Corporate Governance and Social Responsibility in Telstra: An Evaluation Based on ASX Principles

Corporate Governance and Social
Responsibility
1

Executive Summary
This assignment has played a vital role in helping to understand the importance of the ASX
Corporate Governance best practices and how it is helping the business establishments in
Australia to conduct their business operations in a socially responsible and ethical manner.
The ASX Corporate Governance Council Principles and Recommendations had been
incorporated in the y ear 2003 and they have been further amended and updated in the year
2007. The assignment would provide an in-depth explanation of the diverse aspects of the
ASX corporate governance practices and how it is eventually helping the Australian
companies to ensure a high level of transparency and accountability in their business. The
aspect of corporate governance mainly deals with the complex structure of rules and
regulations that helps in binding the diverse systems, processes and working relationships at
the workplace. By maintaining strong corporate governance within their organisational
domain, the business establishments are able to streamline their business operations in the
market. This helps them to improve their accountability towards their customers and other
stakeholders in the market and as a result business establishments are able to enhance their
brand image and reputation in the market.
2

Table of Contents
Executive Summary...................................................................................................................2
Organisation declared approach of corporate governance.........................................................4
Evaluation of Telstra’s corporate governance on the basis of eight principle of ASX..............6
Over sighting and management related solid foundation.......................................................6
Board structure for the value addition....................................................................................7
Responsible and ethical acting...............................................................................................8
Corporate reporting integrity safeguarding............................................................................9
Balanced and timely disclosure............................................................................................10
Security holder’s right respecting........................................................................................10
Recognition and management of risk...................................................................................10
Responsible and fair remuneration.......................................................................................12
Theoretical analysis..................................................................................................................12
Analysing through Agency Theory......................................................................................12
Analysing through Stakeholder Theory.............................................................................13
Conclusion................................................................................................................................13
Reference..................................................................................................................................14
Appendix..................................................................................................................................15
3

To,
The Directors,
Telstra Corporation Limited.
Dear Sir/Madam,
The current report is developed on the subject of Telstra’s corporate governance and also
business responsibility. The corporate governance practices are developed in the business
organisations for the direction delivering and controlling mechanism (Wintoki et al., 2012).
The growth and the profitability of the company are highly impacted by the corporate
governance activity of the business. The corporate governance is not a uniform approach of
the businesses and varied because of different factors like the ownership structure of the
business, economic and banking system of the region, corporate structure, and capital market
structure, circumstances of the business, market completion so on and so forth (Tricker and
Tricker, 2015). In Australia the ASX guidelines of corporate governance is one approach of
corporate governance process simplification. In the current report of Telstra’s corporate
governance the eight principle of corporate governance would be evaluated on the basis of
the company’s published approached for corporate governance. The analysis would try to
understand how those principles are followed in the business and Telstra’s position as strong,
weak or semi strong corporate governance following organisation.
Organisation declared approach of corporate governance
Telstra is focused in their corporate governance activity. The organisation wants to deliver
the accountability and transparency through their operational approach to the different
stakeholder especially the shareholders. This approach is essential for the long term
sustainability and performance of the business (Tricker and Tricker, 2015). Telstra in its
entirety follows the corporate governance recommendation and principle developed by ASX.
At the time of development of their corporate governance approach the organisation conducts
proper deliberation on the regulation, different expectations and market principles
(Telstra.com.au, 2018). Considering all of these principles Telstra follows the following
communicational approach in developing the corporate governance framework to be followed
in the organisational activity.
4