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BLO 2205 Assignment on Corporate Law- Risk Management

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VICTORIA UNIVERSITY

   

BLO 2205 Corporate Law (BLO 2205)

   

Added on  2020-02-19

BLO 2205 Assignment on Corporate Law- Risk Management

   

VICTORIA UNIVERSITY

   

BLO 2205 Corporate Law (BLO 2205)

   Added on 2020-02-19

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Running head: RISK MANAGEMENTRisk ManagementName of the studentName of the universityAuthor note
BLO 2205 Assignment on Corporate Law- Risk Management_1
1RISK MANAGEMENTa)It is the said duty of the board of directors involved in the all the Listed companies toidentify risk and take proper measure to deal with them, says ‘Principle 7 of the AustralianSecurity and Investment Commission’1. If the stringent measures are not taken when required,the company and its Stockholders, creditors, consumers and even the society might suffer fromadversity.2 It is so recommended by the ASIC (Australian Security and Investment Commission)that all the listed organization’s board should have a separate committee with the sole purpose ofRisk Management in mind3. It is further stated that the committee must have at least threedirectors controlling its proceedings. Not only that, but, the Principal 7 also makes it very clearthe the risk management has to be revised by the board of the company or at least, the committeeat least once a year with the safety of the company in mind insuring that the process of review iskept at full disclosure to enable proper accountability. It is the said duty of the organization tonot only reveal the internal audit of the entity with accordance to the structural role but also thefull disclosure of its part in any social, environmental and economic risks and state how theserisks are to be managed in the near future. In similar circumstances, it was seen that thecompany, Ardent Leisure Ltd (Ardent) suffered substantial financial harm in relation to theDreamworld leisure Park, property of the Queensland Gold Coast4. This occurred due totechnical failures in the particular ride which then lead to the unexpected death of a few patrons.Though accidents can never be foreseen and are beyond the control of man, they can be avoidedwhen taken certain measures which may not stop them, but are sure to minimize the chances of1 Harris, J. Hargovan, A. Adams, M., Australian Corporate Law LexisNexis Butterworths 5th edition, 20152Council, ASX Corporate Governance, and A. S. Exchange. "Corporate governance principles and recommendations . ASX Corporate Governance Council." (2014).3 Austin R.P. & Ramsay, I., Ford's Principles of Corporations Law, Butterworths, Australia, 16th edition, 2014.4 Baxt, R., and Fletcher, K.L., Fridman, S., Corporations and Associations Cases and Materials on, Butterworths, Australia, 10th edition, 2008
BLO 2205 Assignment on Corporate Law- Risk Management_2
2RISK MANAGEMENTthem happening any time soon. In this particular incident, it was further seen that QueenslandGold Coast had taken little to no precautionary measures and was criticized for not being able todo proper risk management in the first place. The owner is held liable to undertake fullresponsibility done to anyone who was harmed due to any certain instances related to the placewhatsoever5. So, in this case as well, it was the company to be blamed. If the risk managementmeasures were taken beforehand, the said company might have had avoided the accident to beginwith. Even if the accident might have taken place after taking the said precautionary measures, itcan very well be stated that the damage might have been comparatively lesser. Thus, this casecan be seen as prime example of how the society is at constant harm if a company fails to makeproper Risk Management schemes so as to minimize the occurrence of any further accidentswhich lead to mass harm and civilian casualties.b)The Principal 7 of ‘Good Corporate Governance Recommendations’ imposes anobligation on the listed companies to identify and manage risk according to a proper set ofManagement frameworks with respect to the provisions mentioned in the former section of thisassignment.6 As mentioned before, the principle further highlights the organizing of morecommittees within the Company who will deal with any risk involved. Considering the adversityof the circumstances Dreamworld was in, it needed a crisis management team which wouldcritically examine the damage and make arrangements to deal with them and minimize its to thebest of their individual abilities. The Principal 7 had further stated the full disclosure of anysocial, economical, environmental and any other kind risk all together. Such measures if taken by5 Redmond, P., Companies and Securities Law - Commentary and Materials, Law Book Co., Sydney, 5th,2009.6Tricker, RI Bob, and Robert Ian Tricker. Corporate governance: Principles, policies, and practices. Oxford University Press, USA, 2015
BLO 2205 Assignment on Corporate Law- Risk Management_3

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