CGRM4000 Case Study: Analyzing Corporate Governance at Focus Logistics

This case study provides an analysis of Focus Logistics, examining its corporate governance practices, sustainability initiatives, and ethical considerations. The study assesses the importance of corporate governance, the significance and challenges of producing a sustainability report, and the benefits and challenges of sound risk management practices for Focus Logistics. It highlights the need for a strong, qualified board of directors, clearly defined roles and responsibilities, a commitment to integrity and ethical dealing, and effective risk management strategies. The analysis also covers the benefits and challenges of sustainability reporting, including enhanced transparency and potential misalignments with company priorities. Furthermore, it explores the advantages and disadvantages of risk management practices, emphasizing the importance of identifying and mitigating potential threats. The case concludes that implementing effective corporate governance, sustainability, and risk management practices is crucial for Focus Logistics to improve its market image, maintain positive investor relations, and achieve sustainable business growth. Desklib provides a platform to access similar case studies and assignments for students.

Corporate Governance
Sustainability and
Ethics

Table of Contents
Introduction.................................................................................................................................................3
Main Body...................................................................................................................................................3
Discuss four practices of corporate governance and the importance of good corporate governance........3
Summarize significance, benefits and challenges of producing sustainability report for focus logistics. 5
Summarize the benefits and challenges of sound risk management practices for focus logistics.............7
Conclusion...................................................................................................................................................9
References.................................................................................................................................................10

Introduction
Corporate governance refers to the rules, regulations, processes as well as practices by
which an organization is controlled and directed. It is the set of practices; rules which are led in
order manage the company. Sustainability is about performing business practices without
harming environment, society as well as the community. It aims to run the operations of
organization in such a manner which is profitable for society and environment as well.
Additionally, ethics is related to follow best practices which are profitable for business entity
(Correa-Garcia, Garcia-Benau and Garcia-Meca, 2020). Main aim of present study is to examine
the corporate governance, sustainability and ethical practices of the business entity. In
consideration of given scenario, focus logistics is being considered for the present study. The
study includes importance of four corporate governance, significance and challenges of
preparing a sustainability report. Further, the benefits and challenges of effective risk
management have also been included in the given assignment.
Main Body
Discuss four practices of corporate governance and the importance of good corporate governance
Build strong, qualified board of directors and evaluate performance: Boards need to
comprise adequate number of directors who are well-qualified, knowledgeable and have strong
business acumen. In addition to this, board members need to be qualified, competent and have
sound knowledge of ethics, integrity. They are required to have sufficient time to fulfill the
assigned work. In order to make such a board, it is required to identify gaps in the ideal
characteristics and qualities of existing directors. Additionally, majority of the board members
should be independent and they do not involve in any direct or indirect relation with
management as it might affect the true & fair judgment (Manning, Braam and Reimsbach, 2019).
Company needs to arrange suitable orientation program in order to educate new board members
regarding their duties, roles & responsibilities. In context of focus logistics, there is absence of
strong board o directors. Majority of board members are family members and close friends.
Rather than fulfilling their duties, they work to fulfill their personal interest.
Define roles and responsibilities: To maintain proper corporate governance, clear line
of accountability needs to establish among chair persona, CEO, board members, management

and executive directors. In this context, a mandate is prepared including duties, roles of each
board member. Certain duties are also delegated to sub-group of directors such as compensation,
nominating, audit and corporate governance committee. Additionally, a position description in
written form is also prepared for board committee, board chair, executive officers and CEO. In
the given scenario, all the parties such as chair persona, CEO, management are well-known with
their duties. However, they are not committed towards fulfillment of their roles &
responsibilities.
Emphasize integrity and ethical dealing: It is the most crucial practice of good
corporate governance. It focuses on maintaining the culture of integrity wherein business entity
deals with different situations in respect of compliances and law policies. For this purpose, it is
required to set code of conduct and appoint a person to look after the effective implementation of
laws and compliances (Adnan, Hay and van Staden, 2018). In the given case study, Mr David,
CFO of focus logistics understands that there is requirement of following ethical and sustainable
practice in order to maintain good reputation among media. Mrs White who is the chair of
company is not in the favor of preparing fancy report on sustainability. It is analyzed that Mr
Jacob who is the COO of company is ready to pay fine rather than spending time on audits and
following compliances.
Engaging in effective risk management: In light of effective corporate governance,
companies need to assess the risk which they might face in future period of time. Here, the risks
related to finance, operation, reputation, environment need to consider by company in timely
manner. Additionally, board is responsible to offer strategic leadership to establish risk tolerance
in the organization. In corporate governance, risk is reviewed constantly in order find the ways to
mitigate such risks. In context of focus logistics, investors are highly concern regarding risk
management approach of company. However, focus is not affected by uncertain situations such
as COVID-19 as they deal in logistics which is essential requirement. According to the view-
point of investors, focus is required to evaluate different types of risks and also needs to prepare
a continuity plan for future betterment.
Importance of good corporate governance

