Ethics and Governance in Propertylink Group Limited

The report outlines the importance of ethics and good governance to the company and the society at large. The position of Property link Group Limited in the community and how it distributes its income amongst the shareholders are also outlined in the report.

Running Head: ETHICS AND GOVERNANCE 1
Ethics and Governance
Student’s Name
Institution Affiliation

ETHICS AND GOVERNANCE 2
Ethics and Governance
Executive summary
The report outlines the importance of ethics and good governance to the company and
the society at large. The position of Property link Group Limited in the community and how
it distributes its income amongst the shareholders are also outlined in the report. The
remuneration and benefits of the board of directors are also highlighted. The scope of the
report revolves around the income of the Property link Company, the expenses of the
company, and the objectives and strategy of the company. The company is focused on
utilizing the wealth of the shareholders in a manner that it brings large profit margins. The
company has a strategy on investment in industrial properties, enhance the growth of assets
and maintaining a reasonable capital structure. The primary goal of the company is to
security holders with superior risk-adjusted returns from Australia industrial and office real
estate.
The Board of directors chaired by, Peter Lancken has the mandate to ensure that
Property link Group Limited works smoothly. It has seven directors, whom Five of them are
non- executive directors while two of them are executive directors. The two executive
directors are involved in the day to day activities of the company. The company's financial
year ends on 30 June of every year. The company prepares the statements of comprehensive
income and that of financial position as at 30 June 2018. The report shows the expenses of
the company against the revenue associated with Propertylink Limited. The report shows
some theories applied by Propertylink in the realization of its objectives. The agency theory
and Kant's deontological theory is used by Propertylink Company to uphold ethics and
governance.

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Introduction
Property link Group is a large corporation in Australia, and it is one of the largest
companies formed in the year 2016. Property link Group consists of three branches in one,
that is Property link Holdings Limited (PHL), Property link trust (PT), and Property link
Australian Industrial Partnership (PAIP). In the year 2016, shares in Property link holdings
and Property link trust were merged into one. The Property link Investment Management
Limited is the responsible entity that is in charge of managing the property link group. The
units in Property link trust and Property link Australian industrial partnership cannot be
treated as separate entities. They all form the shares in Property Link Group and can only be
traded as one. This company deals in Australian industrial and office real estate.
The report of property link Group shows how the management have interlinked the
objective of the company regarding ethics and governance. The company's primary purpose
is to provide to the investors the external funds from the office of real estate. The strong
corporate governance which upholds the attainment of strategic goals is very crucial to the
success of Property link. The Stakeholder theory, agency theory, and the stewardship theory
were used by the administration of Property link to develop objectives which are in line with
ethics and governance. The stakeholder theory allowed the management of the company to
have a strong relationship with the employees and the suppliers. The network of associations
with numerous gatherings can influence necessary leadership forms and decision making in
the company. The stakeholder theory focuses on the administration decision making and
foresees that all the interests of the shareholders are put into consideration (Soltani &
Maupeti, 2015).
The stewardship theory as proposed by Donaldson (1997) focuses on how the
stewards utilize shareholders wealth through proper organization performance. The top

ETHICS AND GOVERNANCE 4
management, as the stewards, works on behalf of the shareholders and should integrate their
objectives as part of the company Glinkowska & Kaczmarek, 2015). The Agency theory, on
the other hand, is an economic theory. The relationship between the stakeholders and the
agents (top management) shows that there is a difference between ownership and control of
the company. The agents are hired to work on behalf of the shareholders in running the
company. In this case, the owners of the company should not be involved directly in the
control of the company because it can bring about a conflict of interest. The agent should
focus on projects that bring high profits and earn a fixed income without any incentive
component.
The essential outcome of this research is the focus on proper utilization of
stakeholder's wealth. The top management of the property link group should not use their
position for individual benefit. A manager with outstanding ethics and good governance will
ensure effective utilization of capital for the interest of shareholders (Arjoon, 2000). The
report gives an insight on how the wealth is distributed and the process of formulating the
objectives of the company. The goals of the property link group give shows how the top
management works in line with the wants of the stakeholders. The report is useful to the
auditors when checking the financial statements of the company (Hilgartner & Hurlbut, 2017)
The Corporate Governance at Propertylink Group
The board of directors of Propertylink Group is chaired by Peter Lancken, who is an
independent director. He chairs the board of directors, but he is not involved in the company's
day to day activities. Stuart Dawes is the company's managing director and also a member of
the board of governors. Ian Hutchinson, Sarah Kenny, Cristopher Ryan, and Anthony Ryan
are members of the committee who also are non-executive Director. Stephen Day is an
executive director, and he is the member of the board as well as the member of the executive

