Kidman Resources Limited

This report provides an overview of Kidman Resources Limited, a company that deals with acquiring, operating, and developing mines for lithium. It discusses recent changes, including a proposal from Westfarmers, and analyzes board orientation and corporate governance practices. The report also explores the application of legitimacy theory in communication at Kidman Resource Ltd.

Running head: KIDMAN RESOUTRCES LIMITED
Kidman Resources Limited
Student name:
Student ID:
Institution name:
Unit name:
Unit code:

Kidman Resources Limited 2
Executive Summary
Kidman Resource is a company that deals with acquiring, operating and developing mines for
lithium. In the recent past, the company has received significant changes including a proposal
from Westfarmers to take up the company at a price of 776 million US dollars. This report is
meant to provide an overview of Kidman Resource Ltd and also provide some of the recent
information concerning the operations of the company. The report will also analyze how board
orientation is done in the company and the theories that support board orientation. The
application of legitimate theory that facilitate legit communication from the company to its key
stakeholder will also be discussed.

Kidman Resources Limited 3
Introduction
Kidman company is a public company that was established by Martin Donohue in 2009. The
company is situated in Melbourne headquarters which is in Virgin Island, Australia. The
company goals include acquiring, operating and developing mines for lithium. The company
owns other business in other Parts of Australia that is; in Northern territory, New South Wales
and Western part of Australia. The companies also engage in exploring and developing both base
and precious metal deposits. Fifty percent of the Mt Holland project is owned by Kidman
Resources Limited and this project deals with exploring and drilling resources to keep the
company in the active mode.
Currently, the company is reported to have various competitors in the markets. The most top
competitors for the company are Caledonia mining, Avocet Mining and Thor mining. All the
competitors of the company deals with gold mining and they earn very high revenues from their
business as compared to the revenue that is earned by Kidman Resource Company. Kidman
Resource limited has specialized in diversified metals and mining and precious metals and
minerals. Also, the company has about 64 employees who are assigned to different duties that
are meant to assist the company in achieving its goals. Kidman company takes position nine out
of ten when ranked with its market competitors. Their overall revenue when compared with its
top market rival is less than one million US dollars.
The growth and development of Kidman Company has greatly brought vast benefits to the
economy of Australia. Unemployment issues have been solved and its contributions through
gross domestic product has led to the growth of the Australian country. In 2019 May, the
company is reported to have received a proposal from Wesfarmers Company Limited.
Westfarmers company is among the private companies in Australia that provide its services to
Australian farmers (Provasnek, et al., 2018). They are intending to inherit Kidman Resource
limited at a cost of about 776 million of the Australian dollars. Both the directors and
shareholders of Kidman Resources Limited have pledged their support for the proposal towards
the transfer of the company to Westfarmers. During the financial year of June 2018, Kidman
company did not make any payments nor recommendations for dividend to their key
stakeholders.

Kidman Resources Limited 4
They also recorded a big loss in its finances due to increased corporate expenses and for
employee benefits. The negative outflows also contributed to its losses during the financial year
of 2018 that is reported during the month of June.
Corporate governance at Kidman Limited
Corporate governance refers to processes and procedures that a company and its workforce
follows in line with fulfilling the set objective of an organizations. Each company has its own
rules and regulations that provide guidance to all activities that are undertaken in that particular
organization. The board of directors facilitate the corporate governance in any organization. It is
their responsibility to maintain working integrity, transparency and accountability in the
company (Basu et al., 2015). At Kidman Resource limited, there are about ten managers who
make up the board of directors. Among the board of directors, some are executive directors, non-
executive directors and other are independent non-executives.
The ratio for the insiders and independent directors is 1: 9. The chief executive of the company is
an executive director who belongs to the dependent category of the director’s board. The
chairperson of the board of directors is an insider. The insiders include the major founders,
executives and key stakeholders of the company who have powers to lead other members of the
company. Independent members of the board members are in charge of aligning interests of
stakeholders together with those of the insiders to ensure that all the board members are working
towards the set goals if the company (Dube, & Maroun, 2017). The chairperson of the company
is John Pizzy and Martin Donohue is the chief executive in the company. The board of directors
has vast experience and different knowledge in different disciplines that strengthen them to
realize the company goals.
During meetings for instance AGMs, the chairman and the CEO of the company provides reports
concerning the progress of the company in the long run. According to Andrews, (2017), reports
that were provided by the chairman of the company was that, there were to be significant
changes on the calendar with regard to financial reporting times such that the reporting period
should be in line with that of the SQM who are their partners at Mt Holland Company. This is to
facilitate better accountability for the revenues earned from their combined business. Financial
statements that are produced at the same period will enable the two companies to plan for their

