Corporate Governance Principles of ASX and its Application in FFA

Running head: MASTERS OF PROFESSIONAL ACCOUNTING
Masters of Professional Accounting
Name of the Student
Name of the University
Author’s Note

1MASTERS OF PROFESSIONAL ACCOUNTING
Table of Contents
Answer to Question 1.................................................................................................................2
Answer to Question 2.................................................................................................................3
Answer to Question 3.................................................................................................................5
References..................................................................................................................................8

2MASTERS OF PROFESSIONAL ACCOUNTING
Answer to Question 1
The Australian Securities Exchange (ASX) has provided the Australian listed
companies with certain principles and recommendations with the aim to implement robust
corporate governance mechanism within the business organizations; these principles are
laying solid foundation for management and oversight; correctly structure the board for
adding value; acing ethically and responsibly; safeguarding corporate reporting integrity;
making timely as well as balance disclosure; respecting the rights of security holders and
remunerating in fair and responsible manner. These are the eight corporate governance
principles of ASX (asx.com.au, 2019).
The second principle is vastly related to the case of FFA. According to the second
principle, a listed company must should have a board having correct size, composition, skills
and commitments for properly discussing their duties. This principles also states that a high
performing and effective board is required for effective governance in the listed companies. It
is also mentioned in the statement that board of a listed company must have sufficient size in
order to meet the requirements of the businesses. An appropriate size of board helps in
changing the board composition and committee without any disruption (Christensen et al.,
2015).
According to Recommendation 2.1 of this principle, the board of a listed company
must have a nomination committee that includes at least three members and majority of them
needs to be independent directors. At the same time, the Chairman of the Board must have an
independent director. It can be seen from the statement of Samantha Gabrielle that the Board
of FFA includes three non-executive directors (Tricker, 2015). The non-executive directors
are the directors who do not take part into the company’s daily business operations as the
responsibilities of them can be seen in the areas of organizational strategy and policymaking.
According to the 2.3 Recommendation of ASX Corporate Governance Principles, it is needed
for a listed entity to consider disclosing the name of the directors that the board considers to
be the independent directors. It can be seen from the provided information of FFA that the
company has not disclosed the names of the directors considered as independent directors as
they have only mentioned which are the non-executive directors (Appuhami & Bhuyan,
2015).
FFA has not mentioned which are the independent and non-independent directors in
their Board. It clearly indicates towards the fact that FFA has not complied with these two