Corporate Governance and Risk Management Report: Wesfarmers Analysis

This report provides an in-depth analysis of corporate governance and risk management practices at Wesfarmers, an Australian conglomerate. It begins with an overview of the organization, its financial performance, and operational divisions. The report then examines Wesfarmers' advertised values, including integrity, accountability, and entrepreneurial spirit, and assesses its value commitments. A key focus is on corporate governance, including risk management strategies, stakeholder perspectives (employees, investors, and consumers), and CSR considerations. The report also discusses the company's dividend policy, financial reporting, and the importance of maintaining organizational integrity. The analysis highlights the significance of aligning advertised values with actual practices to ensure stakeholder satisfaction and long-term business sustainability. The report concludes with an overview of the company's governance and risk management frameworks and the importance of ethical conduct.

CORPORATE
GOVERNANCE AND
RISK MANAGEMENT

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY ..................................................................................................................................1
1. Give an overview of an organisation.......................................................................................1
2. Clearly state the ‘advertised’ values of the organisation.........................................................2
3 Organisation’s value commitments ..........................................................................................3
4. Corporate governance .............................................................................................................4
4. Key stakeholders in context to the views about company.......................................................5
6. Conclusion in context to the integrity of organisation.............................................................6
7. Organisational integrity and organisational hypocrisy ...........................................................6
CONCLUSION ...........................................................................................................................7
REFERENCES ...............................................................................................................................9

INTRODUCTION
Corporate governance is the system which have certain rules, regulations and procedures
which a firm is managed and controlled. It emphasis to make balance in context to the interest of
corporation's stakeholders such as: suppliers, senior management executives, financiers and
community etc. As risk management is the procedure which is helpful to measuring, identifying
and controlling threats in order to achieve the goals of firm. By following the principles of
corporate governance management risk can be reduce so that business operations can be perform
effectively. To better understand this Wesfarmers has been chosen which is an Australian
conglomerate company and engaged in the business of chemical, fertilizer, coal mining,
industrial & safety products. There are various topics has covered in this report such as:
advertised values of the organisation, process the organisation has in place that promote,
monitor, review, actions its value commitments, corporate governance and CSR understanding
and key stakeholder views about the business of firm. Apart from this, report also discuss about
mini audit in context to the corporation.
MAIN BODY
1. Give an overview of an organisation
Wesfarmers is belongs to Australia and it generates majority of revenue from the
supermarkets & grocery stores. In the financial year 2018 the net profit after tax $1,197 million
and it has 217000 workers which are engaged in the business activities of firm. The operations of
firm has divide into:
Retail: This specific division has a range of operations from departments stores to
hardware & office supplies and it has various brands such as: Bunnings, Kmart etc.
Industrials: Chemicals, Energy & Fertilizers, industrial and safety products.
Others: Coles, Flybuys, investment banking and private equity investment etc (Harjoto
and Laksmana, 2018).
To promotes the value of shareholders it emphasis to deliver satisfactory returns to
shareholders so that they make more investment in the business of firm. For that purpose there as
various official documents are required such as: balance sheet, income statement, cash flow
statement etc. With the help of these documents financial position of Wesframers can be analyse
which is helpful to take better investment decisions. As the dividend policy considers available
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franking credits, current and future cash flow requirement & targeted credit metrics. Under this
policy board has declared 120 % dividend per share. As the dividend has receive in the form of
equity and management has decided to continue the operations of dividend investment plan.
Wesfarmers has emphasis to follow the specific procedure to mitigate the risk which involves
physical risk and transaction risk. For that purpose they identify the nature of risk and find the
main cause behind it and after that manager take appropriate actions in order mitigate the risk so
that business operations can perform effectively. To attract the investors advertising has made by
company so that maximum number of persons can aware the plans, policies, products services of
the company. By making advertisement Wesfarmers has emphasis towards business operations
& development plans for shareholders value creation through portfolio management. New
project development plans and policies related to a future project has also considered while
advertising. While making policies it focuses to provide satisfactory returns to the shareholders
by fulfilling the corporate governance obligations which are associated with the company (Cohen
and Wright, 2017).
2. Clearly state the ‘advertised’ values of the organisation
Advertised values are the functions of stating specific corporate values is to attract
workers with a similar value and it emphasis towards the importance of integrity as a value. In
this regard the main objective of Wesfarmers to provide satisfactory returns through financial
discipline. The business model of firm comprises of core values of integrity, accountability &
entrepreneurial spirit. For that purpose corporate governance strategies are also review which
involves risk management framework which involves following things such as: Group code of
conduct, to establish proper reporting lines which describes roles & responsibilities of each
member who work in the corporation. As the top level management make sure that the decisions
which are taken by it are consistent with the core values of organisation. Advertised values are
also emphasis in order to achieve the goals of firm. There are various strategies which are made
for value creation and these are as follows: looking for growth opportunities in context to
entrepreneurial initiatives, to ensure sustainability with the help of long term strategic
management. To give strength the value via operating excellence & fulfilling desires of
consumers and to strength the portfolio by value adding transactions so that investors can get
more returns for their investment value (Mohammed and Knapkova, 2016).
