and as a matter of fact share materialistic or monetary relationship with the concerned corporate house (Rodriguez-Fernandez, 2016). The resultant effect of this is that they are being given fixed salaries or remunerations by the corporate house and they even get a share from the overall financial returns earned by the corporate house (Dion, 2017). In the Board of Vocus Groups Limited, it is seen that there are three members who decide the majority of the affairs of the concerned corporate house or for that make the majority of the decisions. In this regard, it needs to be said that Robert Mansfield performs the role of the Chairman of the concerned corporate house whereas the role of the CFO is being jointly performed by Kevin Russell and Mark Wratten (Vocus.com.au, 2019). An important feature of the Board of Vocus Groups Limited is the fact that all three above- mentioned members of the Board of the concerned corporate house belong to the category of non-independent directors and are thereby being fixed remuneration by the corporate house. However, at the same time it needs to be said that the remunerations are being offered to them by the Remuneration Committee of the concerned corporate house in conjunction with its other Committees like the Appointment committee, Conflict Resolution Committee and others so as to maintain transparency and fairness (Vocus.com.au, 2019). In addition to these, it is seen that the unlike the other corporate houses wherein the Chairman is entrusted with the work of the publication of the general reports whereas the CEOs are entrusted with the work of the publication of the sustainability reports, annual reports, corporate governance reports and others within Vocus Groups Limited it is seen that these reports are being published by the Chairman of the corporate house himself. On the other hand, it is seen that
6CORPORATE GOVERNANCE AND VOCUS GROUP LIMITED the two CFOs of the corporate house under discussion here are being entrusted with the work of the publication of the financial report of the concerned corporate house. Board Orientation ofVocus Groups Limited Jain and Jamali (2016) have noted that an analysis of the manner in which decisions are being made within the Board of a corporate house or for that matter the kind of treatment which is being meted out to the different members of the Board greatly determines whether the concerned corporate house has an ethical outlook or not or whether ethics is an integral part of its framework or not. The construct of agency theory is an important one in this regard since by enabling the individuals to understand the kind of relationship which exists between the agents and the principals it in a succinct manner reveals the outlook of the corporate house, whether it is ethical or not (Tricker & Tricker, 2015). Soltani and Maupetit (2015) are of the viewpoint that the agency theory categorises the stakeholders as well the principals or the recipients of the financial benefits on the score of the decisions made by the agents of the corporate house and the agents are the executives of the corporate house on whose decisions the financial benefits derived by the principals greatly depends on. The resultant effect of this is that because of the financial benefits which are being offered by the decisions made by the agents, the principals are not often consulted during the decision-making process which in turn helps the formulation of the different strategies, measures and others followed (Davies, 2016). This is completely unethical because of the fact that the stakeholders or the principals associated with a particular corporate house are being influenced by the decisions made by the agents of the corporate houses either directly or indirectly on the basis of the level of interest that they share with the corporate house (Boatright, 2017). Vocus Groups Limited has three members in its Board and all three of them are non- independent directors and thereby as per the agency theory exercise an equal amount of influence in the decision-making process which is being used for the purpose of making
Secure Best Marks with AI Grader
Need help grading? Try our AI Grader for instant feedback on your assignments.
