Analysis of Corporate Governance and Ethics at Galaxy Resources Ltd

This report provides an analysis of the corporate governance and ethical practices of Galaxy Resources Limited. It begins with an executive summary highlighting the importance of ethics and governance in maintaining core values, ensuring stakeholder interaction, and promoting business sustainability. The introduction outlines the report's purpose, which is to examine Galaxy Resources' corporate governance through an analysis of its annual report, focusing on board composition, orientation, and the application of legitimacy theory. The report then delves into an introduction of the company, detailing its founding, operations, and projects in lithium mining. A summary of the company's corporate governance, including the composition of the board, the roles of independent and non-independent directors, and the chairperson's responsibilities, is provided. The remuneration report, detailing the salaries and benefits of the directors and executives, is also included. Furthermore, the report examines the board orientation, including shareholder-agency, shareholder-stewardship, stakeholder-managerial branch, and stakeholder-ethical branch. The report concludes by summarizing the key findings and insights into Galaxy Resources' approach to ethics and corporate governance.

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GALAXY RESOURCES LTD
Ethics and governance
10/3/2019

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Executive Summary
Corporate governance and ethics are the rules and regulations of the company which
helps in maintaining the core values. If any decision has to be taken in the company then ethics
helps in setting the principles what is right or not. The corporate governance also helps in
interacting with the stakeholders of the Galaxy Resource Limited and also ensures a good
reputation and the sustainability of the business. In this report the commercial power of the
company has explained and the composition of the managers in the company has explained with
their remuneration. It has been evaluated that the position of the company in the market is stable
and they have maintained their reputation by becoming the leader of the mining company. They
are operating the company in an appropriate way that also helps the company in preventing from
any fraud and error.

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Contents
Introduction.................................................................................................................................................3
Introduction to the company........................................................................................................................3
Summary of the CG of the company...........................................................................................................4
Board Orientation........................................................................................................................................6
Legitimacy Theory....................................................................................................................................10
Conclusion.................................................................................................................................................11
References.................................................................................................................................................12

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Introduction
The report is prepared in regards to the ethics and the corporate governance of the
company so that the rules and laws through which the company has to comply can be analyzed.
The purpose of this report is to get information on the corporate governance of the company
Galaxy Resources Limited. In this report the research will do the annual report of the company
Galaxy Resources Limited so that the board composition and the orientation can be analyzed. In
this report the interpretation of the company Galaxy Resources Limited had also done using the
theory of Legitimacy. The ethics and the governance in the company are very essential as it helps
in satisfying the investors and the shareholders of the company. Corporate governance represents
the true and fair report in an ethical manner which helps in taking the right decisions of the
company. Corporate governance is the rules whose main purpose in the company Galaxy
Resource Limited is to ensure whether the fairness, transparency, and accessibility are
maintained or not. The company prepares corporate and governance so that the frauds which
occur in the company can be reduced and ethics can be maintained in the company.
Introduction to the company
Galaxy resource-limited is the mining industry which was founded in the year 1996. The
company was headquartered in Applecross, Western Australia. The company basically deals
with products like Lithium, hydroxide, carbonate, Spodumene, etc. The company is listed on the
Australian Securities Exchange and has a project of mining in Australia, Argentina, and Canada.
The company has announced its merger with its joint venture company in the year 2016. There
are many projects of the company which is at the development stage such as James Bay Lithium
Pegmatite Project and the Sal De Vida Lithium brine project (Chan, et al., 2014).
The company also operates the mine at the Western Australia Ravens Thorpe for the Mt
Cattine Spodumene Tantalite. On 29 May 2018 the company has agreed to sell to South Korean
conglomerate on the Hombre Muerto for the US $280 million. The company has still maintained
reserves for the project of the Sal de Vida of 4.09 million tones and original reserves of the 1.14
million tons from the sales (Galaxy Resource Limited, 2018).

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The company is working on three projects recently which were producing lithium, hard
rocks mines and brine assets. The company produces lithium at 60% from the project of the Sal
de Lithium which was based on low-cost carbonate production. The compounds of the Lithium
are used in the manufactures of glass, ceramics and consumer electronics (Jizi, et al., 2014). The
compounds of lithium are important for the cathode material as it helps the company in
becoming the main manufacturer of lithium goods. The company Secretary of the company
Galaxy Resource Limited is John Sanders and the Chief Financial officers I the Alan Rule. The
registered office of the company is Level 4, 21 Kintail Road.
The ABN of Galaxy is 11 071 976 442 (Galaxy Resource Limited, 2018). The company
has the one executive director which is Anthony Tse and the one independent non-executive
chairman which is Martin Rowley. The company has the four non-executive directors which
manage the functions of the company in an effective way which are John Turner, Alan
Fitxpatrick, Florence Heredia and the Peter Bacchus. The company also has some senior
management in the company which is also moderating the functions of the company. The chief
executive officer of the company is Ismon Hay. Alan Rule is the Chief financial officer of t eh
galaxy resource-limited. The company also has the corporate development director which is Nick
Rowley. The chief operating officer of the company is Brian Talbot (Klettner, et al., 2014).
The corporate governance of the company is good as they are committed to the practices
and the principles of the corporate governance guidelines which were authorized by the Board of
the Directors. Corporate governance of the Galaxy resource-limited helps the company is
operating, controlling and regulating the rules and the laws of the business. The position of the
company is stable in the market as they are earning enough money so they can operate the
business functions easily (García-Sánchez, et al., 2015).
Summary of the CG of the company
The composition of the board defines the several requirements and needs of the company.
The board also defines the ratio relates to independent and non-independent directors. The
composition defines the proper ratio of the dependent and independent directors. The ration of
the independent directors and dependent directors is 4:1 that defines that the one is independent
directors of the company and four are dependent directors. The independent director of the

