Corporate Governance Analysis: Bellamy's Australia & Myer Company

This report provides an analysis of the corporate governance practices of Bellamy's Australia (BAL) and Myer. It begins by examining corporate governance through the lens of agency theory, focusing on how BAL and Myer's board compositions, including the presence of independent directors and board committees, aim to minimize agency costs and protect shareholder interests. The report then analyzes Myer's corporate governance, highlighting the role of independent directors, the AFR committee, and disclosure policies in ensuring transparency and minimizing information deficits. The report also explores the adherence of BAL and Myer to the ASX Corporate Governance Council Principles, assessing the impact of these principles on company performance and risk management. Furthermore, it discusses the application of stakeholder theory, emphasizing how both companies consider the interests of various stakeholders in their decision-making processes. The report concludes by highlighting how prudent corporate governance enhances organizational performance, minimizes risks, and ensures long-term sustainability for both companies.

Corporate Governance
BAL & MYR
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Corporate Governance
Question 1
BAL Corporate Governance
In accordance with the agency theory of corporate governance, the prudent corporate
governance policies tend to ensure that the agency costs are minimised by ensuring that the
interests of the stakeholders are safeguarded (Shailer, 2004). The corporate governance
policies of the company ensure the same. This is ensured by the composition of the board
which consists of only one executive director and five non-executive directors. Since the
majority of the directors are non-executive and independent, hence the interest of the
minority shareholders could be expected to be safeguarded. Further, there are board
committees concerned with audit, remuneration and risk management headed by independent
directors which ensures that internal processes are ethical. Also, there is a continuous
disclosure policy which ensures that management provides a reasonable estimate of business
in the future and also material information is released in public domain at the earliest. All
these ensure that the shareholders are well informed (BAL, 2017).
Myer Corporate Governance
Sound corporate governance practices ensure that there is minimization of agency costs
which are especially significant in case of small investors who have limited resources (Farrar,
2005). The composition of board is significant in this regard since the board of directors is
headed by an independent and non-executive director. Further, barring and CEO and MD, all
the other members of the board are non-executive. In order to ensure corporate disclosure
integrity, the AFR committee is put in place. Besides, there are declarations by the CEO and
CFO which are critical in this regards. Besides, the company also has a constant disclosure
policy and there is a committee to this effect which ensures that key information is
disseminated to the shareholders. Additionally, the company takes measures such as investor
relations program, investor centre coupled with meetings with shareholders on a constant
basis which allow information deficit to be minimal (Myer, 2016).
Question 2
BAL Corporate Governance

Corporate Governance
It is apparent from the corporate governance statement of the company that ASX CGX
principles have been adhered to. This tends to have a positive influence on the performance
of the company. This is because owing to the composition of board in line with ASX CGX
principles, the likelihood of corporate fraud tends to decrease (Farrar, 2005). Additionally,
there are various internal committees which tend to aid the performance. One of these is the
audit and risk management committee which tends to ensure that various proactive measures
are undertaken to manage various risks and ensure that reporting is accurate. Further, the
remuneration committee headed by non-executive director ensures that incentives are created
for management which are performance linked (BAL, 2017). Thus, the compliance with
CGX principles ensures that the interests of the stakeholders are served in line with
stakeholder theory which also enhances performance and sustainability over the long term
(Shailer, 2004).
Myer Corporate Governance
In accordance with stakeholder theory, it is imperative that the business decisions must be
taken while considering not only shareholders but also stakeholders. This ensures that the
business is sustainable in the long run and also creates positive brand equity. Adherence to
the ASX CGX principles tends to enhance the overall performance of the organization
(Shailer, 2004). This has been enabled by the organization by ensuring independence of the
board of directors and also through the presence of various internal committees which
prevent frauds. Also, with the presence of independent non-executive directors, the decision
making is not linked only to the interest of the shareholders but considers wider stakeholders
(Myer, 2016). Prudent corporate governance norms ensure that organization risk is kept under
check which ensures that lenders and creditors interest is safeguarded. Besides, sound
corporate governance practices ensure a stable internal working and thus enhance the overall
performance (Farrar, 2005).

Corporate Governance
References
Bellamy’s Australia Limited, (2017) Corporate Governance Statement. [online]. Available at:
http://investors.bellamysorganic.com.au/media/74a26ca1/Corporate%20Governance
%20Statement%20BAL%20190816.pdf [Accessed 12 Aug. 2017]
Shailer, E.P.G. (2004) Introduction to Corporate Governance in Australia (3rd ed.). Sydney:
Pearson Education Australia.
Farrar, H. J. (2005) Corporate Governance: Theories, Principles and Practice (2nd ed.).
Oxford: Oxford University Press.
Myer, (2016) Corporate Governance Statement. [online]. Available at:
https://www.google.co.in/search?
q=Myer+corporate+governance&rlz=1C1RLNS_enIN757IN757&oq=m&aqs=chrome.4.69i5
9j69i60l3j69i59j69i60.3938j0j7&sourceid=chrome&ie=UTF-8# [Accessed 12 Aug. 2017]