7CORPORATE GOVERNANCE AND VOCUS GROUP LIMITED important decisions related to the corporate house. As a matter of fact, it is seen that during the decision-making the opinion or the perspective of each of the three members are being taken into account and in cases of disputes or the scenarios wherein mediation is needed the Conflict Resolution Committee of the Board intervenes for the resolution of the deadlock (Vocus.com.au, 2019). Furthermore, it is seen that the Conflict Resolution Committee of the Board for the purpose of reaching a decision listens to the arguments of all the three members and thereby takes the kind of decision which is beneficial from the perspective of the corporate house and also takes into account the opinions of all the three members. The resultant effect of this is that no major bias exists between the different members of the Board and thereby each one of them are being able to exercise the power that had been vested in them in an equal manner. More importantly, since each of the members of the Board are being able to exercise their rights or privileges in adequate manner it is seen that each of them are completely aware of the policies, vision, mission, business strategies and other aspects of the concerned corporate house in an adequate manner and this in turn enables them to make the kind of decisions which suits the needs or the requirements of the corporate house in the best possible manner. The process which is being followed by the corporate house under discussion here, namely, Vocus Groups Limited, is a highly ethical as well as a fair one. In this regard, it needs to be said that the Appointment Committee of the concerned corporate house is entrusted with the work of appointment of new members to the Board on the retirement or the demise of the existing members (Vocus.com.au, 2019). As a matter of fact, it is seen that the majority of the members of the higher management team are being given fair opportunity to get the concerned designation and the final appointment is being made by the Appointment Committee on the basis of the qualifications of the individuals, their past record, the contributions made by them towards the growth or the success attained by the corporate
8CORPORATE GOVERNANCE AND VOCUS GROUP LIMITED house, their leadership abilities and other aspects (Vocus.com.au, 2019). In addition to these, it is seen that the remunerations of the individuals who have been promoted to the Board or for that matter of the ones which are already a part of the Board is being done by the Remuneration Committee on the basis of their performance and also the contribution that they have made towards the enterprise (Vocus.com.au, 2019). In the light of these aspects, it can be said that a high level of ethics is being followed within the corporate house, Vocus Groups Limited, regarding the important decisions and also policies related to its Board which in turn had enabled the corporate house to develop an ethical outlook in the best possible manner. More importantly, this ethical outlook of the corporate house under discussion here becomes apparent from the business activitiesor the corporate social responsibility (CSR) activities followed by it as well. Analysis of Vocus Group Limited’s communications through Legitimacy Theory Simas, Slater and Miller (2018) have articulated the viewpoint that the corporate houses have a social responsibility to contribute in the best possible manner towards the improvement of the society as well as the environment in which they are conducting their business activities. As discussed by Müller et al. (2016), the mechanism of legitimacy theory supports the corporate houses to effectively disclose the environmental or the social activities that they are performing to adequately fulfil their responsibility towards the society or the environment. The corporate house, Vocus Groups Limited, is trying to improving the condition of the environment by effectively reducing the amount of harmful pollutants released by it in the environment on the score of its business activities. As a matter of fact, it is seen that the sustainability report of the concerned corporate house declares that “We achieved a reduction in customer invoice printing of 0.2%” in a bid to support that claim that the corporate house makes towards effectively contributing to reduce the environmental damage caused by it (Vocus.com.au, 2019). In addition to this, the sustainability report of the
9CORPORATE GOVERNANCE AND VOCUS GROUP LIMITED corporate house under discussion here also discloses the fact that in the year 2018 itself it had taken various initiatives like switching over to renewable energy sources, that is, solar energy so as to reduce the amount of energy consumed by it and thereby contribute in a meaningful manner towards the improvement of the condition of the environment (Vocus.com.au, 2019). Vocus Group Limited had also taken various initiatives for the improvement of the social condition of the nations of Australia and New Zealand. For example, an in 148% in the hours that the different members of the concerned corporate house spent last year for different kinds of charities or community services (Vocus.com.au, 2019). More importantly, different kinds of initiatives were also being taken towards the enhancement of the diversity or more particularly to attain gender equality within the spectrum of its enterprise. As a matter of fact, the sustainability report of the corporate house itself states “a number of appointments after 30 June improve this balance and reflect on the commitment of the new managementteam to diversity” (Vocus.com.au, 2019). In addition to these, it was seen that different kinds of leadership training programs were also organised especially for the women employees of the corporate house so as to not only empower them but also to help them in the acquire the kind of skills which in turn would enable them to lead the corporate house in the future (Vocus.com.au, 2019). Furthermore, the corporate house under discussion is also trying to take the help of the framework of the green supply chain management so as to effectively reduce the pressure that it is putting on the environment because of its business activities. In the light of these aspects, it can be said that the corporate house, Vocus Group Limited effectively fulfils its responsibilities as a business organisation and also fulfils the criteria of the legitimacy theory. Conclusion To sum up, the corporate house Vocus Group Limited over the years had managed to design an effective corporate governance that had not only enabled the concerned corporate
Paraphrase This Document
Need a fresh take? Get an instant paraphrase of this document with our AI Paraphraser
10CORPORATE GOVERNANCE AND VOCUS GROUP LIMITED house to manage its diverse aspects in an adequate manner but at the same time it follows the concept of ethics as well. In this regard, mention needs to be made of the fact that the different decisions within the Board of the corporate house are being made in a unanimous manner and also each of the three members of the concerned Board have adequate amount of power as well as privileges as per the designation that they hold. Furthermore, it is also seen that the corporate house under discussion also effectively fulfils the criteria of the legitimacy theory and thereby discloses the activities that it is presently performing as part of its responsibility as a corporate house.
