Ethics & Governance: Individual Capstone Project1

Ethics & Governance: Individual Capstone Project
Name:
Student ID:
Unit Name:
Unit Code: ACCT20080

Executive summary
The ethics and board orientation are important for the organization, Charter Hall Long WALE
REIT as it mainly helpful in identifying the board members for decision making process. They
are mainly identifying the ratio of non-independent as well as the independent shareholders who
knows the ways to run a company within the market. They are mainly looking after the pay scale
of all employees who are working within the organization. This is mainly looking after the
remuneration reports of the organization, Charter Hall Long WALE REIT which are identifying
the annual report.
In short, it can be said that, Charter Hall Long WALE REIT is a company which operates in the
real estate sector. It is a well known company in ASX, and has its reputation for returning the
investors a stable and secure income. Also, it is run by its own board of directors and company
secretaries.

Table of Contents
Executive summary.....................................................................................................................................2
Introduction.................................................................................................................................................4
Report..........................................................................................................................................................4
Introduction and Summary of the company............................................................................................4
Corporate Governance at Charter Hall Long WALE REIT..........................................................................5
Board Orientation of Charter Hall Long WALE REIT.................................................................................7
Interpretation of communications of Charter Hall Long WALE REIT by using Legitimacy Theory............9
Conclusion.................................................................................................................................................11
Reference list.............................................................................................................................................12

Introduction
Governance as well as ethics is important with the organization, the company Charter Hall Long
WALE REIT as it mainly determines the development of a strong as well as balanced economic.
This mainly determines the interest of all stakeholders who exists within the organization. This
mainly provides a safeguard to the organization for any kind of risk within the market. The
corporate governances are mainly affecting the operational risks which are sustainable for the
corporation of the organization, Charter Hall Long WALE REIT. This mainly helps the
organization in achieving the goals by minimizing as well as controlling the risk. This also helps
in assuring the compliances within the organization (Zimmerli Richter & Holzinger, 2017). In
the research, the importance of ethics has been explained that it brings benefits to the business
organization. This mainly helps in attracting the customer who exists within the international
market. They are mainly helpful in boosting the sales process of the organization. The corporate
governance mainly looks after the composition of board members within the organization,
Charter Hall Long WALE REIT (Biobank, 2017). It mostly looks after the ration of directors and
the employees who exists within the organization. The directors are responsible for focusing on
the payment of the employees who are working within the organization. The board orientation
mainly looks after the annual report of the organization, Charter Hall Long WALE REIT as well
as it website. In this study, the Legitimacy Theory has been mused for a proper communication
within the organization. Therefore, the study sheds light on the important of ethics, the board
orientation (Grayson & Hodges, 2017), the communication process and the corporate governance
within the organization, Charter Hall Long WALE REIT.
Report
Introduction and Summary of the company
Ethics and corporate governance are two important part of any company in order to run a
company smoothly. The organizations or companies, where we work are more than just

structures. As all of the company is mainly posed or imagined as fictional characters, so, it has
some of the personality traits too. In order to keep the ‘character’ clean and transparent ethics
(Crane et al,. 2019) and corporate governance plays an important role. These ethics and cultures
make a company different than another one.
Corporate culture plays a major par in corporate decision making. There are mainly two types of
organization cultures (McCahery, Sautner & Starks, 2016). Those are - concern for people and
concern for performance. These two types of dimensions represent four types of organizational
cultures. These four types of cultures are - apathetic, caring, exacting and integrative (Demise,
2016).
In this project, a company from real estate sector is used. The company chosen is named Charter
Hall Long WALE REIT. Charter Hall Long WALE REIT is a listed company of ASX or also
known as Australian Security Exchange (Peters, 2015). The code of this company as per ASX or
Australian Security Exchange is CLW. This company is basically a Real Estate Investment Trust
or REIT. The REIT grows its portfolio actively through both direct and indirect investments
throughout various estates.
Charter Hall Long WALE REIT is listed officially in Australian security exchange as on 8th of
November, 2016. The registered address of this office is Level - 20, 1 Martin Place, Sydney,
NSW, Australia, 2000. Though, the share registry office of this company is different than above.
It (share registry office) is registered on Link Market Services Limited, Level - 12, 680 George
Street, Sydney, NSW, Australia 2000.
Charter Hall Long WALE REIT tries to make sure that the investors can get their investments
back. Stability and security in income helps the investors in building confidence and trust
towards Charter Hall Long WALE REIT. Both of the capital growth and stable income helps
Charter Hall Long WALE REIT in gaining the exposure in real estate sector.
Real estate sector is one of the prime ways of investment for people. It deals with real means
tangible assets (for example – land, building, plot etc.). As per the information available, the
fiscal year counted for this company (Charter Hall Long WALE REIT) is 30/06, which means
30th of June of each year.