Kidman Resources Limited 5
business operations in the most effective and efficient way. The chairman also provided a report
concerning the settlement of the losses that occurred due to the actions of the workforce of the
Kidman Resource Limited during the AGM. Such actions are mainly caused by ignorance of
certain actions that does not comply to the set standards of the state or the company itself. The
settling of the forfeiture will enable the company to run its operations without much frustrations
and fear of making losses from its business. The chairman and the CEO of the company also
makes updates the company stake holders concerning the proposal that Westfarmers have
towards their company (Campbell, 2017).
All the discussions that are made by the company executives are shared to the rest of the
company individuals via the chairman and the CEO of the company for the purpose of
transparency and accountability. The remunerations of the chairman and the CEO of the
company depends on the overall performance of the company. The remunerations also depend on
how other CEOs and directors of other companies in Australia are paid. There are some priorities
that the company is trying its best to achieve in the near future. The company is always
struggling to set up strategies that will ensure a better progress of their Lithium project at Mt
Holland (Wang, & Sarkis, 2017). They are trying to achieve this by increasing the prices for the
mineral resources at Holland in order to get additional capital for expanding their company.
Board orientation at Kidman Limited
Board orientation is defined as adopted strategies that are put into place to ensure that all the new
directors or management team contribute their efforts fully in their areas of work towards the
company goals (Beverland, & Lindgreen, 2016). Through board orientation, new directors are
able to decipher their responsibilities, identify the key stakeholders of the company in which they
will be working with so that they can collaborate in a coherent manner to achieve the company
goals. At Kidman Company, board members are grouped into different groups and they also
perform different functions that are meant to achieve the company goals.
To justify the responsibilities of each member of the board, Kidman Company has provided
written statements that provide sufficient roadmap for each roles of the board members (Helfaya,
& Moussa, 2017). The company has put into place a number of rules and regulations that
facilitate better management and adherence to the roles that are allocated to them. In addition to
the rules and regulations, certain principles are also highlighted to provide a better direction to

Kidman Resources Limited 6
the company performance among the management team. The board members have their rights of
refusing to comply with some principles that are proposed by the company since some of the
principles may be against their rights thus they have the right to deny them. To enable the
company board members to understand their daily duties, the company has provided a charter
with specific policies that provide guidance to the management team.
The charter for Kidman company has outlined powers and duties that both new and existing
board members must adopt so that the company can achieve its goals. Steward theory outlines
that the board members who are elected in the office have assigned duties that are outlined in
accordance with the protocol of all the directors (Glinkowska, & Kaczmarek, 2015). Once the
head of directors has identified their duties in the company, they are able to delegate other duties
to the senior directors who are below the hierarchy of the company. This function is supported
by the managerial board theory which argues that the head of the company has authority of
delegating duties to other people to ensure that the company performs in an effective and
efficient way. Once roles are delegated, the leaders are able to perform their duties including
analyzing their market trends and forecasting future risk and device methods that can be used to
prevent the negative effects of the risks to the company. This is very possible due to the
availability of diverse knowledge that the directors have from different disciplines.
Kidman Company also provides directions on how to nominate and appoint individuals that are
fit for director’s position. This idea enables the nominees to assess those vying for the director or
CEO seats before making sound decisions on whom they want to lead the company. The
company also has put into place written contacts that gives directors to lead the company for a
certain period of time. All the details related to the contracts are provided to all candidates so that
each and every individual in the company is able to read and understand the terms of the
contract. The written agreements prevent violation and breach of contract when individuals have
been granted the opportunity to lead the company for a period of time (Harrison et al., 2015). In
addition, various qualifications and the experience gained in various areas are also considered.
Individuals with vast experience are mostly considered to hold bigger positions in the company
since they are already aware of the functions that they will be assigned as compared to
individuals with little or no experience in the positions that they are vying for. When the above

