Corporate Governance and Risk Management Audit: Scentre Group Analysis

This report conducts a governance and risk management audit on Scentre Group Limited, a shopping center company operating under the Westfield brand in Australia and New Zealand. The audit examines the company's strategies, internal operations, and responses to market challenges, including the impact of Amazon. The report analyzes Scentre Group's promotion of itself to shareholders and stakeholders through annual financial reports, online presence, sustainability policies, and advertising. It also assesses the company's advertised values, including customer satisfaction and sustainability, and how it promotes, monitors, and reviews its value commitments. The report provides an overview of Scentre Group's history, its corporate governance practices, and its commitment to diversity and effective governance. The analysis focuses on the company's internal operations, with a review of its processes and people to understand its approach to governance and risk management.

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Corporate governance and risk management
Author’s Name
Institution
Professor
Course
City and State
Date

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Corporate governance and risk management
The focus of this paper is to conduct a governance and risk management audit on one
organization. The organization chosen is Scentre Group Limited. This is a shopping center
Company with retail destinations. The company does not operate independently but operates
under its parent company Westfield. It uses the Westfield brand in New Zealand and Australia.
Its major obligations include leasing, design, construction, property management, and funds/asset
management. The company also carries marketing activities, which are central to its operations.
Carrying a governance and risk management audit on Scentre Group Ltd will detail how the
company is strategizing to stay afloat especially following the arrival of Amazon in the
Australian market. This auditing will focus on internal operations of the company with a very of
its processes and people.
Overview of Scentre Group
Scentre Group is one business that understands that for it to succeed it has to promote
itself to shareholders, stakeholders. For a business to succeed or to attract shareholders, it has to
continuously promote itself. In their study Petersen, Kushwaha, and Kumar (2015, p.44) found
that the financial decisions consumers are determined by cultural dimensions as well as
marketing communication. Thus, Scentre Group is strategically promoting itself with a few to
influence its customers, who are retail outlets to consider buying their products and services.
There are several ways in which the company promotes itself to shareholders and stakeholders.
Annual financial reports

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Westfield Scentre Group as responsible business releases its financial reports annually.
By doing so, the business is able to inform especially its shareholders its performance.
Shareholders are investors which this company has to report to. For the year ended, 31 December
2018 the company as usually released its financial report. In this report, the joint chairman and
the chief executive officer began with a letter to security holders. In other words, the CEO wrote
this letter in a view to recognize the support of its investors to that point when the report was
released. The letter also underscored the performance of the company, something that is central
to all security holders. In essence, this letter served the purpose of assuring the stakeholders the
commitment of the company going forward to keep the business afloat. Researchers such as
Garcia-Torea, Fernandez-Feijoo, and de la Cuesta (2016, p. 214) analyzed if the board of
directors which the CEO is a member protect the interests of shareholders. In their analysis, it
came out that board of directors is mandated to protect the interest of shareholders. From the
shareholder perspective, it is the sole responsibility of the board of directors to protect the
interest of shareholders and be assured through the board that their interests are protected.
That said, letter of the CEO to security holders was a guarantee to them that their
interests are at the heart of the Scentre Group. Also, the CEO as the top-most leader and manager
at the company is mandated to report to the shareholders because they are the ones that support
the company. Without the support of shareholders, the business risks a collapse because it will
not have resources to run its business activities. Besides, the financial report informs the
performance of the business financially. This is where the shareholder will be interested because
their return on investments will depend on profit. If the profits are high, it means that
shareholders dividends will be revised upwards. Summarily, Scentre Group promotes itself to

