Ethics and Governance in Woolworths Limited Group

Running head: ETHICS AND GOVERNANCE 1
Ethics and Governance
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ETHICS AND GOVERNANCE 2
Executive Summary
This report is on Woolworths Limited Group likely ethical and governance outlook based
on an analysis of their reports, portfolio, communications and other corporate governance theory.
It describes the company in details after which it looks into the corporate governance of the
company.
Research indicated that the company applies agency theory which is an inclination to the
shareholders’ interests by the board members. It also points out to means used by the company to
prove its legitimacy to the society based on legitimacy theory. These results are important
because they are an indication of the company’s corporate governance and ethical outlook.
Introduction
Corporate governance is an important role by board members which determines the
direction and overall outlook of a company (Keith, 2012). Woolworths a company with its
headquarters in New South Wales offers a variety of retail operation across and outside
Australia. This paper is aimed at determining the likely ethical and governance outlook.
In attaining this it looks into the company’s reports which are majorly the latest annual
report of 2018, sustainability report, corporate responsibility report and other important reports.
It then applies agency theory and legitimacy theory in understanding the company better.
Outcome of this research process indicate the board orientation to the shareholders which is used
in determining it likely ethical and governance outlook. Several peer reviewed articles and
journals are also used in the research process in order to make sense of the facts and observations
form the reports.

ETHICS AND GOVERNANCE 3
Understanding the company
Woolworth Group Limited formerly referred to as Woolworth Limited is an Australian
based company which deals or engages in retail operations throughout Australia and New
Zealand. It was founded in 1924 by George Creed, Percy Chrismas, Stanley Charton, Cecil Scott
and Eerest Williams. In terms of revenue it is the second largest in Australia proceeded by Perth
Conglomerate West farmers (Tricker & Tricker, 2015).
Its retail operations include supermarkets, petrol, liquor, hotels and gambling centers,
general merchandise, home improvements, finance and Woolworths online. It is the largest
liquor retailer in Australia, the second largest company in New Zealand, the largest hotel in
Australia and it has the largest gaming poker machine in Australia. These company that was
ranked 19th largest retailer in the world by 2008 has a revenue of A$ 56726 billion and it has
employed a total of 201,522 members with 54% female employee and 46% male employees. Out
of these 54% female, 32% are in senior management position.
The supermarkets are known by brand names Woolworth and Safeway in Australia while
in New Zealand they are known by brand name Countdown, these supermarkets carry out
procurement of food and liquor in their areas of operation. The company has got 323 venues with
over 537 retail locations which offer hospitality experiences such as restaurants, gaming lounge,
cafes, bistros and nightclubs. The Liquor and Petrol retails carry out procurement and resale of
these products in Australia. General merchandise retails carry out retailing of general
merchandise to customers who are mostly located in Australia.
Woolworths Group Limited mission is to provide its best in terms of value, quality and
convenience to their customers who are approximately 29 million weekly over their 3000 stores.
Their strategy is centered in four areas which are, talent nurturing, optimizing value, supporting

ETHICS AND GOVERNANCE 4
and growing new business and lastly extending their leadership. Some of their principles include
honesty, transparency and fairness according to their annual report (Claessens & Yurtoglu,
2013).
The company has its headquarter in Bella Vista in Australia, with approximately 445 000
shareholder’s majority being Australian citizens. However, several Australians are also
shareholders due to superannuation funds. The company reported one of the hugest losses in
their history in 2012, this was the first of its kind in more than 20 years where it lost $1.235
billion. However, in 2018 its net profit increased by more than 12% which was $1.27 billion due
to rise in income in the food division and petroleum division. It has been experiencing a rise in
net profit this year due to the favorable weather condition (Parker, Carey & Scrinis, 2018).
In the company’s portfolio, it mentions three major core business which are Australian
Food consisting Woolworth supermarket, Financial services and insurance and Woolworth
Rewards. New Zealand Food which consists of Countdown and Endeavor drink which consists
of brands such as Langton’s, Cellarmasters, BWS and Dan Murphy’s (Bailey, Price, Pyman &
Parker, 2015).
It is important to note that the Woolworth Group Limited in question which has its
headquarters in Australia has no connection with other brands called Woolworth in countries
such as United States and United Kingdom, they were all named after the same person Frank
Winfield Woolworth.
Corporate Governance
Woolworth Group Limited is composed of 9 board of directors consisting of 5 females
and 4 males. Members of the board of directors led by Gordon Cairns as the chairman include