 Effective corporate governance helps to formulate of culture of integrity which leads the
company towards positive performance and sustainable business. In current time,
following corporate governance is important in order to formulate positive image of
business entity among media, society, stakeholders and public.
 In addition, it also ensures the accountability of different members and individuals
working with company. It eliminates the probability of mistakes as each and every
members are well-known with their roles and responsibilities towards company.
 Good corporate governance is the symbol that the organization is well-structured and
managed. It also shows that management prepares significant strategies for betterment of
shareholders. In other words, it provides great edge to organization on its competitors
(Aureli, and et. al., 2020).
 Corporate governance is related to regulations, codes, and practices which shows how a
company is managed. It helps in determining role of all active members, boost internal
efficiency, foster the growth, attract talent and financial capital and develop value for
stakeholders. It plays a crucial role in minimizing the risks and make sure that procedure
of organization is streamlined and consistent.
In context of focus logistics, management of company is not in the favor of corporate
governance. Mrs White who is the chair of organization, thinks that it is time taking to prepare
sustainability report. Other members are also not likely to follow the corporate governance
practice. However, the company will get huge benefit in terms of improving market image and
reputation by following effective practices of corporate governance. In addition to this, it will
help them in maintaining positive relations with investors who always demand for transparency
and sustainable report. According to COO of focus logistics Mr David, they can maintain
positive reputation of business entity.
Summarize significance, benefits and challenges of producing sustainability report for focus
logistics
Significance of producing sustainability report
Sustainability report is report which helps a company to understand the impact of their
activities on environment and society. It facilitates transparency in terms of opportunities and
risks. It is the key platform by which sustainability impact and performance can be

communicated (Hussain, Rigoni, and Orij, 2018). In context of focus logistics, management of
the organization is not in favor of preparing sustainability report as they think it as a tedious
process. Benefits of sustainability report in context of the respective company are mentioned
below:
 In focus logistics, sustainability report will enhance the transparency in business. With
this, investors will be able to get all the necessary information related to the company
which will help in taking suitable business decisions in an efficient manner. It will bring
transparency that will assist the relevant parties to take better decision for further
enlargement.
 Through the case study analysis, it is identified that focus logistics is planning to expand
business in upcoming years. For this purpose, they need to maintain positive association
with stakeholders. In this situation, sustainability report will provide significant
information to investors which is crucial in order to maintain their trust in business.
 Additionally, sustainable report will prove beneficial for company in terms of enhancing
the understanding regarding opportunities and risks. With the report, organization will
able to assess the opportunities of future growth. In addition to this, they will also able to
evaluate the risks associated with the opportunities.
 Producing sustainability report will help focus logistics in streamlining the process,
reducing the cost and improving overall business efficiency.
Challenges of producing sustainability report
In focus group, they do not have favorable approach towards sustainability. They use
large trucks for the purpose of business which generates enormous pollution. It is identified that,
preparing sustainability report is really time taking process for a large company like focus
logistics. Apart from this, some other challenges of producing sustainability report are mentioned
below:
 The major problem of sustainability report is the misalignment with priorities of company
(Naciti, 2019). Here, focus group is looking forward for expansion. Also, they are
looking to get funds for the purpose of expansion. In contrary, sustainability report aims
to follow the sustainable practices such as minimizing the use of fuel, reduce down