ETHICS AND GOVERNANCE 5
team. The non-executive director is an independent director, Propertylink board of directors
have five Non-executive directors and only two executive directors. Only two members of the
committee are involved in the day-to-day running of the Propertylink Company (Rush
&Carpenter, 2017).
The chairperson, Mr Peter Lancken, is very positive about the growth of the company.
The investor demand is very high, and when this is added to the strategies set by the board on
the market trends, the company will be in an excellent position to do profitable business. The
urbanization and e-commerce have brought in new investment which when added with the
current financing will bring huge profits (Solomon, 1992). The chairperson praised the
position of their industrial portfolio because they are well positioned to urban areas, e.g.,
Sydney where the demand is very high. The strength to do business within our existing assets
is the most significant part in the currency markets because of stiff asset pricing. The
Propertylink Group is proud to own $800 million worth of assets. The chief executive officer
also commented on the skilled and professional set of employees they have. On behalf of the
board and the top management, we thank everyone for their contribution and hard work
throughout the year.
The remuneration of the board of directors and the executive is well stated and
designed to help in building the strategic objectives. The remuneration policy of Propertylink
is developed by Propertylink board and the remuneration and nomination committee. The
immediate priorities of the organization are the setting up of a solar plant in the industrial
portfolio. The company is focusing on how to utilize water and energy efficiency without
wastage. The board of directors has put in place measures and policies to implement the
setting up of the solar plant to help in saving of energy. The company realized that it lost a lot
of money due to wastage of resources, the executive members formulated policies on how to
utilize water and energy without wastage.

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This are the securities of all the directors of Propertylink as at 30 June 2018
The key management personnel covered by this report considers that the current
framework should provide a balance between fixed and variable remuneration components.
The board considers the feedback that is received from investors and other company
stakeholders and reviews the appropriateness of the Propertylink remuneration framework on
the ongoing basis.
Executive
KMP
Fixed
remuneration
Increase/decrease Fixed
remuneration
Percentage
change
Stuart Dawes 550,000 75,000 625,000 14%
Stephen Day 525,000 139,125 385,875 27%
Peter
McDonald
525,000 25,000 550,000 5%
Tony Groth 240,000 60,000 300,000 25%
Total 1,840,000 20,875 1,860,875
Directors Securities
Peter Lancken 1,881,892
Stuart Dawes 3,750,593
Stephen Day 6,066,052
Ian Hutchinson 72,191
Sarah Kenny -
Anthony Ryan 499,719
Cristopher Ryan 1,006,499
Total 13,276,946

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Board Orientation
Board orientation refers to a process for helping new directors contribute fully, and as
early in their tenure as possible, to the governing work of the board. The Propertylink orient
the board members during the regular meetings. However, the board members might choose
to go for a retreat to guide and welcome the new members into the company. The discussion
might include the objectives of the organisation and who should lead the process and how an
orientation program might be structured. Board orientation is not just about the transfer of
information the guide of how to work as a director. As a result of their orientation, new
directors will understand their roles and responsibilities in the office. The new members are
made aware of the goals and objective of the company. They are also made aware of the main
stakeholders of the organisation and how the decision are made in the company. On 30 June
2017 Peter McDonald and Derek Nix resigned from the board of directors and paved way for
Sarah Kenny who was appointed as the new member of the board. The orientation of Sarah
was done during the regular meetings held by the board.
The decisions of the board of directors and their focus determines the future of a
company. The board with shareholder-centred governance provides a platform to base their
proposals on the individual property rights paradigm. As the owners and givers of the capital,
shareholders always prefer to showcase their interests over those of the stakeholders. It is
contended that as the sole owners of the company, shareholders should hold the top
administration accountable to the primary objective of maximizing shareholder wealth
(Gotsis & Grimani, 2015). The shareholder corporate governance is there to provide
maximum profits to the owners of the company. The Propertylink Group boards have focused
primarily on benefiting the shareholders by making all the necessary adjustment to ensure
maximum profits to the shareholders. As per the agency theory, shareholders employ the
boards of directors to work as their agents and allow the smooth running of the organization.

ETHICS AND GOVERNANCE 8
The directors are expected to work on behalf of the shareholders (Bosse &Phillips, 2016).
The chairman of the board gave a direction on how the company will realize its primary
objective.
The most recent report was for the financial year 2018 which ended on 30 June 2018.
The income rose from $87,123 million to $142,839 million, and this is such a vast
improvement from the financial year 2017. The total comprehensive income is as a result of
quality management and strong leadership of the board. The shared profit was $19.8 million
compared to $8.5 million of the previous years. The strategic board decision on how to
conduct their business has paid off. Following this great achievement, the board will have a
big challenge when formulating the objectives for the financial year 2019. The returns for the
fiscal year 2019 should not come below the profits for the year 2018. The chairman of the
board, Peter Lancken, has promised to improve the current financial position of Propertylink
Group to a higher level. Mr. Peter wants to implement the use of good and quality
governance in attaining the goals of the fiscal year 2019.
The Kant's deontological theory states the objectives of ethical standards which
should be upheld and respected by everyone. The actions of an individual should not be
influenced by their instincts or their personal needs but rather what the society expects from
them. The ethical focus should come from the degree of ethical behavior and the need to give
back to the organization (Shi & Connelly, 2017). The board of directors recognized the
importance of the community and decided to set up several charities that give back to the
disadvantaged people in the society. For example, Stephen Day, the executive director is a
cricket player and have supported the use of cricket to funds for schools and the needy in the
society. He supports the use of sports in raising funds to help the less fortunate in the
community.

