Corporate Governance and Ethics: Hastie Group Analysis

This report examines corporate governance and ethical considerations within a company, specifically focusing on the roles and responsibilities of directors, shareholders, and auditors. It references the Corporation Act 2001 to outline the legal duties and obligations of each party, highlighting the importance of acting in good faith and with due diligence. The report analyzes a case study involving the Hastie Group, illustrating the consequences of failures in corporate governance, such as financial losses and impacts on stakeholders. It emphasizes the importance of auditors in maintaining professional skepticism and providing accurate financial statements, as well as the role of management in establishing a strong governance system. The report concludes by underscoring the significance of effective corporate governance in ensuring the financial stability and ethical conduct of a company.

Running head: CORPORATE GOVERNANCE AND ETHICS
Role and Duties
Name of the Student
Name of the University
Author Note

1CORPORATE GOVERNANCE AND ETHICS
Role and duties of directors:
Directors are acting as a mind of the company and according to the Corporation Act
2001, the directors are required to act in good faith and with due care and diligence (Whincop,
2017). In Hastie Group’s case, it has been observed that the directors have failed to analyze the
previous financial condition of the company and therefore, the company has to face huge
financial loss due to it.
Role and duties of shareholders:
Under the Corporation Act, the shareholders are enjoying certain rights. However, after
the financial collapse found in the Hastie Group, it can be stated that the director of a company
has failed to act for the interest of the shareholders. Many employees lost their job and the many
shareholders become insolvent due to this. The shareholders can claim their money from the
directors of the company (Kent & Zunker, 2017).
Role and duties of Auditors:
The provision regarding audit and auditor’s report have been mentioned under section
307 to section 313 of the Corporation Act 2001. The auditors can maintain professional
skepticism of a company and they play an important role in the company. The condition of the
company regarding pay off a debt is depended on the auditor’s report. Therefore, they are
obliged to make a clear statement and do not hide any facts that can be harmful for the interest of
the company. After the financial collapse of Hastie Group, it has been observed that the auditors
of this company have failed to maintain all these duties.

2CORPORATE GOVERNANCE AND ETHICS
Role of management:
Management means the authority that regulates the work of the company. The matters
that should be disregarded in a company have been discussed under section 48 of the Act 2001.
Further, the directors, managers and auditors are also liable to establish a good management
system. However, in this case, the management has failed to make any such steps and the
company had to face dire consequence.

3CORPORATE GOVERNANCE AND ETHICS
Reference:
Kent, P., & Zunker, T. (2017). A stakeholder analysis of employee disclosures in annual
reports. Accounting & Finance, 57(2), 533-563.
Whincop, M. J. (2017). Corporate governance in government corporations. Routledge.
`

4CORPORATE GOVERNANCE AND ETHICS