Corporate Governance and Risk Management Case Study - BUSN603

This case study analysis examines the corporate governance and risk management practices of Terra Australis Financial Planning Limited (TAFP), a financial planning arm of Terra Australis Bank (TAB). The analysis addresses several key questions related to enterprise risk management, remuneration plans, the role of ASIC, the impact of media on good governance, and the significance of whistleblower policies. The study explores strategies for mitigating risks, reducing agency conflicts, and promoting ethical conduct within organizations. It highlights the challenges of good governance, including ethics violations, lack of transparency, and oversight issues, and provides insights into how businesses can improve their governance and risk management practices. The analysis also examines the role of media in advancing good governance and the implications of social media on businesses.

Running head: CORPORATE GOVERNANCE
CORPORATE GOVERNANCE
Name of the student
Name of the university
Author note

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Answer to question 1
The enterprise risk management is the procedure of organizing, planning, controlling and leading
the conduct of the institution for the purpose of reducing the impact of risk on the earning and
capitals of the organization. Historically, investment in the organized risk management system
were driven by two primary factors of risk that is management priority and regulatory
requirements. Although the enhancing program of risk management is required because of
additional pressure as protection of the market value, anticipations of counterparties as well as
associated risk.
Therefore management require to demonstrate the fair consciousness and administration
of risk. It is the duty of senior management and CEO to ascertain and manage the listed
exposure of the company to risk, the audit committee should discuss the policies and guidelines
to regulate the procedure by which this is managed. The audit committee must discuss the listed
fiscal risk exposures of the company and steps management has adopted to control and monitor
such exposures. The activities that conducted by the senior management officers in pursuance of
risk management are development of risk culture that is imperative to formulate efficient
enterprise risk management program. The other factors involves determining risk appetite,
identifying risk , performing to risk, responding to risk and also integrating ERM in decision
making.

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The different methods that can be employed to address the risk involved is acceptance,
avoidance, mitigate, transfer or exploit risk. These strategies of risk management assist in dealing
with the risk of the enterprise in an efficient manner.
Answer to question 2
The remuneration plan indicates all components of packages of compensation that is
salaries, wages and benefits, the method in which it is to be paid and the purpose employee
receives salary increases, bonuses, and incentives. Staff employ incentives and remuneration to
explore the true values of the firm and the values helps in determining the behavior. Thus
remuneration can be considered as the powerful influences of board on the culture of company
(Fraser and Simkins 2016). Culture of the company has broader concentration with several
elements that could be regarded such as evasion of bullying and fraud, discrimination and risk
and the encouragement of innovation, inclusion, collaboration, communication as well as
proactive observing and escalation of potential risk.
The changes that can be employed to the remuneration plan in order to reduce agency
conflict is to make it fully transparent, restriction on the capabilities of agent, bonus and
commission structures. The agency issues are mostly prevalent when difference between the
principal and agent (Subramaniam et al. 2015). Thus remaining fully transparent will cater to
reduce the knowledge gap as well as stop the agency problem from evolving. The simplest
procedure to reduce agency issue is to eradicate fiscal incentives that motivates the conflict of
interest.
Answer to question 3

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The enforcement role of ASIC is one of its significant functions throughout the course of
fiscal planning scandal. ASIC required to be feared and respected. It requires to send
unmistakable and clear message and enduringly strengthened by actions that ASIC has required
enforcement mechanism as well as resources and is ready to apply them to advocate accepted
norms of conduct and the integrity of market (Aziz, Manab and Othman 2015). Therefore to
assist ASIC in doing the same the penalties recently obtainable for the violations of the
legislations and administers of ASIC must be reviewed to guarantee they are set at proper
margins. The penalties imposed in the term of money may also require to become more receptive
to the misconduct. The settlement of the specific matter by enforcement action however is not
the end of the procedure. In addition to that ASIC need to guarantee that culture of compliance
impaction from the enforcement action. For instance ASIC approve the enforceability
undertakings, it requires to have the instrument in place that will facilitate assurances to public
that the expected development have taken place and that the organization has initiated protective
measures that would eradicate identical misconduct from repeating in future. The transparency
that is connected with the enforceable undertakings must also be improved, in particular the
report of autonomous specialist employed as the outcome of the undertaking must be made
public (Wilkin et al. 2016). On the other side when the ASIC is failure in enforcement measures
it require to mirror and learn what it can from the previous experience. Nevertheless it had been
pointed out by ASIC that while in the process on inquiry it pursues to prevent unsanctioned
disclosure or use of statements that is provided by whistleblowers. Therefore ASIC encounter
difficulties resisting the application for the production of such documents at the time of
litigation. ASIC also face several difficulties in comprehending whether or not the allegation of
the specific products are outside or inside the legislation.