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shareholders through its financial reports. These reports influence the investment decisions of
shareholders.
Online presence
Scentre Group Ltd has its websites which it uses to promote itself and keep its
stakeholders updated on its activities. Today, businesses are required to have an online presence
which helps the company communicate all the time to their stakeholders. Organizations without
an online presence in the current business environment are likely to fail. Hence, Scentre Group
through its website communicates to investors, consumers and other people interested in
knowing what they do. The Group’s website is simple, it structured as follow, “About, Investors,
Careers, Our Portfolio, Retail solutions, news and insights” (Scentre Group, 2019). A
stakeholder that will be interested in getting essential information about the company’s history,
investment or career opportunities needs just to browse through this website to get all the
information. Apart from, the website, the organization operates other social media accounts on
Facebook, Twitter, Instagram, and YouTube. The objective of doing this is to promote the
company and establish strong links or connection with stakeholders such as consumers, clients,
and investors.
Policies
Scentre Group promotes itself through sustainability policies. In 2018, the group released
its sustainability report that detailed its commitment to protecting the environment. According to
the company they have been consistent in reporting indicators such as greenhouse gas emissions,
water, energy and waste to affirm their commitments to protecting the environment. From this

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report what one understands is that Scentre Group has sustainability policies that guide and direct
its activities. The sustainability policy captures two main targets, people and the environment. In
this case, the company is promoting itself as committed to the people and at the same time
protecting the environment in which they operate. For the people, the company promotes its
people as concerned about employee engagement, employee retention, and gender
representation. On the environment, the company asserts its commitment to manage its energy
consumption, manage waste and its interest to recycle waste in an effort to manage the
environment. Entirely, the sustainability report communicates the policy the organization has as
far as the environmental management is concerned. It also affirms its commitment to keep its
employees so that they work collaboratively to achieve the organization's goals.
Advertising
Scentre Group creates meaningful connections with its customers through advertising. On
its website, the company has BrandSpace, which it describes as “specialist division of Scentre
Group representing 48 shopping centres across Australia & New Zealand, including Westfield
shopping centres” (Scentre Group, 2019). The BandSpace shows how it has been advertising
itself. According to the Group, they have been able to connect with customer audience through
sponsorship, digital and online, campaign services, promotional and Pop up, and media
advertising (Scentre Group, 2019). The BrandSpace has enabled the company to advertise its
wide range of products and services it offers to customers.
‘Advertised’ values of the Scentre Group

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The Scentre Group believes that their advertised values are what make their DNA and it’s
out of their advertised values that their customers’ consider them “TICK” organization. Scentre
group values customer satisfaction. In every decision that the company takes, the company takes
into consideration the needs and the interest of the customers first. If by any means the
organization finds out that the decision taken will not enhance customer satisfaction, then the
company will reconsider making that decision. As Dumay & Hossain, (2018, p.34) put it in their
research, the most important asset in every organization is the people. That is why customers are
in the center of everything in the Scentre group. Also, the company values sustainability. The
scentre group has shown its desire to achieve a responsible and sustainable business in various
ways. First, the company has created sustainable policies that the company is now using to
promote itself. For example, in 2018, the group released its sustainability report that detailed its
commitment to protecting the environment. According to the company they have been consistent
in reporting indicators such as greenhouse gas emissions, water, energy and waste to affirm their
commitments to protecting the environment. From this report what one understands is that
Scentre Group has sustainability policies that guide and direct its activities. In addition, the
company in 2015 established a sustainable business framework that showed how it’s going to
achieve sustainability. Based on this sustainability framework, the company intends to
participate in volunteer activities by engaging the communities directly. The company intends to
minimize the level of greenhouse gases it emits to the atmosphere and also the amount of waste
generated. In addition, the company also intends to engage its employee by including them in the
decision-making process in the company, ensuring better working conditions and recognizing
them based on their performance. Recognizing the employees has been found to be a key factor
for any organization to succeed according to the research conducted by DATE, (2015, p.2014).

