Corporate Governance in Accounting

Running head: CORPORATE GOVERNANCE IN ACCOUNTING
CORPORATE GOVERNANCE IN ACCOUNTING
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Author Note

1CORPORATE GOVERNANCE IN ACCOUNTING
Table of Contents
Part A. Case Study.....................................................................................................................2
Introduction................................................................................................................................2
Discussion..................................................................................................................................2
Corporate Governance...........................................................................................................2
Corporate Governance Indicators..........................................................................................2
Comparison............................................................................................................................4
Conclusion..................................................................................................................................4

2CORPORATE GOVERNANCE IN ACCOUNTING
Part A. Case Study
Introduction
This part of the paper is paper is prepared to analyse the corporate governance
strategies, policies and practices of the chosen companies named Woolworths Ltd. and the
Wesfarmers Ltd. This paper uses the annual report of both the companies to analyse the
corporate governance information of each company. This part of the paper also consider the
various corporate governance indicators of both the companies. Lastly, this report compare
the corporate governance indicators of both the firm to discuss the effectiveness, strength and
adequacy of corporate governance adopted by both firms.
Discussion
Corporate Governance
The annual report of Woolworths Limited for the year 2018 disclose that the
Woolworths Group follows the each recommendation of the ASX Corporate Governance
Council’s Corporate Governance Principles and the recommendations. Mainly the firm
follows the principles, policies and recommendations of the ASX Corporate Governance and
according make their strategies and practices their strategies.
While, the corporate governance policy of the Wesfarmers Ltd states that the
company fulfils the obligation and responsibilities in the best interests of the company and its
stakeholders. Same like the Woolworths Limited, Wesfarmers also follows all the principles
and recommendations of the ASX Corporate Governance Council.
Corporate Governance Indicators
a) Total Number of director: - The Wesfarmers Ltd have 10 directors in its
board in total. While, the Woolworths Ltd. have total 8 directors in its board.

3CORPORATE GOVERNANCE IN ACCOUNTING
b) Non- Executive director: - The Woolworths have 7 director as non-
executive director hence, the percentage of the non- executive director is 87.5
%. On other hand, the Wesfarmers have 9 non- executive directors hence, the
percentage of non- executive directors is 90%.
c) Independent Directors: - The Woolworth have 6 independent directors, the
percentage of the independent directors is 75 %. Other side, the annual report
of Wesfarmers of 2018 does not have any information of independent
directors.
d) Chairman’s detail: - The chairman of Woolworth Ltd is Gordon Cairns. The
statement of the chairman in the annual report of 2018 shows that the
chairman of the company is mainly focused in innovation, community and
shareholder values. The chairman stated that the last year the company was
focused in the strategy, culture and capital management and made good
progress and this year company is looking forward to increase its efficiency in
innovation, community and the shareholder value (Woolworthsgroup 2019).
While, the Michael Chaney AO, the chairman of Wesfarmers ltd,
stated in their massage for the annual report of 2018, that in this year company
took the some difficult but important decision regarding the long term
shareholders return. In overall, the chairman discussed about the some major
changes made by the firm and details of their performance in the year 2015
(Wesfarmers 2019).
e) Share hold by executive directors: - The executive directors of Wesfarmers
Ltd. holds the total number of 607,171 share at the end of the financial year
2018. The executive directors of the Woolworths Ltd. holds the 942,147 share
of the company.