Corporate Governance and Ethics of Crown Resort Ltd

ETHICS AND GOVERNANCE OF CROWN RESORT LTD ETHICS AND GOVERNANCE OF CROWN RESORT LTD 12 12 ETHICS AND GOVERNANCE OF CROWN RESORT LTD Name of Student Name of University Author notes Word count Executive summary This report discussed about the corporate governance and ethics of Crown Resort Ltd. Introduction 3 Crown Resort Ltd 4 Corporate Governance of Crown Resort Ltd 5 Composition of the Board 5 Report from Chairperson and CEO 6 Remuneration report 7

Running head: ETHICS AND GOVERNANCE OF CROWN RESORT LTD
ETHICS AND GOVERNANCE OF CROWN RESORT LTD
Name of Student
Name of University
Author notes
Word count

1ETHICS AND GOVERNANCE OF CROWN RESORT LTD
Executive summary
This report discussed about the corporate governance and ethics of Crown Resort Ltd. The main
aim of the study is to understand the company and their working sectors. Crown Resort Ltd has
massive impact in the economy of Australia. The company supports its community by providing
charitable works and employee trainings. Crown Resort Ltd also helps the community by
providing funding through various programs. Crown Resort helps in the employment of the
people across Melbourne and Perth. The annual report of Crown Resort is reviewed to observe
the working sectors and communities of the company. This company follows legitimacy theory,
which should be followed by every organization to support the environment and the community.
From the study, it has been found that though the company’s profit is decreased from the
previous year, it is in good position.

2ETHICS AND GOVERNANCE OF CROWN RESORT LTD
Table of Contents
Introduction......................................................................................................................................3
Crown Resort Ltd............................................................................................................................4
Corporate Governance of Crown Resort Ltd...................................................................................5
Composition of the Board............................................................................................................5
Report from Chairperson and CEO.............................................................................................6
Remuneration report....................................................................................................................7
Board Orientation............................................................................................................................7
Legitimacy theory......................................................................................................................11
Sustainability of the environment..............................................................................................11
Conclusion.....................................................................................................................................12
References......................................................................................................................................14

3ETHICS AND GOVERNANCE OF CROWN RESORT LTD
Introduction
The combination of processes and laws, which controls and directs a firm, is called
corporate governance. Corporate governance includes all the processes and regulations which a
business follows (Davies, 2016). The corporate governance and business ethics of Crown Resort
Ltd will be discussed in the report. The study will help to understand about Crown resort Ltd, its
working sectors and roadmap of their business. The annual report of Crown resort Ltd will be
observed thereby discussing the corporate governance of the company. The remuneration reports
will be also discussed to observe the remunerations of the directors and managers. The report
from the CEO and chairman will help to understand the objectives and strategies of the company.
The board orientations of Crown Resort will be also discussed. The legitimacy theory will be
used to observe whether the company follows the theory or not. Along with this, the necessary
reports and information’s will be accessed to understand the industry and its ethical outlook. The
study will help to understand about the governance of the industry as well as will provide
necessary details about their business and operations.

4ETHICS AND GOVERNANCE OF CROWN RESORT LTD
Crown Resort Ltd
Crown Resort Ltd is one of the leading resort group in Australia that was founded in 2007
at the Southbank, Melbourne. This Australian company purchased the Consolidated Metal
holdings company in 2007 for $1.75 billion, which was named Publishing and Broadcasting
Limited (PBL) before. PBL decided to divest their assets of the business. Therefore, Crown
Resort owned the business of PBL. However, this agreement was ended at 2009. Therefore,
Crown Resort owned 24.5% stake of the company for $370 million and paid termination fees of
$50 million. Crown Resort Ltd tried to enter the Las Vegas market in 2008 by acquiring a
percentage of share from Fontainebleau Resort. They acquired the share for $250 million. This
resulted in a loss followed by the bankruptcy of Crown Resort Ltd. Crown resort spread their
area of operation from 2013 onwards. Crown Resort tried to open their casino in Sri Lanka,
which was cancelled in 2015 by the president of the country. Crown resort purchased the casino
and hotel in Las Vegas named New Frontier hotel and Casino in the year 2014.Crown Resort
announced Crown Sydney in 2016 which will be built in 2020. Crown Sydney will be the first
six-star hotel in Australia with the view of Sydney Harbour Bridge and Sydney Opera House.
Crown Resort opened Alon Las Vegas in 2018 that was worth $6 million. James Packer, the
chairperson of Crown Resort decided to sale 20% of the share of the company in the year 2019.
This company has a massive impact in the economy of Australia by providing employment to the
people and training to the employees. This company also meet its corporate responsibilities
(Helfaya, Whttington & Alawattage, 2019). The business and investment of Crown Resort Ltd is
mainly based on integrated resort sector. Crown Resort owns two huge integrated resorts in
Australia. Crown Melbourne and Crown Perth are the two main areas of operation of Crown
Resort Ltd. These resorts provide entertainments to all the tourists who comes to explore