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company is Martin Rowley and the non-independent directors are Anthony Tse, Peter Bacchus,
Alan Fitzpatrick, and John Turner. The chairperson of the company is Martin Rowley and he is
an independent director of the company who is overall independent in the business and takes
their own decisions in the organization (Hong, et al., 2016).
The chairperson report included the various financial statements and financial analysis
included in the overall process of the organization. The organization changes from mining
exploration to mining production. The report of the chairperson shows the financial position of
the country (Khan, et al., 2013). The Chairman shows that the returns of the shareholders arise
several opportunities for the company. As per the report, it has been determined that the new
lithium projects increase the overall production of the organization. The hard rock sector of the
organization gives several advantages to the organization and as per the chairperson report, it has
been analyzed that the market of the organization and delays in the demand affect the overall
financial analysis of the company and these process directly affects the overall position of the
organization. By the various programs undertaken in the company defines that the overall
strategies made by the executive directors. The process all makes a system proper relationship
with the customers and enhances the business process. The report includes the overall discussion
related to the financial analysis of the company (Jin, et al., 2013).
Road Map

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The remuneration report includes the salary structure of the directors and executive
relates to the company. The remunerated report includes a explanation of the managerial and
non-executive directors. The cash salary of Peter Bacchus is US$ 100,000 (Galaxy Resource
Limited, 2018). The share-based payments are 79,676 and the performance-related payments are
44.3%. The other non-executive director is Florencia Heredia whose salary is also included in
100,000 US$. The performance-related payment is not included in this process. The chairperson
is Martin Rowley whose salary is 300,000 US$ and his salary includes more benefits that is
monetary benefits 2,996. The options are 637, 411. So the total salary is 940, 407 and the
performance-related is 67.8% (Galaxy Resource Limited, 2018). This remuneration report is
very important and it defines the overall related process of the non-executive directors. The other
non-executive director is John Turner whose salary is 100, 000 and the several benefits are
included that is performance-related benefits and other benefits. These benefits increase the
salary approx. 100, 000. The overall report of remuneration defines the overall process of the
organization and it maintains the balance of the organization. Balance defines the overall benefits
of the organization.
Board Orientation
Board orientation is the process that provides the report regarding the roles and
responsibilities of the board and also provides important information to the company. The major
role of the directors in the company is to direct and make the strategies in the company so that
overall business can run in an effective way. The directors also hire the CEO in the company
which is responsible for operating the daily functions of the company. The main function of the
board of directors in the company Galaxy Resource Limited is to enhance the long term
stockholders' value and to review the goals of the company (Hong, et al., 2016). The board of
directors in the company acts in an honest and fair manner and has the responsibility to govern
the functions of the company in an appropriate manner. The board of directors of the company is
well qualified and has good skills which help them in operating the functions of the company.
Orientation Broad Composition Broad Focus
Key
communications
Shareholder-Agency The major shareholders The broad focus The profit of the

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are the owners of the
company. In the
company, there is the
independent director
which is included in the
composition of the board
directors (Arora and
Dharwadkar, 2011).
of the
shareholders in
the company is
on the profit of
the company by
increasing the
revenues of the
company. They
want the growth
and the
development of
the company so
that the
operations of the
company can be
run in an
effective way.
The
shareholders
also want higher
dividends from
the company so
that they can get
something in
return for their
investment
(Klettner, et al.,
2014).
company can be
analyzed through the
financial report of
the company. In the
income statement of
the Galaxy Resource
Limited the gross
and the net profit
earned by the
company can be
evaluated. The
equity of the
company can also be
ascertained by the
shareholders in the
equity report of the
company (Khan, et
al., 2013).
Shareholder-
Stewardship
Most of the shareholders
are non-independent
The board focus
of these
The internal position
of the Galaxy

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which knows how to
operate the functions of
the company. The assets
of the company are
properly managed by
them so that the company
can be run in an effective
way.
shareholders is
on the internal
growth of the
company. They
want that the
company should
have enough
money to
operate its
functions on
time. Capital
management
should be proper
so that growth
can be enhanced
in the market.
Resource Limited
can be analyzed
through the report of
the chairperson, cash
flows and the
balance sheet of the
company. The
inflow and the
outflow of cash help
in evaluating how
much cash the
company has
(González, et al.,
2016).
Stakeholder-
Managerial Branch
The composition of these
shareholders in the
company is major
independent which was
appointed to satisfy the
most powerful
stakeholders.
To manage the
internal and
external
functions of the
company, the
powerful
stakeholders in
the company are
appointed so that
the operations of
the company can
be managed in
an effective
manner.
There is no such
report to analyses
this so it is voluntary
disclosures and puts
the focus on the
internal and the
external
environment impact.
Stakeholder-Ethical The diversified The board focus The corporate social

