Corporate Governance Structure and Principles of Medibank Pty Ltd

Running head: REPORT 0
CORPORATE LAW
SEPTEMBER 5, 2018

REPORT 1
Introduction-
The corporate governance structure is most important feature of any business affairs as it
helps in identifying issues, challenges, and problems. It also permits the company to repay to
the all the shareholders of the corporation and the communities. The corporate responsibility,
ethics, corporate governance structure and corporate governance principles not only help
sustaining a great faithful customer foundation, but are also significant for long term
development, future progress and attainment. These activities support the within relationships
with the workers of company.
The good corporate governance is not only restricted to the proper environmental practices,
but it develops to arrange overall values of corporation with the objects of clients, workers,
investors, dealers, supervisor and the common people. In this report, various aspects of the
corporate governance structure, principle of corporate governance structure and strategies of
corporate governance structure of Medibank Pvt Ltd. is discussed and critically examined.
Company background-
In Australia, Medibank Pty Ltd is a top private health insurer. The main business of
Medibank Pty Ltd is Health Insurance. It underwrites and allocates poliies of private health
insurance in respect of two brands, Medibank and ahm. Medibank has a group of related
businesses, which is called as Medibank Health. Previously, it was considered as
complementary Services. Medibank Health leverages experience of Medibank and capability
to render and organize services related to health, and sustain the business of Health Insurance.
As Medibank Pty Ltd keeps assets to assure its regulatory reserves, it may also produce
important asset income from its collection of investment assets1.
1 Neubauer F, and Lank A, The family business: Its governance for sustainability (Springer 2017)

REPORT 2
The corporate Governance Principles and Recommendations for Medibank-
Principle 1: According to first principle, the structure of the company must be deigned to
make able the board of company to render strategic directions for corporation and the
management. The framework of company should make sure the balance of authority2.
Principle 2: According to this principle, the company must have board of proper composition
and size. It is recommended that the majority of board of company should contain
independent directors. There should not be same person for the post of CEO and chair. The
nomination committee should be established by board of company3.
Principle 3: As per this principle, the corporations must encourage ethical decision-making
and responsible decision-making. It is recommended to make code of conduct. The company
should reveal the codes to develop faith in the integrity of company and to enforce the
responsibility of individual for making report and evaluating report of immoral practices. It is
also recommended that company should make the policies related to diversity. It is also
required by the company to disclose the proposition of women in annual report.
Principle 4: It is stated by this principle that the framework of the company should justify and
secure the integrity of financial reporting. The board should establish audit committee. There
should be formal charter of audit committee.
Principle 5: According to this principle, the corporation should promote the disclosure on the
time. The company should make written policies to make sure the compliance with
requirements of ASX principles. The written policies should ensure responsibility at level of
senior executive for that compliance4.
2 Jacoby S, The embedded corporation: Corporate governance and employment relations in Japan and the
United States (Princeton University Press 2018)
3 Meagher G, and Goodwin S, About the contributors and end pages (Sydney University Press 2017)
4 Claudio F, de Rijke K, and Page A, ‘The CSG arena: a critical review of unconventional gas developments and
best-practice health impact assessment in Queensland, Australia’ [2018] Impact assessment and project
appraisal 105

REPORT 3
Principle 6: This principle states that the corporation should respect the shareholder’s rights.
The company should exercise these rights properly. It is recommended to the company to
develop the communication policy for encouraging proper communication with shareholders.
The company should encourage the involvement in the general meetings of company.
Principle 7: this principle states that the company should develop the sound system of risk
oversight, administration, and internal control. It is recommended that the board of company
should disclose the management has reported to it as to effectiveness of management of
company of major business risk5.
Principle 8: the company should make sure that the level and arrangement of remuneration is
proper and sufficient to establish the clear relationship. It is recommended to a company to
establish remuneration committee. The remuneration committee should be framed by
majority of independent directors. It should be chaired by independent chair. It is also
recommended to the company to make differences between remuneration of executive
directors and remuneration of non-executive directors6.
Medibank is committed to report ASX corporate governance principles and best practice
recommendations. During year 2017, Medibank continued to comply with ASX guidelines.
However, principle 5 ‘make ASX listing rules disclosures timely’ is not applicable to unlisted
GBE such as Medibank Pvt Ltd. In according with Board policy, MD and CEO give a self-
assessment sign-off in respect of the controls and actions of corporation. This procedure
supports the written certification of MD and CEO to the board under ASX Guideline
Recommendations7.
5 McKay R., Kaur M., Vickers B, Lavranos E, and Liggins J, ‘combined symposium abstracts’ [2018]
Australian & New Zealand 52.
6 Canaway R, Bismark M, Dunt D, and Kelaher M, ‘Medical directors’ perspectives on strengthening hospital
quality and safety’ [2017] Journal of health organization and management 696.
7 Du Plessis J, Hargovan A, and Harris J, 2Principles of contemporary corporate governance (Cambridge
University Press 2018)