Corporate Governance: Policies, Practices, and Impact in Australia

This report provides an analysis of corporate governance in Australia. It explores the legal and regulatory framework, including the Corporations Act 2001 and the ASX Principles. The report examines the impact of corporate governance on business operations, innovation, and economic development. It discusses the influence of 'hard' law, 'soft' law, and non-binding guidelines on corporate behavior. The report also highlights the challenges posed by over-regulation and the impact of corporate governance policies on financial growth and innovation. The study further considers the role of the Australian Institute of Company Directors (AICD) and its influence on corporate governance practices. The report concludes that the current corporate governance policies in Australia are creating blockage in financial growth and innovative implementation.

Running head: CORPORATE GOVERNANCE
Corporate Governance
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2CORPORATE GOVERNANCE
Corporate Governance is a collection of regulatory procedures and legal obligations under
which business are operated, regulated and controlled. Corporate Governance includes both
internal and external factors that affect every aspects of the business including eligibility,
operations, continuity, stakeholder engagements and other factors. Therefore, the association
between the corporate governance process and the internal operations of any is clearly
identifiable. In general, corporate governance strategies can hugely influence the creativity,
innovation and economic development of a business and even of an industry.
In past two decades corporate governance policies and regulations in Australia are taking
prominent role for business environment and its future development. Corporate Governance
of Australia is currently developing to adopt global economical changes while taking care of
internal and external economic crisis of the country. Hence, corporate governance framework
in Australia extends beyond the compliances of regulation and voluntary elements. The key
elements of Australian Corporate Governance are:
 ‘hard’ law, being legally binding case law and legislative requirements, such as
the Corporations Act 2001 (Cth) (Corporations Act),
 ‘soft’ law, being the listing rules of Australian Securities Exchange Limited (ASX) which
principally have effect as a contract under law, and
 non-binding guidelines, most notably including the third edition of the ASX Corporate
Governance Council’s Principles and Recommendations (ASX Principles).
In all these above mentioned aspects the corporate governance of Australia is controlling the
liabilities of business ownership, human resource management, contractual ethics and
security compliances. Additionally, the recent alteration of Corporate Government policies of
Australia now slowing several internal organization’s governing factors, that includes
 Extensive regulation and personal liability of directors,

3CORPORATE GOVERNANCE
 A move towards principles-based systems of governance, and
 Influential large institutional investors and a strong investment 'infrastructure'.
Therefore, the independency of the workforces is decreasing rapidly in every industry, which
reducing the ability to utilise talents and innovation within the organisational workforce. It is
also blocking the new scopes of engaging with new innovative ventures that hold huge
potentiality of profit.
federal and state governments of Australian has been actively lobbied by Australian Institute
of Company Directors (AICD) to ‘wind back’ regulation while imposing personal liability on
directors. It results the over-regulation that can push directors’ focus away from innovative
strategy to compliance issues while minimising business opportunities. From employment to
contractual investment the current corporate governance of Australia is controlling the
corporate activities intensively. Restricted ability to starting new business ventures and
engaging new procedures of business, are blocking the financial growth as well. It is severely
influencing the economic growth of the business organisations and eventually the major
industries. This industrial barrier is collectively reducing the revenue generation of entire
Austria. Therefore, the statement that highlights the current blockage in financial growth,
innovative implementation due to emerging corporate governance policies, is completely
viable and authentic.