Corporate Governance and Ethics

The purpose of the report is to aim at the aspects of Corporate Governance. The intention of the report is to ensure that the Council members are aware of the academic research related to the aspects of corporate governance. This report highlights the aspects of theory used on corporate governance that involves the board of directors and management and the stakeholders. Thereafter it emphasizes on the external factors of corporate governance in the world of business. Lastly, the report concludes stating that the members of the Council should be informed about the aspects of corporate governance.

Running head: CORPORATE GOVERNANCE AND ETHICS
Corporate Governance and Ethics
Name of the Student
Name of the University
Author note

1CORPORATE GOVERNANCE AND ETHICS
Executive Summary
The purpose of the report is to aim at the aspects of Corporate Governance. The intention of
the report is to ensure that the Council members are aware of the academic research related to
the aspects of corporate governance. This report highlights the aspects of theory used on
corporate governance that involves the board of directors and management and the
stakeholders. Thereafter it emphasizes on the external factors of corporate governance in the
world of business. Lastly, the report concludes stating that the members of the Council should
be informed about the aspects of corporate governance.

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Table of Contents
Introduction................................................................................................................................3
Purpose.......................................................................................................................................3
Discussion..................................................................................................................................4
 The relevance of the Corporate Governance aspects......................................................4
 Admission of the fact from where recommendation is followed....................................5
 Powers and authority of the shareholders in the management of corporate governance 5
 Disclosures of Corporate Governance............................................................................5
 Sources of Corporate Governance..................................................................................6
 Issue faced by the Australia Securities Exchange (ASX)...............................................6
 Transparency and Disclosure..........................................................................................7
..............................................................................................................................................7
 Duties of corporate governance......................................................................................7
 Engagement of employees in corporate governance.......................................................8
 Disclosure related to Corporate Governance..................................................................8
Conclusion..................................................................................................................................9
References................................................................................................................................10

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Introduction
Corporate Governance refers to a system or set of rules, processes and practices with
the help of which a company is directed and controlled. Stakeholders play an essential role in
the process of corporate governance. They are the key performers of the company. The basic
goals of these organizations are to have such a framework that has effective governance that
consists of the needs and circumstances of the individuals. A Board of a company helps in
reviewing the major reflection of corporate governance on the organization. However, in
Australia, Corporate Governance has developed over the years. The basic purpose of
corporate governance is to give protection to the companies and individuals who are engaged
with them. However, plenty of disputes and difficulties have been faced by the companies of
Australia while the development of corporate governance.
Purpose
The purpose and aim of corporate governance is to highlight the practices for the
undertakings that are a part of the ASX. The objective of this is that the Council can have a
view of it for accomplishing the results of governance. The expectations of the investors
should also be fulfilled. For the ability of the Council to recognize the various identities, it
should adopt the practices of the government (Lexisnexis.com 2018). This process will not
request lay down the corporate governance practices that a proper listed entity should adopt.
Thus, the practices of good corporate governance are required in Australia and they are
noteworthy in establishing the capital cost in a global market.

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Discussion
Corporate governance focuses on how it will have an effect on Council of Australian
Securities Exchange (Swan 2014). Recommendations and a few principles are generally used
in the process of corporate governance in a company. In the corporate sectors, the main issue
is ethics that is related to the activities of the corporations. The Board is measured and treated
to be as one of the listed entity in which a Council recommendation is not appropriate
according to the arrangements of the governance.
 The relevance of the Corporate Governance aspects
The listed entities of Australian Securities Exchange are applied with the
recommendations and principles in spite of the legal structure whether they are
established in Australia or any other country. Corporate governance has a few principles
that are carried out especially for the application in the entities of ASX (Young and Thyil
2014). These principles are structured in such a way that the company gets advantages in
some way or the other. The listed entities must determine and unveil the responsibilities
and role of the board and management. The purpose of this is to recognize and observe
the evaluation of the company’s performance (Larcker and Tayan 2015). The Board’s
composition and size must be suitable for discharging the duties. The entities that are
listed as a part of the ASX should be ethical nature. The rights of the security holders of
the listed companies must be revering and producing them with appropriate knowledge
and information (Corkery, Mikalsen and Allan 2017). Therefore, when a company of
Australia is applied with corporate governance, it must determine a sound risk
management framework and can assess the level of effectiveness.
 Admission of the fact from where recommendation is followed
The Council involved with the ASX should be aware of the information related to
the listed entities so that no kind of legalistic approach is applied in their disclosures. The
companies that are listed must follow all the recommendations and provide the
information regarding the policies and practices (Chan, Watson and Woodliff 2014).
These must follow the recommendations as compared to the policies that are generally
applied. The audit committee and the members should inform the Council regarding their
experience and qualification.