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Branch stakeholders are taken
into consideration for the
composition of the board.
In this shareholders
majorly are independent.
is on the
management of
the stakeholders.
All the function
of the company
is conduct in the
manner or not
and whether the
company
complies with
the rules and the
principles of the
company are
focused.
responsibility report
of Galaxy Resource
Limited is analyzed
to evaluate whether
the company is
functioning in an
ethical manner or
not (Jin, et al.,
2013).
Resources The composition of the
resources should be the
mixture of both the
things which are
independent and non-
independent directors as
resources of the company
flows with both the
skills.
External:
resource flow
management,
capital
management
(Fan and Wong,
2015). The focus
is on the
providers of
resources. The
major focus of
the resources has
been put on the
external
resources of the
company such as
the competitors,
The resources of the
company can be
analyzed through the
needs of the
company so it can
be communicated
through the needs of
the consumers.

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customers, etc.
The
management of
the capital
should be focus
as it helps in
analyzing the
flow of cash in
the company.
There are two theories which are very suitable for the corporate governance and for the
board orientation in the company. The main goal of the stewardship governance is that it takes
care and protects the needs of the other people. The interest of the shareholders and the owners
are protects by the company executives and the directors so that effective decisions can be made
by the company. The main goal of the board orientation is to work in the effective manner that
the shareholders of the company get satisfied. There are basically three elements of the board
orientation which helps the Galaxy resource limited in making their board. First the company has
analyzed the historical contact so that past decisions can be taken. A board orientation also
reviews the policies and procedures of the company which helps in outlining the successful
company. The board members should also give them enough time in the company so that they
can know each other and make some contact with each other. When the new board orientation is
made the time is given to know each other so that effective working can be done in the company.
Legitimacy Theory
This is a very useful theory for the company Galaxy Resource Limited and mechanism
supports the organization in executing the overall process and emerging volunteer communal and
ecological disclosures. The social contract is fulfilled in the overall process of this theory (Milne
and Patten, 2002). This process can achieve several objectives of the Galaxy Resource Limited.
The actions of the company entity are discussed in this overall process and it increases the social

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awareness in the organization. The Galaxy Resource Limited company uses this theory and
maintains all the processes in the organization. The disclosures can be successfully implemented
in the company by using this particular mechanism. The process of this theory can manage the
social contract. The article given by the Deccan describes this theory in the organizations as it
improves the overall social contract in the business. With this process, the social issue can be
maintained and create organizational legitimacy (Schneider and Scherer, 2015).
Contemporary trends and several social and environmental processes of the Galaxy
Resource Limited are included. The motivation distractions are also included in this theory,
which enables the organization to maintain the environmental and social issues. The legitimacy
theory helps to maintain the motivation distractions and the different operations of the Galaxy
Resource Limited. The managerial decisions are also impacted by this theory as the managers
take the decisions as compared to the other process and take the social issues into consideration.
The manager’s decisions are largely impacted by the legitimacy theory and it manages the
behavior of the managers (Deegan, 2012). The SAR research is all about the aspects of the social
and environmental disclosures included in the company. Social disclosure is one of the essential
parts of the company, which managed the overall process of the organization and increases the
vulnerability in the company. The CSR is also used in managing social disclosure. This can
maintain the Galaxy Resource Limited communal presentation of the company and shows the
mutual interaction of the performance and disclosure.
The higher social disclosure makes higher social disclosure in the Galaxy Resource
Limited. The social performance and social disclosure affects the overall process and increases
the disclosure process in a specific company. This process gives several impacts on the
organization and makes it financially stable. Several practical implications are also generated due
to social disclosures (Amran, et al., 2014). The internal and external environments are managed
properly by maintaining all this process and manage the decisions of the managers related to the
disclosures and performance of the Galaxy Resource Limited. Responsive and effective
initiatives are included in the process. The external environment is generated in the overall
process of the disclosures. The decisions can be managed properly in the company by using the
legitimacy theory (Rodriguez-Fernandez, 2016).

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Conclusion
From the above report, it is evaluated that corporate governance and ethics are very
essential in the company Galaxy resource-limited as it helps in managing the operations of the
company in an ethical manner. Ethics help in telling what is right in the company or not and they
are indulged in the mining industry and they are operating the three projects so they require
proper rules, laws, and principles which help in conducting the things in the company in an
ethical manner. In this report the explanation of the company has been given that what they are
operating and how they function. The financial position of the company in the market is good
and their board composition is also explained. In this report the yearly report of the Galaxy
Resources has studied properly so that board orientation can be done. The company has good
board composition and their corporate governance is also very effective which helps them in
operating the function of the company in an effective way.

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References
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Chan, M. C., Watson, J., & Woodliff, D. (2014). Corporate governance quality and CSR
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