As per the recent history of this company, this company owns almost 118 properties (as per 31st
December, 2018). Also, the value of the portfolio of Charter Hall Long WALE REIT is almost
around $2.13 billion and occupancy of the company is near about 99.6% (as per report of June
30th, 2019)
Though, Charter Hall Long WALE REIT has managed to earn a high revenue and profit, they
still focus on community (Phillips & Moutinho, 2018). They try to return their debt through the
form of the corporate social responsibility. In order to do that, they invest in society or
community more. They also engage their stakeholders to actively participate in these types of the
program.
Corporate Governance at Charter Hall Long WALE REIT
Corporate Governance is an important part of any company’s rules and regulation/. In order t run
a company smoothly, the senior management or the board of directors chalks out a plan about
how to run a company. This plan mainly includes the principles of the company (Hoffman &
Rowe, 2017). As a company is imagined as a fictional character, so, they also have their own
personality or principles (Yermack, 2017). While structuring the corporate Governance, the
management should take care of the value added in the company. Any company with a high
moral value gets a lot of benefits. So, including the corporate social responsibility or CSR in the
list is beneficial.
Corporate Governance helps in building a frame or structure of a company. The company
Charter Hall Long WALE REIT is also follows the same rule. The details of structure of the
company are discussed briefly next. The company Charter Hall Long WALE REIT has its own
board of directors to lead the company (Durkheim, 2018). In the top, it has a chairman, then two
executive directors and two non executive or independent directors. Also, one company secretary
and one join co. secretary is included in the board. The company Charter Hall Long WALE
REIT has two executive and two non executive directors in the board (Othman & Rahman,
2017). So, we can say that they have perfect ratio of 1:1 for independent and non- independent
directors in the board.
In order to set up a perfect Corporate Governance, there are a few rules or principle, which must
be followed. Some of them are as follows –

Laying a strong foundation for management in oversight, adding some moral value in the board,
having sense of ethics and responsibility (Tricker & Tricker, 2015), protecting the integrity of
corporate reporting, disclosures should be published in time and also with honesty, respecting
and maintaining the core rights of security holders (Nordberg, 2018), and also, remunerating
everyone in the most appropriate way.
The directors of the company are remunerated by fees. These fees are not related to the with the
performance of the company. The executive directors of the Charter Hall Long WALE REIT are
considered as the employees. So, they are paid by the company only (by the Charter Hall Long
WALE REIT).the chairman Mr. Peeyush Gupta is paid near around $140000, in the Financial
Year 2017 - 18. Also, the two non executive directors of the company, Mr. Glenn Fraser and Mr.
Ceinwen Kirk-Lennox are paid by the company Charter Hall Long WALE REIT from time to
time. The decisions of paying the directors and chairman are taken by the responsible entity of
the company.
The remuneration paid to the board of directors is as follows:
Board of directors Position Remuneration paid
by authority
Paid in
2018 (in
$ ‘000)
Paid in
2017 (in
$ ‘000)
Mr. Peeyush Gupta Chairman Responsible entity of
the company
140000 135000
Glenn Fraser Non Executive
Director
Company itself 110000 97000
Ceinwen Kirk-Lennox Non Executive
Director
Company itself 95000 94073
David Harrison Executive Director
and also the Chief
Executive Officer
(CEO) of Charter Hall
Log WALE REIT
Responsible entity of
the company
Not
disclosed
Not
disclosed
Adrian Taylor Executive Director Responsible entity of Not Not