ETHICS AND GOVERNANCE 9
Batting for change is another organization associated with Propertylink which helps
the needy in the society and empower women through education. The Aristotle's virtue theory
states that integrity of person's character depends on ethical behaviour (Hutchinson, 2015).
The conduct of a board member should be in a manner that it upholds the integrity of the
office he holds. Aristotle's virtue theory is applied in the Propertylink Group by the board
members who chose to help people in the society rather than enriching themselves.
Propertylink limited is a primary partner that help batting for change raise money for young
women in Sri Lanka and India. Bear Cottage children's Hospice is another prime beneficiary
of the Propertylink generosity. The employees spent a day cleaning and hanging out with the
families in need. The children received food, clothes, and funds form the Propertylink limited
(Heinaman, 2018).
The strategy of the board is very clear and focuses on benefiting the shareholders as
well as the community. The main focus of the board is on investment. The board has
strategized in a manner that they invest in industrial properties that will bring stable income
and raising capital growth (Holllerer & Hwang 2016). The board has set the objectives in line
with global institutional investors. Another strategy is enhancing the growth of assets.
Repositioning of assets, capital expenditure and the expansion of existing funds will position
Propertylink on a global platform. The last strategy is maintaining the balance sheet and
external funds which ranges between 30% and 40%. The board has strategized to allow ethics
and good governance with the achievement of shareholders’ interests.
In conclusion, the board orientation determines the future of the Propertylink Limited.
When the board focuses on investment, enhancing the growth of assets and maintaining the
same capital expenditure will bring about the success of the company. The implementation of
agency theory, makes the board realize that the interest of the shareholder is put in the
priority (Pepper &Gore, 2015). The board should establish clear goals and objectives which

ETHICS AND GOVERNANCE 10
focuses on utilizing the wealth of the shareholders. Kant's deontological theory allows the
board to focus on giving the services to the community. The society is an essential part of
Propertylink limited, and the organization offers the tenants, customers, and partners.
Therefore, the community is an integral part of Propertylink and as the director, Stephen Day
helps in raising funds for the community by using cricket.
Legitimacy Theory
Legitimacy theory shows that there is a contract between the company and the
society. The legitimacy theory assumes that the activities or action of an individual is
desirable and useful within the community. This theory explains further the role of the
individuals and organizations in providing services to the society (Zhang &Zhu, 2018). The
beliefs and norms of the society should be upheld in the conduct of the company, how the
public perceives an organization should be reported in a manner conforming to the
community requirements. The society provides labour, transport infrastructure and other
natural resources required by the company, and in return, the company produces products and
services needed by the community (David & Chari, 2017).
In Propertylink Company Limited, the legitimacy theory has been well integrated into
the company's objectives. For example, Propertylink Limited is a significant contributor to St
Edmunds College, which is a school for the disabled. The school has helped children with
autism, sensory impairment among others. The actions of Propertylink Limited towards
helping the needy in the society keeps them in an excellent position to do their business in the
community. The members of the society are pleased with the work of Propertylink, and
therefore they will become loyal customers. Propertylink have created a good reputation in its
community by providing help and promoting education for the needy. Using the social and

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environmental reports, the company can be able to measure itself and the legitimacy of its
operation.
According to Khan (2017), legitimacy theory has helped companies to be regulatory
compliant. By offering quality services to the society, the company becomes compliant with
the norms and beliefs of that society. Propertylink Limited have gain market benefits from
the reputation of social and environmental reports. It worked with Bushlink group with
Landcare Australia in cleaning Sydney's beach environment. By doing so, Propertylink gain
popularity in environment protection. Propertylink can gain an added advantage over its
competitors due to the reputation it earned on the services offered to the community.
Companies who do not uphold their social and environmental responsibility will not do well
and might lose customers to their competitors. It is recommended that companies should keep
good ethics and governance that helps in maintaining a healthy relationship with the society
(Van, 2014).
Conclusion
To sum up, it is evident that ethics and governance play an essential role in the
success of the company. For the case of Propertylink Group, the board has put great emphasis
on the implementation of legitimacy theory on ethics and governance. Kant's deontological
theory suggests that everyone in service to the society should uphold ethical codes. Kant's
philosophy is implemented by the executive director, Mr. Stephen Day, who has put
considerable work in support of the community by using cricket. When playing cricket, they
help raise funds for the needy students and disadvantaged women in the society. The
shareholder-centered interest is implemented, followed by the societal needs. The primary
objective of Propertylink Company is to provide security holders and investors in our

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external funds with superior risk-adjusted returns from Australian industrial and office real
estate.

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