Essay: Australian Corporate Governance Guidelines for Cochlear Limited

This essay analyzes the corporate governance practices of Cochlear Limited (ASX: COH) in the context of Australian Corporate Governance Guidelines. It begins with an introduction to corporate governance, defining its role in directing and controlling a firm, and highlights Cochlear's commitment to ethical conduct and transparency. The essay explores the company's adherence to the ASX Corporate Governance Council Principles and Recommendations, emphasizing the importance of board responsibilities, shareholder rights, and fair remuneration. It examines the company's approach to risk management and identifies potential future challenges, such as maintaining director independence and addressing reputational risks. The essay references Cochlear's annual report and relevant academic sources to support its analysis, providing a comprehensive overview of the company's governance framework.

ADVANCED FINANCIAL
REPORTING

TABLE OF CONTENTS
ESSAY: Advanced Financial Reporting..........................................................................................3
REFERENCES................................................................................................................................5

ESSAY: Advanced Financial Reporting
Corporate Governance is any system or process through which firm is controlled and
directed. Cochlear Limited is committed for ensuring the maximum standards' on honesty,
professionalism, integrity that comply with all legislation. Cochlear limited ensure that both
financial and non financial accountability and transparency are delivered to stakeholders. There
Global code of conduct provides they had to conduct business with fairness and honesty. They
have different policies for Sanctions, Anti-Bribery, IT Security, Privacy and Whistle Blower
Protection. Cochlear provides regular training and development for these type of policies to
employees and comply with all obligations.
The ASX Corporate Governance Council Principles and Recommendations were brought
in 2003 for achieving good outcomes of corporate governance for meeting expectations of
investors in most of the situations(Tricker and Tricker, 2015). The Recommendations that were
made by this committee were beneficial for investors as they provided guideline for betterment
of Investors. They had laid solid foundations for management and also discloses respective roles
and responsibilities to Board of directors for sake of investors. It also provides guidelines for
respecting the rights of its shareholders and they must provide different information and
responsibilities that are required to Cochlear Limited(Recommendation in Australian Corporate
Guidelines, 2018). This committee also recommend that directors of Cochlear Limited must be
paid fair remuneration for retaining, attracting, motivating senior executives. The principles that
are laid also states that Cochlear Limited must act ethical and responsible and must safeguard
there integrity while corporate reporting. The balanced and timely disclosure is required for all
matters that can materially affect the price and value of there shares and
securities(Recommendation in Australian Corporate Guidelines, 2018). This committee also
suggests that there should be an written agreement with every director in which all the terms of
appointment are defined in that.
The Cochlear Limited must have an appropriate size, composition and different skills for
discharging there duties effectively and efficiently. The board of Cochlear Limited must
determine in-dependency of director and if there is change in status of independence they should
be disclosed and must be timely explained in the market and must take any actions that are
required. This committee had also recommend that external auditor must attend AGM for
answering different questions of security holders. Providing Sufficient information by Cochlear

Limited for assessing and managing investment risk by investors is a crucial part of
management. The risk management practices can help in assisting in identification for
opportunities that can create values to investors(Sivathaasan, 2016). The role of risk committee
is for reviewing and making recommendations for providing adequate process for management
of risk, checking if there is any breakdown in internal control and must know if any risk that are
associated with business.
The corporate governance challenges that Cochlear limited can face in the future, as there
had been enough said regarding quality and role of directors so, there should be an healthy mix
of executive and non executive directors and getting the board right. The Independence of
directors could also be an challenge for Cochlear limited as for making good corporate
governance reform(Challenges in Governance, 2018). The Directors liability that had been
created that are related to corporate reputation that challenges directors about handling different
market rumours, indirect feedback that had been received from unknown sources etc. can be any
challenge that can be faced by Cochlear Limited in near future. The different sensational events
on corporate at CBA had challenged the reputation of board and had raised an debate that
whether the different companies deserve corporate social license to operate or not.

REFERENCES
Books and Journals
Sivathaasan, N., 2016. Corporate governance and leverage in Australia: A pitch. Accounting and
Management Information Systems. 15(4). p.819.
Tricker, R.B. and Tricker, R.I. 2015. Corporate governance: Principles, policies, and practices.
Oxford University Press, USA.
ONLINE
Challenges in Governance. 2018. [Online]. Available Through:
<https://www.businessnews.com.au/article/6-Issues-for-boards-to-consider-in-2018>
Recommendation in Australian Corporate Guidelines. 2018. [Online]. Available Through:
<https://www.asx.com.au/documents/asx-compliance/cgc-principles-and-
recommendations-3rd-edn.pdf>