5ETHICS AND GOVERNANCE OF CROWN RESORT LTD
Australia. Crown Resort will be building their new project in Sydney and developing a site in
Melbourne soon. Crown Resort also operates crown Aspinall in London. They also own multiple
casino’s in the west end of the city. Crown Resort provides entertainment across Australia and
other cities overseas (Tham & Huang, 2018). Crown Resort owns huge number of equity shares
in the U.K and in Nobu. They own 50% equity interest in U.K and 20% in Nobu. The net profit
of the company as per the 2019 annual report is estimated at $ 368.6 million, which was reduced
from the previous year profit (Crownresorts.com.au, 2020). Crown resort also owns Betfair,
DGN Games and Chill Gaming that provides entertainment services like online gaming and
betting services across the country. Betfair is a betting exchange group for Australia and New
Zealand customers. DGN games provides online gaming to the customers. Crown Resort and
New Gaming Pty Ltd jointly owns Chill gaming, which develops and innovates entertainment
products and services.
Corporate Governance of Crown Resort Ltd
Composition of the Board
The board of Crown Resort Ltd maintains and implements good corporate practices.
Crown Resort follows eight principles of governance, which includes act ethically and
responsibly, safeguard integrity in corporate reporting, recognization and management of risks
etc. The board of the directors monitors and guides the business, which includes decision-
making, identification of business risk and risk management process (Deegan, 2014). Crown
resort has some committees to help them in carrying out the responsibilities of the business. The
total number of members in the committee is 24 including one chairperson in each committee.
There are 11 directors in the organization who helps to achieve the business goals. There are 7
independent directors and 4 non-independent directors. The ratio of the directors is 7:4. The

6ETHICS AND GOVERNANCE OF CROWN RESORT LTD
chairperson of the board is non-independent as founded in the annual report of Crown Resort
Ltd. The directors follows the rules and regulations of the business ethically.
Report from Chairperson and CEO
The Chairperson of Crown Resort Ltd is John Alexander and James Halstead is the CEO
of the company.
From the report of the chairperson, it has been observed that the company has a major
contribution to the economy of Australia by providing entertainment to the tourists across
Australia. Crown Resort Ltd also provided employment to 18500 people across Australia in over
700 roles across the resorts. Crown also helps the staffs to develop their career by providing
training and services. Crown Resort is Australia’s most visited tourist resort that also supports
the community by providing charitable programs through their employees. Crown also operates
and monitors government agencies across Australia for the community welfare. Crown reported

7ETHICS AND GOVERNANCE OF CROWN RESORT LTD
net profit amounted to $368.6 million after paying taxes. The net profit was decreased from the
past years, which is due to the some poor market conditions. Final dividend of 30% per share
was declared and 60 % of total dividend was paid during the year. Further, Crown Resort focuses
on the return of the shareholders and continues to improve area of Crown Melbourne and Crown
Perth.
The report of the CEO shows that the revenue of Crown Resort has decreased by 5.4%,
which is due to the reduction of the VIP program. The revenue earned from games continues to
increase during the year. Crown Resort ensures the consistency of their performance thorough
their employees and provides opportunities to all of the employees. Crown Resort has dedicated
facilities in the cookery, hospitality and patisserie sections. Moreover, Crown also supports the
gender equality thereby; they introduced Gender Action Plan in 2019. Crown also supports
woman gaming and hospitality thus; they sponsored the Woman Gaming and Hospitality
(WGH). Crown also focuses to improve the industrial relation. Crown Resort also intends to
improve the health, safety and welfare of the employees.
Remuneration report
The remuneration report of Crown Resort Ltd outlines the remuneration of the directors
and the executives in accordance with Corporations Act 2001. The remuneration report applies
to all of the executive and non-executive directors of the company as well as the other executives
of the firm. The non executive directors are not provided with any incentives and performance
based fees. They are only provided with fixed remuneration. The senior executives receives both
fixed and performance based remuneration. The chairperson of Crown Resort is non-independent
directors as per the principles and recommendations of the board. The percentage of the
incentives depends on the performance of the senior executives in the company.