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The core advertised value has emphasis towards integrity, accountability, openness and
entrepreneurial spirit. The unclarity is that the strategics for value creation does not involve the
detail procedure that how values will be created in order to achieve the goals of corporations. In
this regard it is important for the Wesfarmers to make proper plans and policies in context to the
advertised value so that interest of stakeholders can be protected and they get higher returns on
the investment. So in this area organisation have to work and it also helpful to perform the
business activities effectively (Eckert, 2017).
3 Organisation’s value commitments
As the corporation's value commitment plays an important role in order to achieve the
goals of business entity and it is important for the Wesfarmers to provide value to the consumers
by providing quality products and services so that needs of individuals can be satisfy as because
they are the market king and purchase the products of firm and if more number of persons will
purchase the products and services of company than its profitability will be enhanced. As a result
business will expand and grow and it provide help the corporation to achieve predetermined
objectives. To sustain in the dynamic business environment it is important to promote, monitor,
review and action its value commitments. For that purpose Wesfarmers has set the aim which is
to provide satisfactory returns to the shareholders so that more number of investors will show
their willingness to make investment in context to the business of company. In this regard
organisation's value commitments are to make integrity, accountability, openness &
entrepreneurial spirit.
As integrity is the term which emphasis to become honest & present a consistent
attachment to strong moral as well as the ethical values & principle. For that purpose it is
important to make integration with the consumers by satisfying their demand by fulfilling their
expectations. In context to the corporate governance and risk management it is important for the
Wesfarmers to make accountable in context to the blameworthiness and accountability. As
openness denotes that company will accept the changes which are beneficial for the business
growth and help the firm in order to achieve its targets. Entrepreneurial spirit denotes that
organisation is able to take risk so that higher profits can be generated and it can sustain for a
long term in the market. So these are main value commitments of Wesfarmers but it focuses only
entrepreneurial spirit which says that it emphasis to generate higher profits by taking risk so that
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it can become leader and can grab more market share which support the corporation growth
(Neifar and Jarboui, 2018).
4. Corporate governance
As the term corporate governance is the set of different rules, regulations and procedures
through which the business of an organisation can managed and controlled. For that purpose it is
required for Wesfarmers to protect the interest the different shareholders such as: government,
suppliers, consumers & shareholders etc. As the term CSR states the commitment to manage
environmental, social & economic influence in context to the operational responsibility of the
business entity. From the last five years Wesfarmers has emphasis towards corporate governance
which involves risk management. In this regard, organisation has focuses to analyse and
measuring the financial & non financial risk so that business can perform better and achieve the
growth as per the predefined objectives (Khan and Yoon, 2016).
For that purpose the manager of company has ensure that compliances are followed or
not as per the requirement. It also engage the investors in context to the wider investment
community with facilities to access all relevant information and data so that shareholders can
take sound decision and get higher returns on their investment. To follow the corporate
governance it emphasis towards governance policies and provide all information which involves
board & committee characters, group policies and corporate governance statements. As the major
value commitment of organisation is towards corporate governance. There are various areas
which are more emphasised such as: to formulate the strategies to which focuses to identify the
areas of underperformance & reposition the portfolio in order to provide more returns to the
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investors. To measure and review talent management & development. To make better plans and
policies so that it can make long term influence towards the shareholders and they get more
returns through value creation. To frame better strategies for the improvement of corporate
governance system of Group's.
The policies regarding corporate governance are formulated by the board of directors of
Wesfarmers which board of committees members and chief executive officer and they are also
ensure that rules and regulations are followed properly or not. As governance & risk
management auditing is a procedure that assess internal & external consistency of a corporation's
value base (Brustbauer, 2016).
4. Key stakeholders in context to the views about company
Key stakeholders are the individuals which are directly or indirectly related to the
business of Wesfarmers. It is important for an organisation to make better plans and policies
which are favourable for the stakeholders and they can get benefited. To protect the interest of
stakeholders it can make better strategies which are beneficial for them. There are various
stakeholders which are associated with the business of company and these are as mention below:
Employees: The persons which work for the company in order to achieve the
organisational goals are known as employees. As Wesfarmers have more than 217000 employees
in the financial year 2018 and as per their of employees, company provide better work place and
emphasis to provide healthy working environment so that they can perform better and
accomplish the targets within stipulated time period. They are satisfy with the organisation
because it protect the interest of workers and for extra work company also provide monetary and
non monetary benefits so that they feel motivated and can perform better in order to achieve the
goals of business.
