Corporate Governance Requirements: Baby Bunting Group Company Limited

This report delves into the significance of corporate governance within a business context, using the Baby Bunting Group Company Limited (BBGCL), an Australian nursery retailer, as a case study. It examines the OECD's definition of corporate governance and its role in setting and achieving company objectives. The report analyzes the impact of structural changes, particularly the shift from a family-owned business to a public sector company, and how these changes necessitate revisions in corporate governance policies. It explores the purpose of corporate governance activities, including mitigating conflicts of interest and ensuring efficient asset use. Furthermore, the report details director's duties, ASIC legislative requirements, and the review of internal control procedures, including cash handling. The analysis identifies potential loopholes in existing procedures and proposes improvements for enhanced organizational productivity, legal compliance, and risk management.

Running head: CORPORATE GOVERNANCE REQUIREMENTS
Corporate Governance Requirements
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Table of Contents
Introduction...................................................................................................................................2
1.1 Requirement of corporate structural changes.........................................................................2
1.2 Purpose of corporate governance activities............................................................................3
1.3 Director’s duties.......................................................................................................................3
1.4 ASIC legislative requirements..................................................................................................4
1.5 Review of current internal control procedures........................................................................4
1.6 procedures for controlling handling of cash receipts and payments.......................................4
Conclusion..................................................................................................................................... 5
References..................................................................................................................................... 6

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Introduction
The assignment focuses upon the importance of corporate governance within the
context of a business organization. The organization for Economic Cooperation and
Development (OECD) defines corporate governance as relationship among a company’s board,
management, shareholders and different stakeholders. It provides a structure for setting the
objectives of the company and the means of attaining the objectives. The assignment further
studies the importance of structural changes within the business context.
For the current assignment, the Baby Bunting Group Company Limited (BBGCL) have
been chosen which is an Australia based nursery retailer and one-stop baby shop. The company
had been found and run as a family owned business organization. However, recently the
majority shares of the company had been undertaken by the Government making it a public
sector Company. The aim was to provide baby care products to the new born to 3 years of age
at affordable prices. It further analyses the legislative requirements and the impact of the same
upon controlling the internal procedures within the organization.
1.1 Requirement of corporate structural changes
The changes in the structures and policies of corporate governance helps in meeting
with the business objectives of the organization such as protecting company assets from
accidental losses, to ensure reliability of financial information, promote an environment where
the staff and the management can maximize their productivity for the benefits of the
organization (Ball et al. 2013).
There are a number of reasons based upon which the corporate governance policies of a
company or business organization are restructured. Some of these have been discussed within
the context of the assignment such as change in management. In this respect, BBGCL have been
changing its governance from that of a private retailer store to a public sector undertaking
(Babybuntingcorporate 2017). Therefore, the change in ownership called for revision of the
corporate governance policies of the company. In this respect, the reduction of the

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commodities sold by the retail group can incur sufficient amount of losses. Therefore, new
policies need to be laid out where adequate resources and funds are provided by the
government. The policies and pricing needs to be transparent which will prevent the overseas
customer from paying more for the products sold (Too and Weaver 2014). The retail group
therefore needs to clearly mention its pricing policies and terms of services and conditions over
its web portals to prevent any forms of ethical breach.
1.2 Purpose of corporate governance activities
The corporate governance activities can help the board in understanding the overall
organizational oversights and objectives. The attributes of the corporate governance helps in
analysing the financial risks. The corporate governance framework helps in focussing upon the
important issues and deal with them within limited time frame and resources (Tricker and
Tricker 2015).
The activities of corporate governance help to mitigate conflicts of interest and to
ensure that the assets of the company are productively used in the best interest of the
investors and stakeholders. The BBGCL may be facing a lot of conflicts within the international
market owing to change of power. The governance activities help in upholding the
organizational interests (Alexander et al. 2014). This further provides the company with an
upper hand over its similar market players.
1.3 Director’s duties
The responsibilities of the director’s within the context of corporate governance could
be described over here as follows. The Board of directors has the authority for resolving
matters related to strategic decision making (Young and Thyil 2014). They are also responsible
for monitoring the performance of the senior management and employees within the retail
outlet. The director plays a crucial role in planning and management of the merger and
acquisition activities. In the present context, the directors of the BBGCL need to daft the
business objectives and present the governing objectives in front of the government.