11CORPORATE GOVERNANCE AND VOCUS GROUP LIMITED References Boatright,J.R.(2017).Ethicsandcorporategovernance:Justifyingtheroleof shareholder.The Blackwell Guide to Business Ethics, 38-60. Davies,A.(2016).Bestpracticeincorporategovernance:Buildingreputationand sustainable success. Routledge. Deegan,C.(2002).Introduction:thelegitimisingeffectofsocialandenvironmental disclosures–atheoreticalfoundation.Accounting,Auditing&Accountability Journal,15(3), 282-311. Deegan, C., Rankin, M., & Tobin, J. (2002). An examination of the corporate social and environmentaldisclosuresofBHPfrom1983-1997:Atestoflegitimacy theory.Accounting, Auditing & Accountability Journal,15(3), 312-343. Dion, M. (2017). Corporate citizenship as an ethic of care: corporate values, codes of ethics andglobalgovernance.InPerspectivesoncorporatecitizenship(pp.118-138). Routledge. Du Plessis, J. J., Hargovan, A., & Harris, J. (2018).Principles of contemporary corporate governance. Cambridge University Press. García-Sánchez, I. M., Rodríguez-Domínguez, L., & Frías-Aceituno, J. V. (2015). Board of directors and ethics codes in different corporate governance systems.Journal of Business Ethics,131(3), 681-698. Jain, T., & Jamali, D. (2016). Looking inside the black box: The effect of corporate governanceoncorporatesocialresponsibility.CorporateGovernance:An International Review,24(3), 253-273.
12CORPORATE GOVERNANCE AND VOCUS GROUP LIMITED Milne, M. J., & Patten, D. M. (2002). Securing organizational legitimacy: an experimental decisioncaseexaminingtheimpactofenvironmentaldisclosures.Accounting, Auditing & Accountability Journal,15(3), 372-405. Mitchell, L. E. (2017).Corporate Governance: Values, Ethics and Leadership. Gower. Müller, R., Turner, J. R., Andersen, E. S., Shao, J., & Kvalnes, Ø. (2016). Governance and ethicsintemporaryorganizations:themediatingroleofcorporate governance.Project Management Journal,47(6), 7-23. Rodriguez-Fernandez, M. (2016). Social responsibility and financial performance: The role of good corporate governance.BRQ Business Research Quarterly,19(2), 137-151. Schneider, A., & Scherer, A. G. (2015). Corporate governance in a risk society.Journal of Business Ethics,126(2), 309-323. Simas, C. A., Slater,D. J., & Miller,K. (2018). Individualismand corporatesocial responsibilityreporting.InternationalJournalofBusinessGovernanceand Ethics,13(2), 107-120. Soltani, B., & Maupetit, C. (2015). Importance of core values of ethics, integrity and accountability in the European corporate governance codes.Journal of Management & Governance,19(2), 259-284. Tricker, R. B., & Tricker, R. I. (2015).Corporate governance: Principles, policies, and practices. Oxford University Press, USA. Vocus.com.au,(2019).VocusCommunications·Forward-thinkingsolutionsforyour Network. Retrieved from https://www.vocus.com.au/