Corporate Governance and Ethics: A Sustainability Assessment Report of Timbermberwell Construction

This report evaluates the sustainability of Timbermberwell Construction, a residential development company, using the Global Reporting Initiative's sustainability-reporting standard. It covers economic, environmental, and social sustainability, including issues such as corruption, climate change, anti-competitive behavior, energy consumption, biodiversity, non-compliance with regulations, employee turnover, discrimination, and community engagement.

Running head: CORPORATE GOVERNANCE AND ETHICS
Corporate governance and ethics
Name of the university
Name of the student
Authors note

1
CORPORATE GOVERNANCE AND ETHICS
Table of Contents
Introduction:....................................................................................................................................1
Discussion:.......................................................................................................................................2
A: Economic sustainability..............................................................................................................2
B: Environmental sustainability......................................................................................................3
C: Social sustainability:...................................................................................................................3
Conclusion:......................................................................................................................................3
References list:.................................................................................................................................3

2
CORPORATE GOVERNANCE AND ETHICS
Introduction:
The sustainability-reporting standard designed by GRI (Global Reporting Initiative) is
used by the organizations who intend to prepare sustainability report for evaluating the impact of
their operations on environment, economy and society. This particular assignment deals with the
preparation of sustainability assessment report of a privatized land development company named
Timbermberwell Construction by referring to the consolidated set of GRI reporting standards
2016. Timbermberwell Construction is residential development company that is entitled to
construct apartment complexes in Stanwell Complex district. Economic sustainability of
organization has been addressed by providing a specific disclosure concerning corruption,
climate change and anti competitive behavior. Environmental sustainability is explained in
relation to disclosure of bio diversity, energy consumptions and non-compliance with regulations
and laws (Aguilera et al. 2015). Furthermore, assessment of social sustainability is done in
relation to discrimination, attrition and community engagement.
Discussion:
A: Economic sustainability
Disclosures under the assessment of economic sustainability are used by organization for
reporting the impact of their operations in relation to economy. GRO 201 sets out the reporting
requirement in relation to the economic performance for organization of any size, location and
operating sector. As per the disclosure of 201-2, reporting organization is required to report the
information relating to the opportunities and risk due to climatic changes and leads to substantive
change in revenue, operations and expenditures. It incorporates description of opportunities and

3
CORPORATE GOVERNANCE AND ETHICS
risks along with their classification and its associated impact (Buhr et al. 2014). Moreover,
financial implications of such opportunity and risk and methods used to manage such risks.
From the case study, it can be seen that a case was filed by one of the former employee of
Timbermberwell concerning their incompliance with environmental standard. Operations of
company have hampered flora and fauna attributes and have critically endangered coastal
grassland of ecological community. It is required by Construction Company to report and
prepare the timeline for developing necessary system to calculate financial implications of risks
of climatic change resulting from their activities. Moreover, there should be a classification of
opportunities and risks attributable from climatic change. In order to address the challenges
arising from climatic conditions, Timbermberwell should make use of method such as venting,
flaring and fugitive reduction of emission, carbon capture and storage and renewable energy
certificates (McCahery et al. 2016).
Disclosure 205-3 deals with confirming of involvement of organization in corruption and
taking actions accordingly. Organization complying with the standard is required to disclose the
information about total number of confirmed corruption incidents (Junior et al. 2014). Incidents
regarding the dismissal of employees for corruption should also be disclosed. Any legal cases
filed against the company regarding corruption during the reporting period should be disclosed.
It is in the interest of stakeholders to have acquaintance with the number of incidence and
response of organization towards such incidences.
Analysis of case study depicts that employees of Timbermberwell were involved in
corruption scandal of bribing council project officers for pushing the applications through the
approval process of council for promoting development of company. All such external
consultants and employees involved in the corruption were suspended. The company also

4
CORPORATE GOVERNANCE AND ETHICS
terminated the partnership contracts with the external consultants (McAlister et al. 2016). As per
this particular disclosure, Timbermberwell is also required to make disclosure of terminated
contracts.
Disclosure 206-1 sets out reporting requirement for organizations relating to anti
competitive behavior, monopoly practices and antitrust. Reporting entities are required to make
disclosure of the information concerning total number of legal actions that are pending or have
been completed during the reporting period relating to the violation of antitrust, identification of
monopoly legislation and anti competitive behavior (Fernandez et al. 2014).
As depicted in the case study, Timbermberwell was alleged by ACCC (Australian
competition and consumer commission) for engaging in the activities of preventing new entrant
in Stanwell district in the development market with the intention of reducing the competition in
market. The case has been filed in the court and Timbermberwell construction will be called for
hearing after four months. In this particular regard, it is required by the company to report the
legal actions that are pending regarding the monopoly legislation. Outcome of such legal actions
are also required to be disclosed in the sustainability assessment report.
B: Environmental sustainability
Disclosure 3012-1 relates to consumption of energy within organization. Information that
reporting organization is required to disclose on their sustainability report involves to the
consumption of fuel from renewable and non-renewable sources in relation to types of fuels used
and in joules or multiples (Lewellyn et al. 2016). Moreover, information relating to total
consumption of energy and sources of conversion factors should also be used. The calculation
tools, methodologies, assumptions and standards are also to be reported by the organization.