emission and use of chemicals. In context of focus logistics, they are working in the
logistic business wherein they use numerous trucks on daily basis to transport goods. This
misalignment between vision of business and sustainability report is a major challenge.
 In context of focus group, it is perceived that producing sustainability report is really time
taking and they also do not see any clear benefit to prepare such report. They need to
devote huge time as well as efforts in order to prepare such report.
Summarize the benefits and challenges of sound risk management practices for focus logistics
Risk management is the process of identifying, assessing as well as controlling threat to
company in terms of financial, operation, industrial and other perspectives. Each and every
business entity works in an uncertain environment. They face unexpected risk which hamper the
profit of company and even sometimes lead the business towards closure.
Benefits of risk management practices
 In context of focus logistics, risk management helps organization in order to identify the
potential risks which might occur in future period of time. The risk management practice
will help organization to avoid the potential threats in an efficient manner. It will bring
certainty in business and help to attain pre-defined goals.
 With risk management process, it is possible for focus logistics to identify the risk. Once
the risk is identified, they can easily formulate suitable strategies to mitigate the risk
(Rashid, 2018). In addition, risk management will also provide company a sound ground
to take effective decisions.
 Risk assessment is one of the best ways to address the uncertainties. For focus logistics,
proper risk management plan will bring the potential risk at minimum level. It will reduce
down the contingencies and facilitate the growth & success of business entity in an
efficient manner.
Challenges of risk management practices
In focus logistics, management does not have a proper risk management plan. This is a
reason of negative attitude of investors. They do not consider that it is important to prepare a
risk management plan. In context of this, certain challenges faced by company are outlines
below:

 Risk management is a really time taking process. In order to prepare risk report, focus
logistics need to collect the data (Li, 2018).
 . Here, company is working at large level. In this situation, collection of data will be time
taking process. It is also possible that they might get fail in gathering the reliable
information which will have direct impact on reputation of the respective business entity.
 The most crucial challenge of risk management is the lack of expertise in analysis.
However, there are ample of compute softwars and tools have been developed for this
purpose. Nevertheless, the simulation events developed by computers might have
negative impact on organization. In addition to this, there is need of skilled and well-
trained employees to understand the complex process of risk management. In reference of
focus logistics, it is a forerunner company and staff of the organization is not well-
trained. Hence, they might face issue in effective implementation of risk management
practices.

Conclusion
It is concluded out of the above-mentioned information that it is important to follow the
practices of corporate governance, sustainability and ethics. The above report evaluates practices
of corporate governance in reference of focus logistics. It is analyzed that implication of
corporate governance is important in order to maintain positive reputation of entity. Additionally,
producing sustainability report and risk management plan is crucial in order to maintain effective
business process.

References
Books and journals
Adnan, S.M., Hay, D. and van Staden, C.J., 2018. The influence of culture and corporate
governance on corporate social responsibility disclosure: A cross country
analysis. Journal of Cleaner Production, 198, pp.820-832.
Aureli, S., Del Baldo, M., Lombardi, R. and Nappo, F., 2020. Nonfinancial reporting regulation
and challenges in sustainability disclosure and corporate governance practices. Business
Strategy and the Environment, 29(6), pp.2392-2403.
Correa-Garcia, J.A., Garcia-Benau, M.A. and Garcia-Meca, E., 2020. Corporate governance and
its implications for sustainability reporting quality in Latin American business
groups. Journal of Cleaner Production, 260, p.121142.
Hussain, N., Rigoni, U. and Orij, R.P., 2018. Corporate governance and sustainability
performance: Analysis of triple bottom line performance. Journal of Business
Ethics, 149(2), pp.411-432.
Li, Z.F., 2018. A survey of corporate social responsibility and corporate governance. In Research
Handbook of Finance and Sustainability. Edward Elgar Publishing.
Manning, B., Braam, G. and Reimsbach, D., 2019. Corporate governance and sustainable
business conduct—E ffects of board monitoring effectiveness and stakeholder
engagement on corporate sustainability performance and disclosure choices. Corporate
Social Responsibility and Environmental Management, 26(2), pp.351-366.
Naciti, V., 2019. Corporate governance and board of directors: The effect of a board composition
on firm sustainability performance. Journal of Cleaner Production, 237, p.117727.
Rashid, A., 2018. The influence of corporate governance practices on corporate social
responsibility reporting. Social Responsibility Journal.
Online
The Top 5 Corporate Governance Best Practices That Benefit Every Company, 2014. [Online].
Available through: https://www.mcinnescooper.com/publications/the-top-5-corporate-
governance-best-practices-that-benefit-every-company/ >
The Importance of Corporate Governance. [Online] Available through:<
https://sprigghr.com/blog/board-management/the-importance-of-corporate-governance/ >

What is Sustainability Reporting. [Online] Available through:<
https://ecovadis.com/glossary/sustainability-reporting/ >