Sonic Healthcare: Corporate Governance, Risk Management, and CSR

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SONIC HEALTHCARE
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Sonic Healthcare
Executive Summary
Sonic Healthcare has been successful in providing health to people through the laboratory
services. Since it establishment, the company has developed a culture that promotes corporate
governance and corporate social responsibility. The Sonic Healthcare has effective structure that
has competent and skillful board of directors that has made the company to become sustainable.
The company has successfully managed risks, especially financial risks that have allowed the
company to be successful. Despite the challenges that the company faces, its corporate social
responsibility in education and health has enabled it to help the unfortunate members in the
community where it has operations. The strong corporate social responsibility practices have
made the company to be acknowledged as ethical and sustainable business that promotes the
interests of the disadvantaged communities where it operates. The paper will examine the
corporate governance and management or risks and corporate social responsibility of Sonia
Healthcare.

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Introduction
Sonic Healthcare is an Australian firm, which offers laboratory, radiology, and pathology
services in many countries across the world. Sonic Healthcare has been a successful healthcare
provider that has relied on its effective corporate governance. The company’s success story
began in 1992 when a Michael Boyd purchased a struggling small firm for few dollars per share
(Grünig, Kühn & Montani, 2018, pp. 57) . The firm divested its other interests and for the last
two decades, it has built a colossal international empire across the United States, Europe,
Australia, New Zealand and Asia. It constantly exceeds its encouraging financial results. The
company has expanded its growth prospects and diversified its revenue base with its moves
offshore form Australia. In 2016, the company’s revenues were estimated at 60 per cent that
were generated from business activities outside Australia (Urban, 2012, pp. 1).
Corporate Governance
The Sonic Healthcare board of directors is carries on to place great significance on the
governance of the firm that it considers to be critical to its wellbeing and achievement of the
goals. There are two main aspects for the governance of firms: conformance and performance
that plays a primary role in the success of the business. The company’s board and management
are dedicated to governance that acknowledges that all elements of the Group’s operations are
carried out responsibly, ethically, plus with the greatest standards of integrity.
Structure of the Board of Directors
The board of directors is comprised of individuals experienced in public corporation
management along with the leadership. The composition of board of directors is reliable with the

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standard of medical management and stewardship that has been the primary approach of the
company since 1993. The company had directors that have different skills that include medical,
legal, financial, management and corporate expertise (In Crowther & In Seifi, 2017, pp. 75). The
present board comprises four independent directors (comprising the Chairman) whom is a
General Medical Practitioner (GMP), plus three executive directors that include a radiologist
besides a pathologist. Mark Compton is non-executive, independent director appointed in 2014,
Christopher Wilks is a finance director and executive director, Colin Goldschmidt is the chief
executive officer and managing director and Philip Dubois is the executive director appointed in
2001 of Sonic Healthcare. The company’s federation model is a corporate structure that has
enabled its businesses to operate decentralized that reinforces the identity in addition to
management sovereignty of each local operation (Kidman & Feher, 2009, pp. 38). The effective
board has made the company to resolve many issues that could easily affect its reputation in the
healthcare sector. The board has further enabled the company acquire many business and expand
its operations in the global world.
Compensation Package
Sonic Healthcare has two compensations plans where equity-based remunerations may be
provided, the Employee Option Plan ad the Sonic Healthcare Performance Rights Plan. The
individual grants based on either plan can be subject to extra additional vesting conditions
determined by the board of directors in the company. The average Sonic Healthcare executive
compensation is £237,000 annually and the median compensation that the company pays that
include the basic salary and bonus is £235,000. The most compensated executive makes around
£700,000 yearly and the lowest compensated makes about £50,000 annually. The Sonic