Corporate Governance and Regulation Comparison

The report provides a comparison of corporate governance frameworks in the US, Australia, and the UK. It discusses key regulations such as the Sarbanes-Oxley Act, UK Corporate Governance Act, and Australian Securities and Investments Commission (ASIC). The report also explores mechanisms of corporate governance, benefits to organizations, and how boards can be influenced when exercising their powers.

CORPORATE
GOVERNANCE

Table of Contents
INTRODUCTION...........................................................................................................................1
PART A...........................................................................................................................................1
Question 1...................................................................................................................................1
Question 2...................................................................................................................................2
Question 3...................................................................................................................................2
PART B............................................................................................................................................3
CONCLUSION................................................................................................................................3
REFERENCES................................................................................................................................4

INTRODUCTION
Corporate governance refers to the combination of laws, rules and processes through
which business are being controlled, operated and regulated. It includes the internal and external
factors which affects the interest of a company's stakeholders, including government regulators,
management, customers, suppliers and shareholders. The board of of directors are responsible for
creating a framework for the corporate governance which best aligns business conduct through
objectives. The major processes which can be outlined in corporate governance includes action
plans, disclosure practices, dividend policies, executive compensation decisions, procedures for
reconciling conflicts of interests and implicit or explicit contract between stakeholders and
company. Present report is based on Gold Limited (GL)(Aguilera, Judge and Terjesen, 2018). It
is a gold mining entity based in US with its head office in New York. This report consist of
comparison of differences between the American mandatory corporate governance regime with
Australia's and the UK's principles based approach. Further it consist of discussion on which
approach is likely to result in higher standards of corporate governance with example of an
organisation. It also includes the way in which board will be influenced when exercising its
governance practices. Lastly, this report consist of evaluation of corporate governance within an
organisation is different from management of an organisation.
PART A
Question 1
Corporate governance is the system of rules and regulations,collection of laws, mechanisms and
processes to control, balance, synchronise and to run the businesses and to facilitate long lasting
success of the company and help the investors to choose right organisation the investment. It
describes all the rights along with the responsibilities of all the participants of the company.
Board of directors are mainly responsible for handling the company. It encircles balancing the
interest of the stakeholders and shareholders and also affect the customers, and suppliers of the
company. Corporate governance generally monitors the policies and the decisions of the
company(Black and et.al, 2018).
Sarbanes Oxley Act: this act based on the Corporate governance in the America. This Act
stabilized in the 2002 by the American government. Accordingly to this act company will the
proper report to the investors for the financial report of the company. It is mandatory for the
senior officer of the corporation to to clary the all things which is written in the financial
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statement of the company(Armstrong and et.al, 2015). This act help the investor to take right step
for the investing in the any organisation. According to the Act this will increase the
responsibility of the organisation and help the to give the punishment which are doing the fraud
with the investment and the organisation as well. According to this act all company will be listen
in this act first then after that if any company denied to give proper report to the investor then
investor able to take the legal action for that and government support that and give the action
for that.
UK Corporate governance Code: this help to create the relation between the companies ,
stakeholders, stockholders which make the long term suitable growth of the UK(Bain and Band,
2016). This act work in US and According this act every company have an effective board and
provide the proper knowledge about the financial statement and give always necessary
information when they need . this act insure that the organisation must have mutual
understanding with the stakeholders. this is the duty for the board that they satisfied with the
proper information. This Act help the the investors the create the good relation between the
Stockholders and the organisation.
Australian Security and investment Commission:this act insure that the they regulate the
organisation and financial service to protect the customer from the fraud by the company(Black
and et.al, 2018). this act provide the proper information about he company which help them to
thing about the right way to invest in the company. Australian government insure that they
provide the proper information about the organisation so they use the official website that and all
companies listen on it and customer take the proper information on that and then if any one
needs the information about that they will take from the website. This will help the investor to
invest in the right place and it avoid the chances of the fraud.
Sarbanes Oxley Act more effective in the Corporate governance than the other Act
because it will provide the safe environment to the inverter to the invest in the organisation and
also provide the all details about the financial statement of the organisation which help to make
the decision in the right way to invest in the organisation and help to protect the customer and
also he organisation as well(De Haan. and Vlahu, 2016). Gold limited use this act which help
them to find the right investment because American government take the serious actin about that
which reduce the fraud by the organisation and inverter as well and also help to provide the
proper knowledge about the financial report that help to create the crystal clear relation between
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the inverters and the organisation and also help the gold limited company to clear the past things
which they are faced by the investor and improve the relation of that.