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 Powers and authority of the shareholders in the management of corporate
governance
In general, the shareholders of the listed entities of ASX have the authority to
appoint the Board members. They also have the power to approve the members based
on their qualification. While exercising the powers, the shareholders must make sure
that they are ethical in nature. The approvals basically need a majority number of
votes and approvals in the business of the company. The composition of the company
includes delegates and operations of the business (Beekes, Brown and Zhang 2015).
The size and composition of the business must be registered. Due to the
circumstances, there are reductions in the capital and also because of special
resolution. Therefore, the maximum number of votes is needed for that special
resolution of the company. The approval is needed for the companies, as it is a merit
regarding the parties. The funds that are related to the pension and other investors
attain significant positions in plenty of companies.
 Disclosures of Corporate Governance
The listed companies and the Council expects to take advantage of the
opportunity to aim on the annual report for publishing their corporate governance. If
the listed companies desire to include their statement of corporate governance in the
annual report, then the Council must be informed about the disclosures and the
statements of the corporations (Cunningham 2015). The corporate governance
statement of an entity, should provide relevant information that is easily accessible
and where the statement shows if the parties are interested can acquire that particular
copy of material (Sagepub.com 2018).
 Sources of Corporate Governance
The essential sources include Australian Securities and Investment
Commission and Corporation. This consists of the listing rules of ASX and the
constitutional law. The Council members should be informed about the sources. The
companies should be able to follow and administer the listing the existing rules of
ASX (Freeman 2015). The recommendations and the rules can be applied in the ASX
Corporate Governance Council. This approach consists of the customers as well as the
protection of the entities of company’s environment. Hence, the Council members
should be provided with proper assistance while dealing with the aspects of the
corporate governance.

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 Issue faced by the Australia Securities Exchange (ASX)
The Australian Securities Exchange has faced a few challenges when
corporate governance was forming the companies. There have been disclosure
requirements in the companies when the directors have gone through serious
challenges while executing the legal duties of the material disclosure (Lama and
Anderson 2015). Ethics plays n essential element as well while dealing with other
issues of the company. Such a situation includes the financial risk globally in the
subject matter of corporate governance (Safari 2017). In Australia, the regulators
have developed their aim and objective on the culture of the entities. It should focus
on how it can be related to the conduct of the management and the employees. The
Council members must be able to regulate the services financially since it is an
element of the corporate governance.
 Transparency and Disclosure
The Board of the companies is usually held to be responsible if there is no
proper disclosure or transparency. The duty of the Board is act accordingly with care
as it is also their legal responsibility. Along with such legal responsibilities, it also has
statutory duties approvals of reports and managing the transparency systems within
the company (Kent and Zunker 2017). An Australian organization should inform the
ASX about the information related to the material price. The objectives of the
governance ensures that the companies put formal mechanisms to make sure that
relevant information is noticed by the senior management.
 Duties of corporate governance
The Board of Management of a company has the responsibilities and duties to
take all the necessary decisions. The chief duty was to manage all the existing
practices and systems of the corporate governance of the companies. The duty of the
Board is to appoint the chief executive, remove them if required, appoint senior
executives and monitor their performance (Council 2014). The Board approves,
directs and considers the usual strategies and methods that are suggested by the
management for implementation. It is also important for the Board to approve the
capital expenditure and monitoring the budgets. The duty and responsibility of the
Board is to review the framework of the risk management and systems of the
company (Shimeld, Williams and Shimeld 2017).