Kidman Resources Limited 7
mentioned are followed and put into practice, the company will be able to always realize its
goals in the long run.
Kidman company also have policies that support diversity among the workforce of the company
(Cucari et al.,2018). It has rules that requires that the board members must consider both women
and male legible for any position in the company. There should be no gender disparity in
leadership and thus they have provided equal opportunities for all. Due to this policy, both
genders feel appreciated and strive hard to enable the company to reach their goals. The recent
statement of the company is that they are planning to increase the total numbers of women who
will equally participate in performing the board functions as male board members do. To ensure
that the company is per the objectives, the company has provided techniques for assessing the
performance of board members in a yearly basis. This assessment is meant to determine whether
all the participants in the company are working towards the company goals. The company has
provided some of the techniques that they use to assess their workforce (Sharma, & Shukla,
2015).
The identified technique for assessment is a questionnaire. The questionnaires are distributed
among the workers of Kidman Resource company and the feedback is analyzed to determine the
performance of each individual towards the set objectives. The analysis is reported to help the
company to obtain the required feedback and to put into place methods that can minimize the
obstacles that are in a position to hinder the employee direction towards the company goals.
Finally, remuneration is a great factor that enables all employees of an organization to work extra
hard towards the organization goals (Popli, & Rizvi, 2015). Payment of fixed sallies to employee
may make the workforce of an organization to lose the moral of working towards the
organization goals.
At Kidman Resource Limited, remunerations are made fair among the employees and the senior
directors. The senior directors are not paid on a fixed basis but instead, they are paid based on
the performance of the company during that financial year. An analysis of remunerations paid to
similar employees in their companies is determined and a fair pay is mad to the employees of the
company. This ignites the zeal of the employees to work towards the company goals since they
don’t feel exploited. This fact is supported by agency theory which argues that employees must
be monitored to ensure that they do not waste time on their own activities but the company work

Kidman Resources Limited 8
(Bosse, & Phillips, 2016). The company has also provided some limits to distinguish the senior
directors and the common employee. Providing a conducive environment is a guarantee to
realizing the company vison in the long run.
Legitimacy theory in the interpretation of communication at Kidman Resource Ltd
This are the methods that enable the company to implement the code of conduct among its
employees and the environment. The adopted methods must not violate the rights of individuals
and must also ensure sustainability of the environment in which the company is located for the
benefits of the future generations (Jia, & Tomasic, 2017). This theory provides an understanding
of how the company can operate in a manner that will attract and please its stakeholders and new
investors. At Kidman Resource ltd, they have established corporate communications that are
meant of benefit both the company, its workforce, stakeholder, and even the community at large.
The business operations that are undertaken by the company should not affect the normal lives of
the people in the community. Better communications in the company to enhance better relations
with both the internal and external environment can be achieved through application of training
and development forums. This will create awareness among individuals of the company to
understand how to promote better relations with the potential customers. Legitimacy theory also
stresses on the environmental sustainability (Elbra, 2017). The business activities of the company
should not pollute and harm the creatures in the environment. Thus the theory emphasizes on
maintaining better relationship with the company shareholders and ensure conservation of the
environment for the benefit of both the current and future generations. On the part of the
company, the corporate code of conduct has been adopted to for the purpose of maintaining
relationships. According to stakeholder theory, board members together with their employees are
urged to ensure that their actions within outside and internal environment does not offend their
stakeholders.
The company also have maintained interests and rights of their shareholders and key
stakeholders so as to maintain the positive company reputation among its competitors in the
market. The company also has the responsibility of sensitizing its key employees to maintain the
highest level of integrity while reporting financial reports. They must demonstrate honesty while
computing the accounts for the benefit of the company and its stakeholder (Andriof et al.,2017).
Finally, to maintain code of conduct, the company must put into place policies that will maintain