the company disclosed disclosed
Board Orientation of Charter Hall Long WALE REIT
This company has its own board of directors and as well as company secretaries. This company
Charter Hall Long WALE REIT is headed by the board of directors. In this board of directors,
chairman, executive director, and independent director are included. Mr. Peeyush Gupta is the
chairman of the company. This company has two executive director named Mr. Davis William
Harrison and Mr. Adrian Tasman Fransis Taylor. As for the independent director or non-
executive director, there are two names available too. Those names are – Mr. Glenn Montgomery
Fraser and Ms. Ceinwen Kirk-Lennox. Also, Charter Hall Long WALE REIT has a Company
Secretary and another joint Co. Secretary. They are – Mr Mark Bryant and Mrs. Charise Mignon
Nortje as Company Secretary and Joint Co. Secretary respectively. As the fund manager, Charter
Hall Long WALE REIT has Mr. Avi Anger.
Charter Hall Long WALE REIT is a company who believes in transparency. So, in order to
maintain the transparency, frequent auditing is carried on. The auditing is done by
PricewaterhouseCoopers, also known as PwC. The office of PwC is located on One International
Towers Sydney Watermans Quay, Barangaroo, Sydney, NSW 2000.
Charter Hall Long WALE REIT achieved multiple successes in the last financial year. In the
Financial Year 2017-2018, Charter Hall Long WALE REIT managed to keep their occupancy
percentage at 100. Also, this company has managed to complete $101 million of new properties.
Currently (as per annual report of the FY 18) the company is possessing 81 properties. Charter
Hall Long WAKE REIT is expecting no major lease expiry till Financial Year 2021. That is why
this company is expecting for major returns towards their shareholders.

Ethics & Governance: Individual Capstone Project
Name:
Student ID:
Unit Name:
Unit Code: ACCT20080Corporate Governance has various definitions. Also, it helps a company in many areas. But,
along with other sides, corporate Governance helps in orientating the company and
understanding the composition and focus needed for it. Each of the part has different job an
focus. Also, they have a different composition. So, in order to maintain the stability and avoid
conflict, corporate Governance helps in keeping it simple. The table drawn below will help to
understand the focuses of its -
Orientation Board Composition Board Focus Key Communication
Shareholder (Agency) Shareholders are
appointed by the
company itself.
Majority of them are
independent.
These branch of
shareholders focuses
on the different needs
of shareholders. Some
of them are growth,
profits, dividends etc.
(Fassin & Van
Rossem, 2019).
They are mentioned at
remuneration report of
the company, also,
income statement and
the balance sheet of
the company
mentioned about
them. They are mainly
mentioned at the
equity share part of a
balance sheet

(Stephens et al,.
2019).
Shareholder
(Stewardship)
These are the part of
shareholders, most of
whom are non
independent. But,
they know about how
to run the company
and grow the assets of
the company.
They focus mainly on
the internal parts or
aspects of the
company. The main
focus holds on growth
strategy and also in
capital management.
They are mentioned at
the chairperson’s
report of the
company. Also, they
are found at the
balance sheet and
cash flows.
Stake holder
(Managerial Branch)
This branch is a
critical and technical
branch of
stakeholders. Majority
of them are
independent. They are
appointed mainly to
satisfy the most
powerful stakeholders
(Freeman, 2016).
This branch of stake
holders only focuses
on the needs of the
most powerful
stakeholders.
Managerial branch of
stakeholders are
mentioned in the
voluntary disclosures
of the company.
Stakeholder (Ethical
Branch)
This branch reflects
mainly the
independent
stakeholders. They
show the diversity of
the stakeholders.
The ethical branch of
the stake holders
focuses on each and
every stake holders of
the company. The
focuses on the stake
holders’ management.
Ethical branch of
stake holders are
mentioned at the
voluntary disclosures
of the company and
also in the CSR
reports. Corporate
Social Responsibility
are the part of a
company. And the
ethical stakeholder