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 Engagement of employees in corporate governance
Employees are considered as the officer of a company who are not involved
with the responsibilities of corporate governance. However, the responsibilities of the
employees requires the compliance with the systems and policies of the corporate
governance of the company (Xu, How and Verhoeven 2017). As per the common law,
no employee is required to disclose any kind of misconduct occurring. It is the duty of
the Council members to have check on the actions of the existing employees in a
company. The employees while carrying out their duties should fill the requirements.
There are protections that are designed in such a way so that the people in the
organization get attentive to ASIC and other authorities for illegal behavior.
 Disclosure related to Corporate Governance
The members of ASX should receive the prepared reports and data of the
company. Such reports include the daily review of the actions and activities of the
company for a year. The activities of the company consist of dividends and shares of
the company (Klettner, Clarke and Boersma 2014). They must thereafter engage
themselves with the security holders. However, proper and appropriate facilities and
information should be provided for letting them to execute the duties as security
holders. In case of smaller entities, association of the security holders at the AGM
increases according to the requests. On the other hand, in case of larger entities,
detailed program with private and institutional investors and the financial media
interact. The annual and financial reports should be disclosed to the Board.
Therefore, the chief aim of an investor is to allow the investors and other participants
for gaining a better comprehension of the company.
Conclusion
It can be concluded stating that the Chair of the Australian Securities Exchange,
Corporate Governance Council should inform the members of the Council regarding the
actions of the companies. As per the Corporations Act, the key management prohibits the
personnel of an ASX listed company of Australia. The purpose of this is to not to permit them
from entering an establishment which would affect the exposure related to risk. The risk also
includes the remuneration that has been vested. Therefore, a listed company that has a

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remuneration scheme establishes a policy as to how the participants can take a part in such
sort of transactions.

9CORPORATE GOVERNANCE AND ETHICS
References
Beekes, W., Brown, P. and Zhang, Q., 2015. Corporate governance and the informativeness
of disclosures in Australia: A re‐examination. Accounting & Finance, 55(4), pp.931-963.
Chan, M.C., Watson, J. and Woodliff, D., 2014. Corporate governance quality and CSR
disclosures. Journal of Business Ethics, 125(1), pp.59-73.
Corkery, J., Mikalsen, M. and Allan, K., 2017. Corporate social responsibility: The good
corporation. Centre for Commercial Law.
Council, A.C.G., 2014. Corporate governance principles and recommendations.
Cunningham, M., 2015. ASX update: The emerging tech bourse. Company Director, 31(5),
p.12.
Freeman, G., 2015. Investment: Platform alternative raises interest. Professional Planner,
(74), p.22.
Kent, P. and Zunker, T., 2017. A stakeholder analysis of employee disclosures in annual
reports. Accounting & Finance, 57(2), pp.533-563.
Klettner, A., Clarke, T. and Boersma, M., 2014. The governance of corporate sustainability:
Empirical insights into the development, leadership and implementation of responsible
business strategy. Journal of Business Ethics, 122(1), pp.145-165.
Lama, T. and Anderson, W.W., 2015. Company characteristics and compliance with ASX
corporate governance principles. Pacific Accounting Review, 27(3), pp.373-392.
Larcker, D. and Tayan, B., 2015. Corporate governance matters: A closer look at
organizational choices and their consequences. Pearson Education.
Lexisnexis.com 2018, Source: http://www.lexisnexis.com.au/ [online], Retrieved on May 3,
2018
Sagepub.com 2018 Comparative Political Studies (CPS), Source: http://cps.sagepub.com/,
[online] Retrieved on May 3, 2018.

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Shimeld, S., Williams, B. and Shimeld, J., 2017. Diversity ASX corporate governance
recommendations: a step towards change?. Sustainability Accounting, Management and
Policy Journal, 8(3), pp.335-357.
Swan, P., 2014. The ASX Governance Council and “independent” boards. Law and Financial
Markets Review, 8(3), pp.196-198.
Xu, S., How, J. and Verhoeven, P., 2017. Corporate governance and private placement
issuance in Australia. Accounting & Finance, 57(3), pp.907-933.
Young, S. and Thyil, V., 2014. Corporate social responsibility and corporate governance:
Role of context in international settings. Journal of Business Ethics, 122(1), pp.1-24.