Kidman Resources Limited 9
better conduct of the company. Violations of the set code of conduct must attract severe
punishment that can cause a bigger loss to those who violate the laws. Thus, the application of
Legitimate theory in each organization will enable the organization to foster better relations
among its areas of operation and a positive reputation will be gained (Luger et al., 2015).
Positive reputation enables will enable the company to maintain and also attract its potential
customers and investors who will enable the company to expand to greater heights.
Reference list.
Andrews, M. (2017). Kidman outstands with SQM. Australia's Paydirt, 1(252), 12.
Andriof, J., Waddock, S., Husted, B., & Rahman, S. S. (2017). Unfolding stakeholder thinking:
theory, responsibility and engagement. Routledge.
Australia, P. (2018).
Basu, P. K., Hicks, J., Krivokapic-Skoko, B., & Sherley, C. (2015). Mining operations and
corporate social responsibility: A case study of a large gold mine in regional Australia. The
Extractive Industries and Society, 2(3), 531-539.
Beverland, M. B., & Lindgreen, A. (2016). Implementing Market Orientation in Industrial Firms:
A Multiple Case Study¿. In Market Orientation (pp. 59-82).
Bosse, D. A., & Phillips, R. A. (2016). Agency theory and bounded self-interest. Academy of
Management Review, 41(2), 276-297.
Campbell, J. (2017). Insights from the company monitor: Wesfarmers. Equity, 31(8), 16.
Cucari, N., Esposito De Falco, S., & Orlando, B. (2018). Diversity of board of directors and
environmental social governance: Evidence from Italian listed companies. Corporate Social
Responsibility and Environmental Management, 25(3), 250-266.
Dube, S., & Maroun, W. (2017). Corporate social responsibility reporting by South African
mining companies: Evidence of legitimacy theory. South African Journal of Business
Management, 48(1), 23-34.

Kidman Resources Limited 10
Elbra, A. (2017). Private Governance in the Gold Mining Sector. In Governing African Gold
Mining (pp. 105-137). Palgrave Macmillan, London.
Glinkowska, B., & Kaczmarek, B. (2015). Classical and modern concepts of corporate
governance (Stewardship Theory and Agency Theory). Management, 19(2), 84-92.
Harrison, J. S., Freeman, R. E., & Abreu, M. C. S. D. (2015). Stakeholder theory as an ethical
approach to effective management: Applying the theory to multiple contexts. Revista brasileira
de gestão de negócios, 17(55), 858-869.
Helfaya, A., & Moussa, T. (2017). Do board's corporate social responsibility strategy and
orientation influence environmental sustainability disclosure? UK evidence. Business Strategy
and the Environment.
Jia, X., & Tomasic, R. (2017). Economic Development, Resource Governance and Globalisation:
The Growth of China’s Resources Companies. In Resource Security and Governance (pp. 1-26).
Routledge.
Luger, J., Mammen, J., & Haleblian, J. (2015). Security Analaysts' Influence on Acquisition
Decisions: A Joint Agency and Legitimacy Theory Approach.
Mederer, A. (2019). Factors for Marketing Excellence.
Popli, S., & Rizvi, I. A. (2015). Exploring the relationship between service orientation, employee
engagement and perceived leadership style: a study of managers in the private service sector
organizations in India. Journal of Services Marketing, 29(1), 59-70.
Provasnek, A. K., Schmid, E., & Steiner, G. (2018). Stakeholder engagement: keeping business
legitimate in Austria’s natural mineral water bottling industry. Journal of Business
Ethics, 150(2), 467-484.
Sharma, J. K., & Shukla, S. (2015). Strategic HR orientation of companies in India: A content
analysis approach. Prabandhan: Indian Journal of Management, 8(7), 7-22. 26(8), 1061-1077.
Wang, Z., & Sarkis, J. (2017). Corporate social responsibility governance, outcomes, and
financial performance. Journal of Cleaner Production, 162, 1607-1616.