5
CORPORATE GOVERNANCE AND ETHICS
Double counting of fuel consumption should be avoided while compiling of information.
Consumption of fuel from both renewable as well as non-renewable sources should be
presented separately. Disclosure of data should be consistently deal done in line with the
conversion factors application (Du Plessis et al. 2018). Approach of organization when using any
particular methodology should also be depicted.
Media release by Timbermberwell construction demonstrating it as energy efficient
organization attached the energy consumption table. There was a clear depiction of usage of
calculation tools that is prescribed by Australian department of Science and Industry.
Furthermore, it was also explained that a program has been raised by organization for increasing
use of fuel consumption from non-renewable sources of energy (Tricker and Tricker 2015).
Therefore, it can be inferred from this discussion that Construction Company is complying with
this particular disclosure requirement.
Disclosure 304-2 deals with the considerable impact of products, activities and services
of organization on biodiversity. The significant impact of activities such as construction,
transport, infrastructure and mine and its impact on biodiversity should be reported. Direct and
indirect positive and negative impact with reference to extent of areas affected, species affected,
reversibility and irreversibility of impacts and duration of impacts should be disclosed. Supply
chain of company might be impacted by indirect impacts of biodiversity. Organizations
complying with this disclosure will have an understanding of strategy for mitigating direct and
indirect impact on biodiversity.
The operations of Timbermberwell construction has adverse impact on endangered
ecological community. For the construction of complexes, organization has cleared area that

6
CORPORATE GOVERNANCE AND ETHICS
contained an important attributes of flora and fauna. However, they received an order for the
implementation of rehabilitation plan as said in the audit programs for contractors.
Disclosure 307-1 deals with non-compliance of organization with the environmental
regulations and laws. This particular disclosure requires entities to report the information relating
to non-compliance of organization with rules and regulations pertaining to environment and
sanction of any non-monetary and significant fines for not complying with the environmental
regulations and rules. This disclosure should be done in terms of total number on non-monetary
transactions, significant fines monetary value and cases that are brought against the mechanisms
of dispute resolution. Organizations are required to make brief statement in case there has not
been any identification of non-compliance with the rules and regulation of environment.
When organizations fail to comply with the rules and regulations of environment,
reporting entity should incorporate judicial and administrative sanctions when the specific
information is to be complied. This would incorporate national, regional, local and sub national
regulations, conventions, international declarations and treaty. Any voluntary agreements of
environments that are developed as substitute of new regulations implementation with regulating
authorities should also be considered. Other cases against the organization through national and
international dispute mechanisms supervised by authorities of government should also be
complied within the disclosed information (Bilbao et al. 218).
From the evaluation of the case study, it has been ascertained that Timberwell
construction has not complied with the environmental regulations. Their activities of clearing the
acre of land for constructing the complexes have led to endangering of ecological community.
When an organization does not comply with the environmental rules and regulations, it is
indicative of the fact that management ability ensures the confirmation of operations to

7
CORPORATE GOVERNANCE AND ETHICS
parameters of certain parameters (Cuomo et al. 2016). However, in certain circumstances and
situations, not complying with such regulations can lead to clean up of environmental liabilities
that are costly.
C: Social sustainability:
Disclosure 401-1 is about the disclosure of information relating to employee turnover and
new employee hire. Information that are required to be reported by organization in relation to
this disclosure is total rate and number of employee turnover and total rate and number of newly
hired employees by gender, religion and age during the reporting period.
For the computation of rate of employee turnover and new employee hires, organization
should take into account total number of employees at the end of reporting year. It is depicted in
the case study that seventeen employees of Timberwell construction have left either for the
establishment of their own business or for working for rival company. It can be regarded as
higher employee turnover resulting from dissatisfaction and uncertainty among employees.
Higher employee turnover can have considerable impact on the productivity of organization. In
relation to hiring of new employees, organization should make the implementation of disclosure
of recruitment practices (Kiron and Kruschwitz 2015).
Disclosure 406-1 deals with the discrimination incidents and corrective actions that
should be taken by organization. Organization is required to disclose the information relating to
total number of discriminated incidents along with incidents status and actions taken relating to
remediation of plans, reviewed incidents and incidents that are not accountable for actions.
One of the employees of Timberwell construction was discriminated by co-workers and
he was the target of humiliation. Employee filed a workplace harassment claim in the fair Work