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Scentre Group promoting, monitoring, reviewing, action its value commitments
Even though the Scentre group values curiosity, excellence, integrity, togetherness,
sustainability and customer satisfaction, the company is purely focusing on customer satisfaction
and sustainability. In the research conducted by Date (2015, p.2014), it was established that the
most common indicators that customers use to measure the integrity, excellence and the curiosity
of any organization are customer satisfaction and sustainability. This is the main reason why
Scentre group has focused its attention on achieving customer satisfaction and ensuring
sustainability. This research was furthered by the study by Reddy & Clinton, (2016, p.23) which
established that it's not possible for an organization that does satisfy its customers’ needs and
promotes sustainability to be viewed as an excellent organization. One of the ways that Scentre
Group Company has been able to achieve customer satisfaction is through engaging their
customers directly. The company has a website which it uses to interact with its customers 24
hours a day. Through this website, the customers can rate the services and the products the
company is offering expect the company to act accordingly. On sustainability, the company has
established sustainability policies that it uses to promote itself. These policies have been detailed
in various financial reports that the company has released. Also, the company has a sustainability
framework which it uses a guider in its process of achieving a responsible and sustainable
business.
History of Scentre Group
Scentre Group was founded nearly five years ago following the merger of Westfield
Group and Westfield Retail Trust. In the merger, the business consolidated its operations both in
Australia and New Zealand. To be exact, the merger happened on June 30, 2014. Scentre Group

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was created purposefully to develop, own and manage all shopping centres under Westfield in
New Zealand and Australia (Scentre Group, 2019) This was a strategic decision that sought to
boost the competitiveness of Westfield Group and enhance its business operations. The company
is not independent of Westfield but continues to use the brand of its parent company.
Since its establishment, Scentre Group has been consistent and committed to its
responsibilities. It has been strategic and innovative because that is what the market demands of
it. In nearly five years, Scentre Group has been committed to its corporate governance since it is
the nerve centre of its success. According to the Scentre Group, the board and executives have
been fully aware of their obligations to formulate as well as sustain corporate governance
practices and policies. The board and its executives create policies and practices that are within
the realms of the regulatory environment, and expectations of other stakeholders.
From the analysis of the corporate governance statement, Scentre Group has shown its
unwavering values commitments through advocating effective and efficient corporate
governance. Wang, Chen, Yu, and Hsiao (2015, p. 2232) believe that the corporate governance is
an engine of an organization because it determines the firm’s performance, values, objectives,
and goals. Similarly, at Scentre Group, the company has corporate governance that is vibrant,
innovative and diverse to spearhead the organization. The corporate governance statement, it was
asserted that the Scentre Group’s board of directors and executives operate on the principle of
laying a solid foundation for management and oversight. This is what has guided the company
since it was founded. There are several issues that show this company has maintained its value
commitments for the last five years since its founding.

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The company has also taken serious steps to foster diversity. The corporate governance of
the Scentre Group recognizes that it has a sole obligation of ensuring that it remains true to the
commitment of diversifying its top leadership and management. An organization that diversifies
top leadership, in all honesty, stands a chance to grow rapidly and that is what Scentre Group has
always focused on. In its corporate governance structure, Scentre Group has Board Committees
(that is, the Audit and Risk Committee, the Human Resources Committee and the Nomination
Committee) which is dedicated to including directors with a mix of diversity, experience,
knowledge, and skills. In its pursuit of diversity, the board’s approach is to ensure the company
has a gender representation which in its view is a key performance indicator (Scentre Group,
Corporate Governance Statement, 2018, p.76). At present, the board committees have three
women out of eight directors. This represents a 38 percent representation of women in the
organization’s top leadership and management. Further, the company still remains true to its
diversity and inclusion strategy, which aims at ensuring that it has a diverse workforce that will
propel it to success. According to Scentre Group, Corporate Governance Statement (2018, p.75),
the company commitment is to ensure that the workplace is comfy for everyone to “bring their
whole self to work.”
Scentre Group and CSR
Scentre group’s principle of maintaining corporate social responsibility revolves around
meaningful engagement with their stakeholders. For example, Dumay & Hossain, (2018, p.34) in
their research stipulated that Scentre group is one of the companies that has been consistent in
annual reporting on sustainability performance since 2015. Scentre group reports on
sustainability performance using the Global Reporting Initiative’s G4 (GRI) standard disclosures

