Impact of Corporate Governance on Financial Performance of Australian Retail Companies

This research aims at the analysis of the effects of corporate governance on the financial performance of the Australian retail companies. For this reason, three companies will be considered; they are Wesfarmers Limited, Woolworths Limited and JB Hi-Fi. The research will involve in qualitative analysis in the presence of secondary analysis.

Running head: APPLIED BUSINESS RESEARCH
Impact of Corporate Governance on Financial Performance of Australian Retail Companies
Name of the Student
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1APPLIED BUSINESS RESEARCH
Executive Summary
This research aims at the analysis of the effects of corporate governance on the financial
performance of the Australian retail companies. For this reason, three companies will be
considered; they are Wesfarmers Limited, Woolworths Limited and JB Hi-Fi. The research will
involve in qualitative analysis in the presence of secondary analysis.

2APPLIED BUSINESS RESEARCH
Table of Contents
Propose Research Title....................................................................................................................3
Introduction......................................................................................................................................3
Research Problem............................................................................................................................3
Research Objectives.........................................................................................................................3
Research Questions..........................................................................................................................3
Literature Review............................................................................................................................3
Data Collection Plan........................................................................................................................4
Ethical Considerations.....................................................................................................................4
Conclusion.......................................................................................................................................5

3APPLIED BUSINESS RESEARCH
Propose Research Title
Impact of Corporate Governance on Financial Performance of Australian Retail
Companies
Introduction
The business world has put their attention towards the implementation of effective
corporate governance mechanism after some major corporate scandals like Enron, ABC Learning
and others. Corporate governance is regarded as a mechanism that directs the companies and
helps in establishing effective control. The main objective of corporate governance is the
protection of the interests of all the stakeholders. It implies towards the role of corporate
governance on ensuring effective financial performance of the companies (Tricker and Tricker
2015).
Research Problem
There have been many researches conducted on the banking industry along with other
service industry, thereby ignoring the sectors like retain, telecommunication and others that are
still prone to the issues of corporate governance. In Australia, many large companies can be seen
operating in the retail sector. For this reason, this study takes an attempt to evaluate the impact of
corporate governance on the retail industry in Australia.
Research Objectives
The main objective of this study is to make investigation on the fact that how the
corporate governance mechanism affects the financial performance of the retail companies in
Australia. At the same time, another major objective of this research is to investigate the relation
of the financial performance of the firms with different aspects like structure of the board,
effectiveness, size and other relevant factors.
Research Questions
The major research questions of this study are shown below:
1. How does corporate governance affect the financial performance of Wesfarmers,
Woolworths and JB Hi-Fi?
2. Is there any positive relationship between corporate governance and the financial
performance of these companies?
3. Is there any positive relationship between the Board’s ownership and the financial
performance of these business organizations?
4. Is there any positive relation between the Board’s size and structure with the financial
performance of these companies of Australian retail sector?

4APPLIED BUSINESS RESEARCH
Literature Review
The world of business has witnesses collapse of many big business corporations in the
past and there were many scandals that contributed towards these corporate failures. One major
fact has come to the light from the investigation that the core reasons for the failure of these
companies was the lack of effective corporate governance mechanism (Fanta, Kemal and Waka
2013). These incidents have major negative impact on the world economy and they have started
to adopt the defensive measure that is the implementation of effective corporate governance
mechanisms. Corporate governance plays a crucial part in the reduction of these risks related to
the shareholders. This aspect can be considered as a major motivation on this study that is to
establish connection between corporate governance and the financial performance of the
companies (Obradovich and Gill 2013).
The presence of effective corporate governance ensures that the shareholders get their
return on the investment. The implementation of effective corporate governance mechanisms
determines various aspects of agency that helps the shareholders in motivating the managers so
that they can gain the required return on investment. For example, the payment of extra bonus or
different facilities for safeguarding the investments (Amba 2014). From many past studies, it can
be seen that good corporate governance helps the companies in maintain good financial
performance whether in developed countries or underdeveloped countries. At the time to discuss
about the impact of corporate governance on financial performance, it needs to be mentioned that
effective corporate governance mechanism involves in setting corporate rules and regulations
that lead to improved financial performance of the companies (El-Chaarani 2014).
At the same time, it can be seen that the board mechanism also has major impact on the
financial performance of the companies. According to some of the studies, it has also be seen
that weak corporate governance contributed towards worse financial performance of the
companies (Khan, Muttakin and Siddiqui 2013). Thus for the management of the companies, for
ensuring the desired financial performance of their businesses, it is needed for them to ensure the
correct implementation of corporate governance mechanism within the organization. In this
context, it needs to be mentioned that there are different variables based on which the
effectiveness of corporate governance can be measured; such as ownership of the board, board’s
effectiveness, size of the board, size of the board and many others. Thus, basis on the above
discussion, it can be said that there is a positive connection between corporate governance and
financial performance of the companies (Claessens and Yurtoglu 2013).
Data Collection Plan
Data collection plan is a crucial aspect in the progress of the research program. In this
particular research, the researcher will involve in the qualitative analysis; and for this reason, the
researcher will collect secondary data from different authentic sources (Ezzy 2013). After that,
the researcher will conduct a thematic analysis based on the collected secondary data. In this
analysis, the researcher will consider each research question as a theme so that research can be
conducted on them. The major sources of secondary data are company websites, previously done
research papers on the same topic, peer review journal article on the same topic and others.

5APPLIED BUSINESS RESEARCH
Ethical Considerations
In this context, it needs to be mentioned that the researcher will adhere to all the required
ethical rules and regulations at the time to conduct the research. The researcher will collect all
the required data from authentic sources like company website, peer reviewed journals and
others. At the same time, the research will not do nay manipulation with the research process for
getting favorable research outcomes.
Conclusion
From the above discussion, it can be seen that the main aim of the research is the
investigation of the relation between corporate governance and the financial performance of the
firms in Australian retail industry. For this reason, the qualitative research analysis will be taken
into consideration after the collection of secondary data from various authentic sources. The
researcher will conduct a thematic analysis to get the results of the research. At the time of
conducting the research, the researcher will comply with all the ethical requirements.

6APPLIED BUSINESS RESEARCH
References
Amba, S.M., 2014. Corporate governance and firms’ financial performance. Journal of
Academic and Business Ethics, 8(1).
Claessens, S. and Yurtoglu, B.B., 2013. Corporate governance in emerging markets: A
survey. Emerging markets review, 15, pp.1-33.
El-Chaarani, H., 2014. The impact of corporate governance on the performance of Lebanese
banks.
Ezzy, D., 2013. Qualitative analysis. Routledge.
Fanta, A.B., Kemal, K.S. and Waka, Y.K., 2013. Corporate governance and impact on bank
performance. Journal of Finance and Accounting, 1(1), pp.19-26.
Khan, A., Muttakin, M.B. and Siddiqui, J., 2013. Corporate governance and corporate social
responsibility disclosures: Evidence from an emerging economy. Journal of business
ethics, 114(2), pp.207-223.
Obradovich, J. and Gill, A., 2013. The impact of corporate governance and financial leverage on
the value of American firms.
Tricker, R.B. and Tricker, R.I., 2015. Corporate governance: Principles, policies, and practices.
Oxford University Press, USA.