This document discusses the important facts and key problems in corporate governance in Australia. It analyzes the issues of conflict of interest, gender equality, and communication between the board and management. It also provides solutions and recommendations for improving corporate governance.
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Surname1 Student’s name Professor’s name Subject Date
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Surname2 Relevant facts and key problems Following the case presented, the important facts include; violet ltd being a public listed entity or company that wants to raise its capital. The company trades under the name, Indigol. According to the plan, the need to open 10 more branches forms the rationale of need to raise additional capital. In addition, the board has adopted a market strategy of coming up with limited proprietary company. Analysis of two to five key problems Following the facts of the case, issues that exist in the company include: Mr. Peter acts as a chairman and as a Chief Executive Officer (CEO). This is a problem as it contributes to the issue of conflict of interest between balancing the duty of a chairperson vis a vis that of a CEO. In addition, there is a gender issue regarding the board’s composition, as it comprises a majority of male unlike females. This does not take into account the equality requirement as provided for by international laws.Further, the fact that Peter is playing two roles; it has raised the issue as to how the company is being run and managed(A.O., 2012). On the other hand, communication between the board and management has become of concern. The concern is that, they are not able to agree on how to properly manage the company. In addition, the issue regarding the appointment of directors is of concern to the company. Further, there is the issue of Peter using his position as an independent director for his own benefit. This has called for investigation by the regulator. The investigation will look into the issue of making profit from a company that has been established for non- profit purposes(Baxter, 2014).
Surname3 Solutions /changes Regarding the issue of Peter serving in both capacities, the management has to ensure that it appoints another person to take over one position so as to ensure that the interest of the company is promoted unlike those of individuals in the company. Subsequently, the issue of gender, the management has to ensure that the gender issue is taken into account. This can be done by appointing more women to take up the various positions. In return, this will ensure compliance with international laws(Christensen, Kent and Stewart, 2010). On the other hand, the issue of raising share capital can be done in various ways, first since the company is a public listed company, it can invite members to subscribe to its shares so as to raise more capital. In addition, the company can raise additional capital through way of debentures.In regards to the issue of contracts, Peter should be answerable to the company. He should disclose the secret profits made and asked to remit them to the company. In addition the corporate of veil should be lifted so as to establish the real owner of the company(Lange, Ramsay and Woo, 2018). Recommendation of solution The following recommendations are made to the company and the regulator; the corporate of veil should be lifted so as to establish who is behind the non-profit organization award of tenders. Peter should cease to carry own the duties of a director since he not used the companies resources for its best interest but his own. The board should ensure that the management of the company reflects gender equality. Similarly, competent officers’ should be appointed to ensure that the company meets its set objectives.
Surname4 References A.O., H. (2012). "Corporate Practices and Conduct": Setting Standards for Corporate Governance in Australia.Corporate Governance: An International Review, 1(4), pp.196-196. Baxter, P. (2014). Corporate governance ratings and financial performance: evidence from Australia.International Journal of Corporate Governance, 5(3/4), p.178. Christensen, J., Kent, P. and Stewart, J. (2010). Corporate Governance and Company Performance in Australia.Australian Accounting Review, 20(4), pp.372-386. Lange, H., Ramsay, I. and Woo, L. (2018). Corporate Governance and Anti-Takeover Devices: evidence from Australia.Corporate Governance, 8(3), pp.227-243.