branch helps a lot in
this.
Resources Having mixed skill in
the board is important
(Knopman & Berg,
2017). So, in order to
keep the mixes types
of directors, in the
board, the Charter
Hall Long WALE
REIT has appointed
both of the
independent and non
independent directors
in 1 : 1 ratio.
There are various
types of external
factors which are
needed to be focused.
Such as - flow
management of
resources (Kimber &
Lipton, 2015), capital
management etc.
Also, focusing on the
previous resources is
a part of them.
Communication of
these depends on what
is best needed to
secure the resources
for the company
(Hopkins, 2016). In
this case Charter Hall
Long WALE REIT.
Interpretation of communications of Charter Hall Long WALE REIT by using Legitimacy
Theory
Legitimacy theory is a theory which implies and support that an organization is under
development and improvement. It helps in developing voluntary social skills and social
contracts. This theory is closely connected to the stakeholder theory. Any board of of any
company wants to be feeling ‘legitimate’ in the society. The legitimacy of a company is
determined by the society and not by the company. So, in order to gain the legitimacy in the
society, the company (here, the Charter Hall Long WALE REIT) needs to work for and with the
company, and not against the society. Legitimacy has a positive side of its own, which helps the
society to earn and grow in a positive way. This happens because the society wants to deal with
the legitimate companies more.
In order to communicate with the society, disclosures are important. So, the board of the
company needs to take steps in order to make sure that the society considers them as a legitimate
company (Kolk, 2018). Disclosures are a form of communication with the society. A public

disclosure of a company shows its transparency and also it discloses about itself and the
activities of itself. So, it helps the society in realizing about the company and its purpose and
doings (Davies, 2016).
As for this company Charter Hall Long WALE REIT, they can include a few things like
investable land; rehabilitate land where the company has ceased recently, corporate social
activities etc. in their disclosures (McNutt, Demidenko & McNutt, 2015). Public disclosures can
be made in number of ways. These disclosures can be disclosed in company websites, annual
reports, or social medias etc. Also, the news or press media can be used in the disclosures of the
activities of the company.
Stakeholders are the most important part of a company. Stakeholders include almost everyone
related to the company, such as – employees, employers, suppliers, customers or consumers,
debtors, creditors, investors etc. (Priem et al,. 2019). As this is a real estate company, so Charter
Hall Long WALE REIT deals with various types of clients in daily basis. In order to keep the
smooth running of the company, maintaining a basic ethical support is important.
Legitimacy is depends on the mentality and trust of the stakeholders. In order to earn the trust of
the stakeholders, the most important factor for a company is transparency (Lins, Servaes &
Tamayo, 2017). It helps in building trust and confidence in the stakeholder’s minds(Deegan,
2019). After that, the feeling of legitimacy comes along.
Conclusion
It has been concluded that corporate governance within the organization, Charter Hall Long
WALE REIT are ranging from the narrow to the board which are mainly defining the
relationship in between the stakeholders and the agent who are working for the firm. It has been
found that a regulatory approach has been taken for one of the quasi-mandatory systems. The
board orientation is mainly looking after the stakeholders who are mainly independent and most
of the products and the information are installed the shareholders. The majority of the
shareholders are found to be non-independent and they know the ways to run a company. They
are mostly responsible for growing the assets within the organization, Charter Hall Long WALE
REIT. It has also been indentified that most of the shareholders are independent and they are it is

found that they are the powerful shareholders. With the help of the independent as well as the
non-independent shareholders an important as well as secured resources are adopted. It can be
concluded that the agencies are focusing on most of the shareholders and they ate successful in
satisfying most of the stakeholders by the orientations. They are practicing the transparency
principles which are helpful in protecting the right of the stakeholders who are attached with the
organization, Charter Hall Long WALE REIT. This principle is also having a positive impact on
the investment decision of the organization.

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