Question 2
There are different concept that describes corporate value which includes intrinsic value,
book value, nominal value, liquidation value and market value. The most effective concept is
intrinsic concept for determining corporate governance. Corporate ratings has the elements of
judgements, projections and estimates(Dimopoulos and Wagner, 2016). The basic concept of
assessment includes the value is being determined with time and certain period, it is to be
determined at a reasonable price and the ratings are not being influenced by a group of buyers.
The mechanism of corporate governance helps all the stakeholders to oversee
management and corporate insiders. The resource dependency theory state that the board can
facilitate access to the resources. The five propositions of the board diversity includes corporate
diversity encourages in better understanding of the market where it is associated with the
customer and suppliers demographic conditions that is also diverse, leading in increasing the
corporate ability for penetration of market(Jacoby, 2018). Secondly, diversity helps in increasing
innovation and creativity. Third, diversity produces a much more effective solutions to the
problems. Fourth , diversification helps in improving the effectiveness of company's leadership.
And lastly, it encourages much effective global relationships.
For most of the corporations, the most basic governance structure is this where
shareholders votes and empower the board of directors who will be having the responsibility to
look after the interest of shareholders(Larcker and Tayan, 2015). The board hires a CEO who is
accountable to the board. CEO is responsible for hiring a management team and the process
goes on. Gold Limited Social welfare is based on the premises which company should engage in
dealing fairly with all of the stakeholders which includes communities, customers, suppliers and
employees including shareholders also in accordance with expectations of the larger society in
which Gold Limited operates.
There are many benefits of Corporate governance to Gold Limited which includes
funding, more effective management, forward planning, reputation and managing risk and
supporting innovation. By funding a proper governance system improves a company's ability to
gather external funding and its ability to grow(Leipziger, 2017). If there are clearly justified roles
and responsibilities within the business with easily understanding internal processes that will
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help the company's management and operations to improve. A board which is properly
constituted that holds regular meetings to discuss the long term strategy of the company is
important for Gold Limited. By having a risk management process in the company which is
supported by internal controls, then the company can determine, monitor and mitigate risks.
Gold Limited diversification effect on corporate values play a vital role. All resources
that are being used by the company must be used optimally, which can encourage the company
to improve performance and potential for the purpose of wealth(McCahery Sautner and Starks,
2016). Diversification of human resources structure which is related to gender mix is seen as
important to optimize essential resources of Gold Limited. Directors can influence in this manner
so that they work effectively and efficiently. Board members who are having higher diversity
will be able to face the challenges and dynamics of the business environment in a better manner.
Corporate governance can be influenced by corporate value by Gold Limited CEO and
board members. Mechanism of corporate governance which is being provided by the board of
directors is a significant element in the Gold Limited which helps in monitoring the managers.
The monitoring that is to be help by board of directors will help in preventing the management to
perform detrimental actions to the shareholders for the purpose of reducing losses and costs
caused by the management(Tricker and Tricker, 2015). The smaller number of board of directors
are much more effective in a company than the company having a huge number of board of
directors.
Question 3
Corporate governance means the controlling the action of a group which is helpful or
beneficial for the whole organisation and the management is known as the managing the all
people in the organization. Corporate governance deal in the real business world and crate the
polices and also insure that the how the people will react on that. They made the polices for the
all people of the organisation and it include that the Boards of Directer and the family members
of the companies. Management takes the action to lead the company in positive direction. When
corporate governance make any policy for the organisation then it is the responsibility for the
management of the organisation to apply this on the organisation and provide the proper
knowledge of the policy to the employee(Watt and Schwartz, 2018). If any employee needs help
regarding to the policy them management will provide the help as soon as possible. Management
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manage the all things which are needed to the employee and provide the solution for the thing in
the organisation or at the work place. Management includes the the manager, head of
department,chief executive officer, Chief operative officer etc. both are work to improve the
performance of the organisation but use the different way on this and the both are very important
for the organisation profit.
corporative governance maintain the polices for the business which help them to avoid
the specific conflicts of interest and fraud activity for the organisation(Yermack, 2017). Gold
limited board of direct make the polices which help them to grow in the market and handle the
stockholders at the time of financial statement. Management create the plans for development in
the organisation and fix the pricing of the product and also take the decision about the
promoting the product and also take the decision about the distributed the product. Management
of the gold limited make the plan and strategies about he distribution of the their product and
also take the decision about the promotion of the product(Aguilera, Judge and Terjesen, 2018).