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Answer to question 4
The media plays three fundamental roles in advancing good governance that are civic
forum, watchdog as well as agenda setter. Notwithstanding, decades of scholarship there is minor
systematic attempt to assess the empirical connection between governance and media (Graham
and Kaye 2015). Furthermore scholars conceptualized governance with the scope of work and
their interest. Thus the role of media in advancing good governance is clear. All characteristics
of good governance are provided by independent and robust mediascape in the community. the
factors that limit the effectiveness of good governance involves lack of autonomy,
accountability, role clarity, stakeholder engagement or participation, coherence to the policies
particularly as connected to the objectives, professionalism as well as transparency (Zhao,
Hwang and Low 2015).
Enterprise risk managed is treated as the methodology for management of risk and it
involves identifying risk appetite, ascertaining risk, integrating management of risk in regular
decisions as well as monitoring risk. With the immense development, impact, size, social media
has become double-edged sword to many institution. Most organization comprehend the
platforms of social media can assist them in enhancing marketing, sales as well as customer
service. The response of social media to adverse impact and news cam expose enterprise up to a
deficiency of confidence by customers, question about legitimacy, lost sales,, no longer being
viewed as the employer of choice in addition to that been positioned to competitive
disadvantage. The activity of social media is discoverable as well as implications evolve faster
and easily by the speedy parting of the social media content.

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Answer to question 5
The whistleblower policy is regarded as vitally significant in safeguarding the customer
of company in addition to that directly safeguarding the enterprise by combatting fraud and
misconduct. The dire substitute is endangering legal prosecution, significant fines as well as
public scandals that are accompanied by substantial damage of reputation (Wadesango and
Mhaka 2017). Therefore removing the risk implies that workers can concentrate on more
significant matters as core needs of business in addition to that success of the organization. In a
larger scale misconduct cost taxpayer an excessive quantum of money every year. Therefore by
advancing the whistleblower culture in the organization can aid in combatting fraud and
eradicate unnecessary capital loss.
Bloe is a newly hired financial planner at Sunnyvale, New South Wales who sensed
something amiss in the financial institution. After personally experiencing dishonest act
committed by Don, Bloe inform the same to the financial planning manager. Bloe took the issue
to the middle management however the response he got was one of the evasiveness and
nonchalance. Then he realized that internal administrative body to the issue would never succeed
as the management were concealing the fraudulent act of the financial planners. However Bloe
did not want to uncover the matter as there was he had deficit of confidence towards the
regulator whistleblower protection policies. The furthermore improvement that can be made is
encouraging the workers to speak up against wrongdoings that was committed by other
employees contributes towards bringing organizational improvement. Another method is forcing
the law enforcement officers to report severe misconduct and also forcing them to bring the issue
to light would minimize secrecy in police institution in addition to that provides organizational

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improvement. Therefore by restrict them to wrongdoing is not sufficient it is also require to deter
the employees from further wrongdoings as well as reinforcing structures and practices to
minimize avenues for wrongdoings.
Answer to question 6
The question of business ethics evolves during every phase in a business. The good name
of the company as well as confidence of the stakeholders are considered to be two major asset of
the organization. the reputation of the company can be safeguarded in addition to that enhancing
employee involvement by establishing a workplace wherein the ethical conduct is the principle
(Kakanda and Salim 2017). The challenges involves the following. Firstly failure to assess
honestly the resources and needs of the organization. Secondly, miscarriage to create strong
foundation. Thirdly, miscarries to establish culture of integrity from top down as well as keeping
values focus in small and big moments. In addition to that miscarries in revising and reevaluating
as required (Shad and Lai 2015). The compliance program and ethics should be vital, integrated
factor of the organization and the manner it is executed guaranteeing the employee have
knowledge regarding how to and feel assisted in their initiatives to advocate compliance and
ethical standards in their performance (Tricker and Tricker 2015). The challenges of good
governance involves ethics violations, lack of transparency, accountability issues, and oversight
issues along with that conflict of interest. The principles of ethics from management theory and
moral philosophy are obtainable to notify interested managers. One of the formidable challenges
is evading immoral management as well as shifting from amoral to moral management method
of leadership, decision making, behavior, practices and policies.

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References
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Graham, J. and Kaye, D., 2015. A Risk Management Approach to Business Continuity: Aligning
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Tricker, R.B. and Tricker, R.I., 2015. Corporate governance: Principles, policies, and practices.
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