8
CORPORATE GOVERNANCE AND ETHICS
commission organization received an order updating anti discrimination policy and accordingly
providing training to employees. Therefore, in accordance with this disclosure, Timberwell is
required to disclose the reviewing of complain that has been lodged in the fair Work
commission. Moreover, the actions taken such as updating of anti discrimination policy, which is
remediation plan in the process of internal review management should also be disclosed in the
reporting standard (Grushina 2017).
Disclosure 413-1 deals with the operation of organization by engaging local
communities, developing programs and assessing the impacts. Organization adhering to this
particular disclosure requirement need to report the assessment of social and environmental
impact and ongoing monitoring. Development programs of local community based on needs of
local communities along with the grievance process of formal local community should also be
disclosed (Grushina 2017).
According to this disclosure, Timberwell is required to consider the differentiated nature
of local communities and taking specific actions for the identification of vulnerable groups. For
ensuring effective participation of vulnerable groups, organization is required to make the
implementation of differentiated measures (Schneider and Scherer 2015). An organization can
use number of tools for engaging communities including the assessment of human and social
rights. A diverse set of approaches for properly identifying community characteristics and
stakeholders should be undertaken. Timberwell should take measures for reducing the adverse
impact of their operations environment and accordingly managing the impacts and compensating
local communities. This incorporates several issues such as socio economic status, gender, age
and specific vulnerabilities concerning human health (Crane and Matten 2016). Therefore,

9
CORPORATE GOVERNANCE AND ETHICS
Timberwell is required to assess the impact of its activities on communities and development and
implementation of program.
Conclusion:
From the analysis of case study, it is ascertained that Timberwell construction has not
adhered to the reporting standard that has led to declining its performance and increase attrition
rate. In order to prepare the sustainability report of organization, it is required comply with
several disclosures of the reporting standards of Global reporting initiative. The ongoing cases
against the company concerning corruptions, anti discrimination laws and violation of
environmental regulations and the actions that are taken against them should form a part of their
sustainability report. This particular assessment has focus on material topics that is affecting the
organization. The current scenario of Timberwell Construction requires it to adhere to the several
economic, environmental and social disclosure requirements that lead to an overall improvement
in sustainability position.

10
CORPORATE GOVERNANCE AND ETHICS

11
CORPORATE GOVERNANCE AND ETHICS
References list:
Aguilera, R.V., Desender, K., Bednar, M.K. and Lee, J.H., 2015. Connecting the dots: Bringing
external corporate governance into the corporate governance puzzle. The Academy of
Management Annals, 9(1), pp.483-573.
ArAs, G., 2016. A handbook of corporate governance and social responsibility. CRC Press.
Bilbao-Terol, A., Arenas-Parra, M., Cañal-Fernández, V. and Obam-Eyang, P.N., 2018. Multi-
criteria analysis of the GRI sustainability reports: an application to Socially Responsible
Investment. Journal of the Operational Research Society, pp.1-23.
Buhr, N., Gray, R. and Milne, M.J., 2014. Histories, rationales, voluntary standards and future
prospects for sustainability reporting. J. Bebbington, J. Unerman and B. O’Dwyer, eds, pp.51-71.
Crane, A. and Matten, D., 2016. Business ethics: Managing corporate citizenship and
sustainability in the age of globalization. Oxford University Press.
Cuomo, F., Mallin, C. and Zattoni, A., 2016. Corporate governance codes: A review and
research agenda. Corporate governance: an international review, 24(3), pp.222-241
Du Plessis, J.J., Hargovan, A. and Harris, J., 2018. Principles of contemporary corporate
governance. Cambridge University Pr
Fernandez-Feijoo, B., Romero, S. and Ruiz, S., 2014. Effect of stakeholders’ pressure on
transparency of sustainability reports within the GRI framework. Journal of business ethics,
122(1), pp.53-63.
Grushina, S.V., 2017. Collaboration by design: Stakeholder engagement in GRI sustainability
reporting guidelines. Organization & Environment, 30(4), pp.366-385.

12
CORPORATE GOVERNANCE AND ETHICS
Junior, R.M., Best, P.J. and Cotter, J., 2014. Sustainability reporting and assurance: A historical
analysis on a world-wide phenomenon. Journal of Business Ethics, 120(1), pp.1-11.
Kiron, D. and Kruschwitz, N., 2015. Sustainability reporting as a tool for better risk
management. MIT Sloan Management Review, 56(4).
Lewellyn, P.G. and Logsdon, J.M., 2016, July. How Sustainability Reporting Is Maturing: A
Preliminary Assessment of the Impact of GRI’s G4 Guidelines. In Proceedings of the
International Association for Business and Society (Vol. 27, pp. 122-132).
McAlister, D.T., Marcos, S. and Ferrell, O.C., 2016. Corporate governance and ethical
leadership. Business Ethics: New Challenges for Business Schools and Corporate Leaders: New
Challenges for Business Schools and Corporate Leaders, p.56.
McCahery, J.A., Sautner, Z. and Starks, L.T., 2016. Behind the scenes: The corporate
governance preferences of institutional investors. The Journal of Finance, 71(6), pp.2905-2932.
Schneider, A. and Scherer, A.G., 2015. Corporate governance in a risk society. Journal of
Business Ethics, 126(2), pp.309-323.
Tricker, R.B. and Tricker, R.I., 2015. Corporate governance: Principles, policies, and practices.
Oxford University Press, USA.