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1.4 ASIC legislative requirements
The Australian Securities and Investments Commission (ASIC) is an Australian government
body that that acts as a corporate regulator that acts as a corporate regulator. Here, the ASIC is
responsible for enforcing and regulating the financial resources of the company (Asic 2017). The
goal of ASIC is to unite the corporate regulators across Australia. The following legislative
requirements as established by ASIC could be followed by BBGCL such as-
 Promotion of informed participation by consumers and investors in the financial system
 Administration of law within the business establishments with procedure and hazards
 Make up-to-date information about the company available to the public
1.5 Review of current internal control procedures
The internal control procedures of the BBGCL have been discussed as follows. Some of
these policies have been found to possess loopholes and gaps and needs to be reviewed or
modified for the maximization of the organization productivity. Some of these are segregation
of duties, implementation of authorisation procedures, maintenance of adequate records and
documents, implementation of physical control for safeguarding the assets of the company,
conducting independent verifications (Khan et al. 2014).
However, there are issues arising with respect to implementation of the authorisation
procedures and conducting of independent verification with respect to merger and acquisition.
In this respect, BBGCL had been taken over by the government enterprises resulting in chaotic
situations where the company cannot conduct internal verifications except in emergency
situation. This becomes limitation on the part of the business organization where they cannot
practise sufficient autonomy within their own operations.

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1.6 procedures for controlling handling of cash receipts and payments
For preventing frauds and errors in the handling of cash receipts and payments a
number of risk control methods could be followed. Some of the assessment tools which could
be implemented over here are the Risk control Matrix. It serves as the audit plan and identifies
the plausible risks that the organizations might be facing.
Some of the test control results which had been applied by the BBGCL are use of
electronically read barcodes indicating the specificities of the product along with the prices. It
helps in accurate regirding of transaction data in much real time across large databases and
prevents frauds.
Conclusion
The corporate governance consists of list of factors and attributes based upon which an
organization is controlled and directed. The implementation of the governance policies ensures
legal compliance and prevents unlawful activities or behaviour within the organization. The
BBGCL follows a one-to-many relationship for establishment of a result between one control
test and many control results by application of the control tests against multiple items. The
multiple number of options taken into consideration which helps in focussing upon the long
term strategies which could be used for mitigating the financial risks suffered by the company.

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References
Alexander, J.L., Smith, K.A., Mataras, T., Shepley, S.B. and Ayres, K.M., (2015). A Meta-Analysis
and Systematic Review of the Literature to Evaluate Potential Threats to Internal Validity in
Probe Procedures for Chained Tasks. The Journal of Special Education, 49(3), pp.135-145.
Asic (2017), Asic , Available at : http://www.asic.gov.au/about-asic/ [Accessed on 26 Nov.
(2017)]
Babybuntingcorporate (2017), Babybuntingcorporate , Available at :
http://www.babybuntingcorporate.com.au/about-us [Accessed on 28 Nov. (2017)]
Ball, A., Grubnic, S. and Birchall, J., (2014). 11 Sustainability accounting and accountability in the
public sector. Sustainability accounting and accountability, p.176.
Drennan, L.T., McConnell, A. and Stark, A., (2014). Risk and crisis management in the public
sector. Abingdon: Routledge, p.25.
Khan, A., Muttakin, M.B. and Siddiqui, J., (2014). Corporate governance and corporate social
responsibility disclosures: Evidence from an emerging economy. Journal of business
ethics, 114(2), pp.207-223.
Too, E.G. and Weaver, P., (2014). The management of project management: A conceptual
framework for project governance. International Journal of Project Management, 32(8),
pp.1382-1394.
Tricker, R.B. and Tricker, R.I., (2015). Corporate governance: Principles, policies, and practices.
Oxford University Press, USA, pp. 15-25.
Young, S. and Thyil, V., (2014). Corporate social responsibility and corporate governance: Role
of context in international settings. Journal of Business Ethics, 122(1), pp.1-24.