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of sustainability reporting guidelines. Through this consistent reporting, Dumay & Hossain
(2018, p.34) believe that Scentre group has shown its willingness to achieve corporate social
responsibility. In addition to this, the sustainability report released in 2018 by the Scentre group
was found to be consistent with the principles of the GRI standards. This is so because the
indicators relating to emission of greenhouse gases, waste generation, energy, and water as
covered in the report by Scentre report were in accordance with the assurance of if EY. Scentre
group believes that the contents of its report were informed by the interest of its stakeholders on
environmental, social and economic performance. This was also supported by the research that
Dumay & Hossain (2018, p.34) conducted and found out that Scentre group’s report contained
the overview of the performance that data across all the four areas of their sustainable business
framework was used in the selected case studies. The four areas of sustainable business
framework of Scentre group include the people, the environment and economic performance. In
addition, the scope of the report by Scentre group covered all the assets that the Group owns and
operates during the reporting period.
According to the research by Date (2015, p.2014) all the operations by Scentre Group are
focused on making their business sustainable. The major operations that are carried by the
company to achieve sustainability include staying connected with the communities and other
stakeholders, the wise use of resources, efficient and safe operation and minimizing waste
production. From these statements, it’s evident that Scentre Group understands and appreciates
the role played by various stakeholders, for example, different communities in which the
company operates in its role to achieve corporate sustainability. That is why stakeholder is in the
heart of every operation of the company.

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From my own analysis, I have found Scentre group to possess the following; first, the
company has invested a lot to achieve corporate social responsibility. The company has not only
invested financial resources but also, time and human resource to ensure that it realizes the
concept of corporate sustainability. For example, the company knows that for corporate
sustainability to be realized, employees will play a vital role. That is why it engages all the
employees directly on matters relating to corporate sustainability. Also, the company ensures that
employees work in a safe and healthy environment and they are well motivated. Apart from that,
the company also understands that there are various stakeholders that are responsible for it to
maintain corporate responsibility. For example, the community, the environment among others.
This is the reason that the company has come up with the sustainability business framework that
encompasses; the people, the environment and the economic performance. Through considering
all these aspects in the sustainability business framework, the company is able to achieve
corporate social responsibility. The consistency that the company has shown in relation to
reporting on sustainability since 2015 also means that the company is focused in achieving
sustainable business. This is so because the company understands that relevant bodies such as G4
are key stakeholders in its pursuit for the corporate sustainability especially given that its those
bodies that establish standards of sustainable operations in various companies and also monitor
them.

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In summary, Scentre Group is clear on its goals and objectives. Its commitment to
managing its properties in the Australian market is steady and focused on countering
competition. The organization is aware that to succeed then its advertised values should be its
DNA. The company operates on values such as curiosity, excellence, integrity, togetherness,
sustainability, and customer satisfaction, with an objective to foster transparency and
accountability in its activities. It also recognizes that the market is competitive; however, it will
strive to counter threats of new entrants like Amazon. Also, Scentre Group is a new company
since it was just established in 2014 and since it is has a competent and committed team it stands
a chance to grow significantly.

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References
Date, F.D., 2015. Insurance Australia Group Limited Preliminary Final Report For The Year
Ended 30 June 2015. Change, 1000, P.2014.
Dumay, J. and Hossain, M.A., 2018. Sustainability risk disclosure practices of listed companies
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Garcia-Torea, N., Fernandez-Feijoo, B. and de la Cuesta, M., 2016. Board of director's
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promote the interests of shareholders and stakeholders?. BRQ Business Research
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Petersen, J.A., Kushwaha, T. and Kumar, V., 2015. Marketing communication strategies and
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