Corporate Governance and Risk Management - Analysis of Wesfarmers Limited

Running head: CORPORATE GOVERNANCE AND RISK MANAGEMENT 0
corporate governance and risk management
MAY 28, 2018

CORPORATE GOVERNANCE AND RISK MANAGEMENT 1
Executive Summary-
The stakeholders of the company expect the good corporate governance. The corporate
governance is linked with the control over the activities and effective control over the
corporate sector. The corporate governance describes the issues related to the application of
good corporate governance and responsibilities of shareholders. It monitors the policies,
practices, activities, functions of the stakeholders and decisions of the company.
The corporate governance presents the challenges at the various levels of the company. The
board of Wesfarmers limited is a solid supporter of good corporate governance. The
corporate governance is strengthened by the corporate governance of the Wesfarmers limited.
The main object of the governance board of the Wesfarmers limited is render pleasing return
of the investment of the stakeholders of the company. The governance board of the
Wesfarmers limited compels to accomplish responsibilities and duties in the best interest of
the company and the stakeholders of the company. (Babb, 2017).
In this essay, these very concepts have been explained in detail, and to explain the corporate
governance, the corporate governance of the Wesfarmers limited is analysed.
Introduction-
The corporate governance refers to the process by which corporation is directed and
controlled. The corporate governance balances the interest of shareholders, clients, dealers,
management of the company, investors, government and various communities (Bainbridge
and Henderson, 2018). It also includes the process which helps to achieve pre-determined
objects of the corporation. The board of directors (BOD) of company are liable for the
corporate governance. It is a duty of shareholders to make an appointment of auditors and the
directors. The shareholders of the company are required to ensure the good corporate
structure in the workplace of the corporation. The corporate governance is about the

CORPORATE GOVERNANCE AND RISK MANAGEMENT 2
performance of the functions or actions of the board of directors (BOD) and values of the
company set by them. In the following parts, the corporate governance of an Australian
company Wesfarmers is discussed and critically examined (Bottomley, Hall and Spender,
2017).
Corporate governance of Wesfarmers limited-
The corporate governance of the Wesfarmers limited is examined in the following parts-
An Overview of Wesfarmers limited-
In Australia, Wesfarmers limited is one of the leading organisations. The headquarters of
Wesfarmers limited are situated in the Perth, Western Australia. In 1914, the Westralian
Farmers Cooperative limited was formed as Cooperative Corporation by the Farmers and
Settler’s Association of Western Australia. Later, in 1984 it was formed as Wesfarmers
limited and listed in the Australian Securities Exchange as a public company. Now it has
many hotels, supermarkets, coal mining, gas processing, chemicals, energy distribution,
stores, home care stores, office supplies and the departmental stores. The Wesfarmers limited
is one of the biggest organisations which has more than 210,000 employees and approx
500,000 shareholders (Campbell, 2017).
The main objective of the company is to provide appropriate return to the shareholders of the
company. The purpose of the company is to satisfy the customers and make them happy by
fulfilling their requirements by providing the goods and services at reasonable price. The
company gives protection to the shareholders and provides them opportunity for the future
growth and the success. The founders of the company emphasis on the good corporate
governance of the company. The annual report of the Wesfarmers limited indicates that the
board of directors (BOD) are reliable for giving the adequate gain to the shareholders and

CORPORATE GOVERNANCE AND RISK MANAGEMENT 3
ensures the roles and responsibilities in making good corporate governance of the company
(Clarke, 2017).
The company has key corporate governance documents such as corporate governance
statement 2017, Appendix 4G and Wesfarmers constitution. The corporate governance
statement of the company describes the role and responsibilities of the board of directors
(BOD). The Appendix 4G defines the key disclosure of the corporate governance council
principles and recommendations. The entity is required to lodge Appendix 4G at the same
time when it lodges the annual report of company. The Wesfarmers constitution defines the
whole company.
Wesfarmers limited compiles with law, rules and regulations of the country in which it
operates its business, performs functions in the ethical way and follows the principle of
honesty, principle of integrity, principle of respect and the principle of fairness. There are
some improper conducts like bribery. It considers serious offence for the company as well as
an individual. It is not consistent with value of Wesfarmers limited (Corkery and Taylor,
2018). Following are the purpose of the policy of Wesfarmers limited-
1. Decide the roles and responsibilities of the Wesfarmers group companies and
personnel of the company to stop the bribery and other improper conduct or
misconduct.
2. Give the information about the code of conduct.
3. Give the directions to identify and deal with improper conduct, bribery or corruption.
This policy is applicable to the all Wesfarmers group such as the directors and the employees
of the Wesfarmers group companies. It cannot be amend without the previous permission of
the Wesfarmers board. The operations of Wesfarmers extend to the countries outside
Australia because of the diversified nature of operations of Wesfarmers limited. This policy