Corporate Governance of Webjet Limited

CORPORATE GOVERNANCE OF WEBJET LIMITED
Table of Contents
EXECUTIVE SUMMARY.............................................................................................................2
INTRODUCTION...........................................................................................................................2
Webjet Limited Corporate Governance...........................................................................................3
WebJet Limited Board Composition...........................................................................................3
Chairman and Chief Executive Officer Message........................................................................4
Webjet Limited Remuneration Policy.........................................................................................4
Board Orientation............................................................................................................................5
a. Accounting Theory...................................................................................................................5
b. Stakeholder Theory..................................................................................................................5
Orientation Board Focus..................................................................................................................6
a. Shareholders.........................................................................................................................6
i. Market disclosure and communications with shareholders..............................................6
ii. Disclosure of shareholding................................................................................................6
iii. Hedging of Webjet shares and options..........................................................................6
iv. Key Personnel Management Transactions........................................................................6
v. Economic, business and social sustainability risks...........................................................7
vi. Environmental & sustainability risks................................................................................7
Webjet Communications Using Legitimacy Theory.......................................................................8
Conclusion.......................................................................................................................................9

EXECUTIVE SUMMARY
Sound corporate governance is a necessity for efficient management of organizations in a
cutting-edge business environment. Webjet limited, the case study company is one of the
fundamental investors in the provision of online travel booking. This study exploits the
numerous corporate governance systems that Webjet Limited has exploited to remain aggressive
within travel agency industry. Moreover, the company board of directors and the management
teams’ reports show the corporation dedication to company disclosures. Corporate disclosures
purposes to enhance the shareholders and stakeholder’s interest within the company through
communication by the company financial reports. This paper will also deal with the numerous
theories aimed at supporting the need for corporate disclosers in both financial and non-financial
elements. The theories in accounting discussed as critical tenets for company disclosures include
the stakeholder concept, agency principle, and legitimacy theory. This situation examines
mentioned the usefulness of corporate disclosure both to the shareholders, and the stakeholders
of the company using the theory said above. The conclusion of the studies on the ethics and
corporate governance of Webjet exhibits that the organization’s board of directors led by the
chairman is specifically concern with the shareholder's welfare. The diverse communication
within the disclosure starting from remunerations, management fees, share options of key
management personnel, and work ethics indicates the dedication of the company toward
safeguarding the interest of the shareholders.
INTRODUCTION
Webjet Limited is an online travel booking company that was incorporated in 1998. The
company main on-line travel agency (OTA) in Australia and New Zealand are the main leading
on-line travel tools and technology supporting the company growth. The company attention has
mainly be to offer a comfortable and best choice travelling advise for customers. Webjet’s
achieve this through customer involvement in the choice and evaluation of the travel flight deals
both for domestic and international flights. Apart from providing travel booking and scheduling
of flights it connects its customers to travel insurances, various hotels and resorts, holiday deals
and tour guide vehicle lease. Webjet is a first adopter in technology especially for online services
especially in world service travel and a leader in blockchain innovation. During May 2016
Webjet ltd acquired On-line Republic to leverage Webjet’s core competences into attractive
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complementary travel segments. On-line Republic is a market leading global e-commerce group
based in New Zealand specializing in online bookings of rental cars, motorhomes and cruises.
In the year 2013, Webjet established its B2B travel business called WebBeds. The worldwide
B2B market is estimated to generate total Transaction value (TTV) of more than $50 billion and
includes the success of hotel bookings for various tour vendors which include travel agents,
brokers, tour operators and OTAs. The WebBeds included plenty of hotels Americas, middle
East & Africa (AMEA) Sunhotels (Europe), fitRuums (Asia) and JacTravel. WebBeds affords a
simplified business-to-business solution that target to offer the widest range of services at the
lowest fees. Webjet ltd performs a unique multi-supply aggregation method that allows them to
source hotel rooms from a variety of suppliers. In addition to directly contracting room
allocations with key hotels, the company use a wide variety of third-party providers. This method
permits them to provide the best breadth and intensity of hotel room services to their clients.
Webjet low cost structure is a key feature for its strong brand portfolio useful for the expansion
of the company in different markets.
Webjet Limited Corporate Governance
Consistent with the chairman of the board of directors, governance of corporate behavior is a
critical part of the commercial enterprise. The expectancies from the board participants through
the diverse stakeholders of the corporation are high. Therefore, the board should remain focused
together with the management group in promoting an influential tradition of transparency in the
organization (Urde & Greyser, 2016). Moreover, just like some other industry in a nowadays
business environment, the airline transportation industry and travel agencies is dealing with
excessive competition, globalization issues, and other market threat elements. More widely, sound
governance within the airline travel and agency is essential in the expansion and creation of a
sustainable business model.
WebJet Limited Board Composition
The necessities to good corporate governance in an established business enterprise are the board
of directors led by the chairman of the board and its independent and executive directors (Hernik
& Vera, 2017).The shareholders of the enterprise hire the board of directors in protecting the
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interest of the shareholders of the business enterprise. The board of directors should satisfy the
specified experience, statutory and legal issues before being appointed by the company.
Webjet board of directors consists of 6 directors. This is the satisfactory size for sound company
governance. Because the size of the board is quite enough, it offers an excellent combination in
skills, dynamic interaction and participation for higher performance. The ratio of independent
directors and executive directors is 5:1. Non-executive directors who are independent plays a
critical position in balancing the executive director powers and ensuring no person is dominant in
decision making of the organization (Rao & Tilt, 2016). Webjet limited acknowledges the
critical function that independent directors play in securing the shareholders’ interests. The board
of directors of Webjet company has resolved to have a ratio of 5:1, a majority being the non-
executive directors. Moreover, the corporation has resolved that the chairman of the board and
the managing director must be separate individuals. Some of these checks and balances increase
the independence of the board in acting at the best interest of the shareholders.
Chairman and Chief Executive Officer Message
Webjet limited Roger Sharp chairman of the board, is an independent director and does no longer
have any managerial duty within the organization. The chairman is a Non-executive director with
high moral standards and acts with integrity and probity. The chairman message reiterates the
dedication of the board to enhance transparency and sustainability of their reporting to the
stakeholders. For example, the organization disclosed the implementation of a new Corporate
Social Responsibility Statement during the year available for investors in the company website.
The managing director and CEO, John Guscic announcement at the popularity of the
organization, reveal a robust balance sheet that positions the company to take advantage of the
numerous possibilities arising in the changing business surroundings. The CEO is also devoted to
repositioning the organization to take advantage of the growing demand in the airline travel
agency solutions in Australia.
Webjet Limited Remuneration Policy
Webjet limited have a remuneration policy that attracts and preserve notably skilled and
dedicated directors to work as individuals of the board(Qu, Percy, Stewart, & Hu, 2018) .The
directors are remunerated according to their overall performance to the firm common goals. The
chief executive officer and the chairman of the board remuneration are not like the other board
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