Corporate governance evaluate the agreed on the objectives of the enterprise and make
the decision making for the organisation. Gold limited use the corporate governance in the
organisation that all board member give the views on the polices and then it applies or make the
decision on that. Management only follow the the polices which are make by the Directors.
Gold limited has both corporative governance and management in the organisation both
are work separately and they connected to each other and also both are depends on each other
but did not inter fare in the work of each other(Armstrong and et.al, 2015). When the corporate
governance of the gold limited make any decision about organisation then after that management
implement on this on the organisation and help the corporate governance to implement this son
the organisation. Corporate governance make the plan for the organisation and management have
the duty to check that the this plan is work for the organisation or not if it is Working then
implement that on organisation and then give the proper review of that to the Corporate
governance(Bain and Band, 2016).
PART B
( Covered in ppt.)
CONCLUSION
From this report, it can be concluded that corporate governance is the combination of
laws, rules and processes through which business are being controlled, operated and regulated. It
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report comprises of the comparison between the American mandatory corporate governance
regime with Australia's and United Kingdom's principles based approach which helped in
learning about the corporate regulatory framework in America, Australia and United Kingdom. It
includes Sarbanes oxley act, UK corporate governance act and Australian security and
investment commission is being discussed. Further it is consist of mechanism of corporate
governance where all the five diversifications are being discussed. It also includes benefits of
corporate governance to an organisation which consist of funding, more effective management,
forward planning, reputation and managing risk and supporting innovation. Further this report
involve the ways in which a board may be influenced when exercising its governance powers
that helped in determining the legal powers of the board is derived from a company's
constitution. Lastly, in this report evaluation of a statement is being done which is corporate
governance within an organisation is different from management of an organisation.
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REFERENCES
Books and Journals
Aguilera, R.V., Judge, W.Q. and Terjesen, S.A., 2018. Corporate governance deviance. Academy
of Management Review.43(1). pp.87-109.
Armstrong, C.S.and et.al, 2015. Corporate governance, incentives, and tax avoidance. Journal of
Accounting and Economics. 60(1). pp.1-17.
Bain, N. and Band, D., 2016. Winning ways through corporate governance. Springer.
Black, B. and et.al, 2018. Which Aspects of Corporate Governance Do and Do Not Matter in
Emerging Markets.
De Haan, J. and Vlahu, R., 2016. Corporate governance of banks: A survey. Journal of
Economic Surveys. 30(2). pp.228-277.
Dimopoulos, T. and Wagner, H.F., 2016. Corporate Governance and CEO Turnover Decisions.
Swiss Finance Institute Research Paper. (12-16).
Jacoby, S.M., 2018. The embedded corporation: Corporate governance and employment
relations in Japan and the United States. Princeton University Press.
Larcker, D. and Tayan, B., 2015. Corporate governance matters: A closer look at organizational
choices and their consequences. Pearson education.
Leipziger, D., 2017. The corporate responsibility code book. Routledge.
McCahery, J.A., Sautner, Z. and Starks, L.T., 2016. Behind the scenes: The corporate
governance preferences of institutional investors. The Journal of Finance. 71(6).
pp.2905-2932.
Tricker, R.B. and Tricker, R.I., 2015. Corporate governance: Principles, policies, and practices.
Oxford University Press, USA.
Watt, D. and Schwartz, B., 2018. Governance in view: Done right, corporate governance audits
can generate great value for organizations. Internal Auditor. 75(1). pp.48-53.
Yermack, D., 2017. Corporate governance and blockchains. Review of Finance. 21(1). pp.7-31.
online
Sarbanes-Oxley Act (SOX). 2015 [ONLINE] Available through:
<https://searchcio.techtarget.com/definition/Sarbanes-Oxley-Act>
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