8ETHICS AND GOVERNANCE OF CROWN RESORT LTD
From the above table, it can be observed that all of the non-executive directors receives
salaries as well as superannuation benefits. The total salary of the non-executive directors are

9ETHICS AND GOVERNANCE OF CROWN RESORT LTD
estimated at $1,755,105. John Horvath receives the highest number of salary amounted to
$310,565. The senior executive director receives non-monetary and other superannuation
benefits along with their salaries. Todd Nisbet receives the highest number of salary among the
senior executive directors amounted to $4,197,596.
Board Orientation
Board orientation is a procedure that helps the board members to understand the
important information’s and policies about the company. Board orientation should contain all of
the information as well as roles of the directors and ensuring no new directors are provided with
wrong information about the organization. There are certain principles, which Crown follows
that includes management and oversight of the board, remuneration to the employees, act
ethically etc. Crown Resort also follows certain code of conducts (Hemphill & Laurence, 2018).
The process of board orientation starts with recruitment of new directors. Crown Resort has
majority of independent directors and their concentration is on the growth of the shareholders.
There are five board orientations, which is based on the composition of the directors. The board
orientation of Crown resort is summarized below
Orientation Board Composition Board Focus Key
Communications
Shareholder-Agency 7 Independent directors
4 Non-independent
directors
Profit maximization
Shareholders wealth
maximization
Remuneration
Report, Income
statement ,Balance
sheet,
Board orientation of Crown Resort Ltd

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The board orientation helps in the growth of the revenue as well as helps the directors
with profit maximization of Crown Resort. The main aim of board orientation is to provide all
the necessary information regarding board’s roles and responsibilities. Board orientation should
contain all of the information as well as roles of the directors ensuring no new directors are
provided with wrong information about the organization.
Board Composition
The board of Crown Resort is mainly focused to maximize their profit as well as growth of their
shareholders. From the annual report of 2019, it can be observed that the Crown Resort board is
a shareholder agency. The board is said to be shareholders agency if it has most independent
directors. The new directors are recruited as well as trained to maximize the profit of Crown
Resort. The independent directors are given other benefits other than salary. As the member of
the board, the non-independent directors are provided with other benefits along with their salary.
Crown Resort has some committees that helps the board with decision-making (Nahum &
Carmeli, 2019). The nomination and Remuneration committee provides structure of the board to
the directors in order to improve director’s competencies and provide skill improvement
programs to the directors. The board of the directors are also committed to create and deliver a
safe and working environment to the employees.
Board focus
The main focus of the board of Crown Resort is to maximize the profit of the company by
providing growth opportunity among the new shareholders by providing them with training
facilities. Under the board orientation, the board also focuses to improve the connection between
the shareholders and the agents. The board of the directors are mainly focused in decision
making of the company and maximize the growth of the shareholders. The board remains

11ETHICS AND GOVERNANCE OF CROWN RESORT LTD
dedicated to their 10-year funding plan which will provide education to the youth children across
the community. The board also focuses to provide environmental and social sustainability, which
increases the reputation of Crown in the community. The major focus of the board of directors
are
 To boost up the revenue of the corporation. The revenue of the firm has decreased by
4.7% by the previous year 2018.
 To provide the shareholders with cash returns to the shareholders.
 To deliver the Crown Sydney project on time.
 To maintain the efficient and appropriate capital structure of the company.
Secondarily, the board concentrates on the sustainability of the environment. The secondary
focuses of the board are
 To follow good corporate governance practices to ensure that the employees are
following their responsibilities and following the business ethics (Timms, 2018).
 To deliver environmental sustainability program which ensures that the environment is
safe followed by the sustainable development (Centobelli, Cerchione, & Esposito, 2018).
 To provide sustainability in three key areas, which are energy, waste and water
management (van der hoek, Struker & De Danschutter, 2017).
The net profit of the company has decreased to $402.9 million in 2019 which was $573.2 million
in 2018. The directors are focused to rise the net profit of the company. The total assets of the
company is also decreased and the liability is increased during 2019. The growth in the economy
of Australia is also affected by the decrease in the revenue of Crown Resort as Crown Resort has