Investors: These are the persons who make investment in the business of organisation
and as per the views of investors company has emphasis to make provide better strategies so that
they can get more returns. As Wesfarmers has make policies to provide maximum returns to the
shareholders so that they can attract towards the business of firm and make more investment in
order to get higher returns (Elghuweel and et. al., 2017).
Consumers: These are the persons which purchase the goods and services of the
organisation. As Wesfarmers engaged in the business of chemical, fertilizer, coal mining,
industrial & safety products so it has various consumers. As per the views of consumers it has
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been analysed that company has focuses to deliver better and quality products so that needs of
consumers can be satisfy. It is important for a company to fulfil the desires of clients so that they
prefer to purchase the products the firm as a result sales of Wesfarmers will enhance and it can
generate higher revenue. It is also help to grab more market share by expanding the business of
firm. It provide value to the consumers and fulfil the commitment which is associated with it.
Government: As government is also the stakeholder because it charge tax from the
Wesfarmers on the profits which are earned by it. It is important for an organisation to fulfil the
liability in context to the tax. For the government it is the main source of revenue and the amount
which is collected through it have spent on the development of nation and its welfare. As
company pay tax within stipulated time period on the profits which is earned by it in a financial
year. So this is value commitment which is made by organisation (Hopkin, 2018).
6. Conclusion in context to the integrity of organisation
The term Integrity has emphasis towards the moral & ethical convictions and focuses to
do appropriate things in the situations which appearers in the organisation. To make integrity is
essential for an organisation so that business operations can perform in better manner and firm
can achieve its predetermined objectives. It includes internal consistency like virtue and it is
important for Westerners to make emphasis towards integrity and for that purpose it emphasis to
build better relationship with the consumers by providing better quality of products and services
and fulfil their desires so that they will attract towards the firm. It also make integrity with the
shareholders and for that purpose it focuses to provide higher returns so that they make more
investment and earn more profits. In this regard it also provide relevant information about the
financial position of the organisation so that they can better decisions in context to the
investment. As mini audit is an external view of AdWords account in real time and however no
ads which are scheduled at time of pulling the report and it does not reflect in PPC prospector.
As audit is an investigation in the books of accounts of an organisation and with the help of it
defects and errors can be identified in the financial statements of the organisation so that true and
fair position of business can be determine (Al-Bassam and et. Al, 2018).
7. Organisational integrity and organisational hypocrisy
Organisational integrity- The organisational integrity may be defined as the ethical
integrity of the employees in a manner which can help to the company to achieve the goals and
objectives. Basically, the organisational integrity is very important in the context of the
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organisational success as well as for development of individuals to work in the group or as a
team. In other words, the organisational integrity is associated with the integration of the
employees as an unit so that the goal of the company can be achieve effectively and easily.
Herein, the aspect of the Wesfarmers company it is important that they should integrate their
employees in an unit so that they can gain their objectives effectively and timely. Herein some
ways that are mentioned below through which organisational integrity can be developed:
 Ethical and effective leadership.
 Better culture management
 Training of the employees as per the need of the organisation.
So these are some ways by which the organisational integrity can be created as well as it is being
applied by the Wesfarmers company to maintain an effective organisational integrity.
Organisational hypocrisy- The organisational hypocrisy can be defined as a kind of
system which is related with the action and decision of an organisation which may operate
different from one another. In general term the organisational hypocrisy is related with the
involving in a kind of behaviour or activity which is neglected by others in the organisation.
Herein, the aspect of the organisations the organisational hypocrisy is a negative term or concept
which is needed to be ignore. In the context of the Wesfarmers, they should try to keep the
employees away from those activities which are being criticize by the others. This is important
because in the absence of this, there can be certain conflicts. As well as the organisational
hypocrisy may reduce the competitiveness of the organisations because this impacts the
companies internal performance and due to this other functions get effected. So in the aspect of
the Wesfarmers company they are needed to be remove this organisational hypocrisy. So it has
been analysed that integrity indicate organisational hypocrisy (Salim and Seufert, 2016).
CONCLUSION
As from the above report, it has been analysed that it is important for an organisation to
emphasis about governance and risk management audit. As there are various stakeholders which
are related to the organisation and it is the responsibility of the firm to make better plans and
policies for the benefit of them. As company has also focuses about advertised values of the
corporation and it is required for the business entities to emphasis towards value commitments so
that stakeholders can be satisfy. As corporate governance is important for the firm because it
involves specific rules and regulations which are required to follow for the effective business
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operations. As the stakeholders view is important so that company can know what they thing
about the business and what are the improvements required for the business growth. As risk
management audit is important so that business risk can be minimise. To perform the business
operations effectively integrity is important and it lead towards growth and success of the
corporation.
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REFERENCES
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