Woolworths Critical Review

Running Head: WOOLWORTHS CRITICAL REVIEW 1
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WOOLWORTHS CRITICAL REVIEW 2
Table of Contents
1.0 Internal Rules of Woolworths.................................................................................................................3
2.0 Background: Structure of the Company..................................................................................................4
Woolworths: Bankruptcy......................................................................................................................5
3.0 Critical Review of Internal Rules..............................................................................................................5
4.0 Strengths and weaknesses of the internal rules......................................................................................6
5.0 Conclusion...............................................................................................................................................8

WOOLWORTHS CRITICAL REVIEW 3
1.0 Internal Rules of Woolworths
Internal rules of a corporation can be defined as the regulations that a company relies on for each
sector. From marketing, production finance to communication. The rules can also be defined as
crucial information rendered to employees of an organization to ensure strict adherence to laws or
a description of the required code of conduct both within the work environment and with
outsiders.
The core rules of Woolworth are tenure, experience, diversity and skills. The internal rules are
divided into three main categories, financial reporting, corporate governance and remuneration
reporting. The importance of having set rules on the above-mentioned areas is to ensure that funds
for shareholders are protected. To ensure that this is achieved the persons holding positions of
power need to be of high ethical standing and responsible.
The governance framework of Woolworths comprises of a board of directors; all members of the
board are elected by the shareholders apart from the CEO and the managing director. The board
for effectiveness in running its services and fulfilling its objectives has formed the following
committees, nomination committee, risk management and compliance committee, a people policy
committee and a committee that is dedicated to sustainability. The main objective of the board
members is to serve the shareholders in ensuring optimal performance of the company. The CEO
reports to the Board and sets the parameters in which the CEO can operate in the Board is in
charge of approving the activated that the CEO carries out such as approving corporate objectives
and strategies that have been developed. The Nomination committee is tasked with coming up
with members who will form part of the board; their decisions are based on the following factors;
skills, diversity, availability, the possibility of a conflict of interest among other factors.
Directors whose tenures have expired may request the shareholders for re-election. Directors
should be independent of businesses or dealings that would interfere with their roles in the
company; all conflicts of interest need to be avoided. The directors are not exempt from
evaluation; the chairperson is the one mandated to carry out routine evaluations. The audit risk
management committee’s main o0bjective is to give the board advice that deals with governance,
risk systems and matters touching on accounting. The risk management committee comprises of a
minimum of three directors. However they need to be non-executive directors.