12ETHICS AND GOVERNANCE OF CROWN RESORT LTD
a major impact in the Australian economy. Crown also declared dividend worth $409 million.
The dividend was $413.4 million in the last year.
Key communication
The communications helps to understand the stakeholders of the company by establishing proper
communication among them. The disclosures of key communications are executed through the
remuneration report, income statement and the balance sheet. Crown Resort made their
disclosures through their income statement, remuneration reports and balance sheets. Crown is
mainly focused to provide all information’s to the shareholders regarding the developments that
is affecting Crown Resort. Crown also engages with the shareholders through the programs and
meetings. Crown also has dedicated communication policy which helps the shareholders to
effectively communicate with Crown. The communication channel incudes annual reports, ASX
disclosures and notices of meetings and memorandum. The shareholders are notified to
participate in all of the meetings of Crown Resort. Crown AGM advertises about the meeting
through the website of Crown. Crown Share registry effectively and actively encourages the
shareholders to receive the communication electronically as well as provided online access to the
information’s. Crown also has their own website through which the shareholders can contact to
the company.
Legitimacy theory
Legitimacy theory is the most discussed theory in the corporate governance. Legitimacy
theory is a concept that supports the implementation of the organization by supporting and
developing the social and environmental framework (Patten, 2019). The environmental
indicators should be properly noticed by the company in order to provide proper sustainability
(Vejzagić, Brown & Schmidt, 2018).The main purpose of legitimacy theory is to fulfil the social

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responsibility in the corporate governance (Ferrel, Fraedrick & Ferrel, 2015). Legitimacy theory
also helps in sustainability of the firm through the welfare of the community. Legitimacy theory
provides certain norms to the company that a company should follows in order to operate within
the respective society. Legitimacy theory provides the entire development framework through
social and environmental reporting. The main concept of this theory is to evaluate the
relationship between the company and the environment (Deegan, 2019). As observed in the
annual report, Crown Resort followed the legitimacy theory in order to achieve environmental
sustainability. They are also supporting the community welfare and social welfare. The company
has also implemented Corporate Social Responsibility strategy in order to fulfil the social
contract of the company (Frynas & Yamahaki, 2016).
Sustainability of the environment
Crown also recognizes its responsibility to the community by supporting various
charitable work and social works across the community. Crown Resort supports the
sustainability of the environment and has certain programs that helps the environment. Crown
Resort won several rewards for implementing the environmental program (Anderson, Fuller &
Evans, 2017). Indigenous Employment Program provided employment to the islander people of
Torres Strait, Australia. Reconciliation Action plan (RAP) committee also provides employment
to the people across Melbourne and Perth (Ewing et.al, 2017). Crown Resort has taken several
initiatives to reduce the impact of environment that includes focusing on the waste management
and lowering the energy consumption (Lee, Cin & Lee, 2016). CROWNearth program provides
sustainability to the people across Australia. CROWNearth also focuses on energy, waste and
water management around the community. Crown also focuses on recycling their waste products.
Therefore, they started Recycle90 program that helped to deliver the waste products to the

14ETHICS AND GOVERNANCE OF CROWN RESORT LTD
landfill. The hotels of Crown Resort recycles around 40 tons of soft linens every year. Crown
Resort provided education to the children across the community. The children across the
community is also provided with art, education and cultural program. Crown Resort also
allocated $200 million to the National Philanthropic Fund. This foundation provides economical
supports to the different sectors of the community. This community helped Perth Children
Hospital by providing $12.5 million in the last five years. Crown also provides training to its
employees and mentors their performance in the organization. Crowns also promotes gender
equality hence they started Gender Action Plan in 2017 (Ioannides, 2017). The employees of the
Crown Resort is provided with environmental friendly workplace. Crown Resort established
Crown Resorts Foundation that supports the sustainable development of the community as well
as provides employee-led community programs.
Conclusion
From the above discussion, it can be observed that, Crown Resort is a group of resorts,
which provides entertainment to the tourists across Australia. Crown Limited follows the
legitimacy theory and supports the community and sustainability of the environment. Further, it
can be also noticed that the company is in a good financial position though there are some
reduction in the net profit compared to previous year. Crown Resort mainly focuses to provide
growth opportunity to the shareholders as well as profit maximization of their business. As per
the study, it has been founded that Crows Resort also provides induction to the new shareholders
of the company. From the report, it has been also found that the company provides fixed
remuneration to the non-independent directors and the senior directors are provided with some
extra incentives along with their remuneration.

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