Willbed Ltd: Corporate Governance Issues and ASX Compliance Report

This report analyzes the corporate governance challenges faced by Willbed Ltd as it prepares for an ASX listing. The report addresses the necessity of a board of directors and proposes a Board Skills Matrix, detailing the qualifications, experience, and independence of potential board members to comply with ASX principles. Part A of the report examines the composition and responsibilities of the board to add value to the organization and meet the ASX guidelines. Part B focuses on related party transactions, specifically detailing the disclosure requirements for a transaction between Willbed Ltd and Jessica Peterson, the wife of a founder, in accordance with ASB 124. The report concludes by highlighting the importance of adherence to ASX regulations and accurate financial reporting to ensure compliance and successful listing.

Running head: ISSUES ON CORPORATE GOVERNANCE
Issues on Corporate Governance
Student’s Name:
University Name:
Author Note

1ISSUES ON CORPORATE GOVERNANCE
Table of Contents
Question 1..................................................................................................................................2
Part A.....................................................................................................................................2
Part B......................................................................................................................................6
References..................................................................................................................................8

2ISSUES ON CORPORATE GOVERNANCE
Question 1
Part A
The issue that has been raised in the question is that when Sam and Mack, the
founders of Willbed Ltd decide to list the company so that they get a market to sell their
shares and collect funds for building the boat. Now for the purpose of listing a certain
company the guidelines or regulations mentioned by the ASX should be followed strictly,
otherwise the shares of the company will not be allowed to be listed. Thus Sam and Mack
need to make sure that the company complies to the laid down regulations. As mentioned in
the question Willbed needs to have a board of directors that add value to the company and for
this purpose a board skills matrix needs to be created (Clune et al, 2014).
Before creating a Board Skills Matrix the necessity or needfulness of the board of
directors need to be understood. An efficient board of directors is very important in an
organization. The board of directors has direct authority to control the management of the
company, therefore can implement and exercise new and improved policies and systems in
order to increase the efficiency of business (Trautman, 2012).
Therefore the Board Skills Matrix may be prepared in the following way:

3ISSUES ON CORPORATE GOVERNANCE
Board
Membe
r
Age/
Gender
Independe
nt (yes/No)
Executiv
e
(yes/No)
Qualifications Experienc
e
Description
of
background
Steve
O'Neil 43(M) YES YES
MBA in
Managerial
Finance; Phd
in Company
Manangemen
t.
More than
ten years
experienc
e as an
employee
and
apprentic
e in the
same
industry
and then
experienc
e as a CEO
Steve O'Neil
has been a
sincere
student and
a talented
individual
who has
worked with
much effort
and has
climbed the
ladder of
success very
quickly.
Sam
Peterso
n
62(M) YES YES
Masters in
Financial
Accountancy
Whatever
experienc
e Sam has
gained it
is from his
own
company,
Wellbed
Sam has
been a
determined
and sincere
student at
first and a
person of
principles
later. He has
a keen eye
on whether
the boook of
accounts has
been
maintainrd
properly.
Mack
Peterso
n
63(M) YES YES Masters in
Company
Management
The
experienc
e
obtained
by Mack is
from
Wellbed
as well.
Mack has
been
dedicated to
his work
since
childhood
and this has
shown in his
achievement
s. Though
Mack had
been
appointed by
a different
company
earlier but
he did leave

4ISSUES ON CORPORATE GOVERNANCE
the job in
order to set
up his own
company.
Alex
Pho 45(M) NO YES
Masters in
Company
Management
Alex has
been in
the
company
for the
past 15
years and
knows the
tips and
tricks of
trade.
Alex has
been the
30%
Indonesian
shareholder
and a key
customer.
Peter
Bravo 41(M) NO YES
Masters in
Financial
Accountancy
Peter
though
hired in
the past
five years,
has
experienc
e in the
same
industry
for more
than ten
years and
has a
strong
business
sense.
Peter has
been the
marketing
head of the
company.
Ryan
Peters 36(M) YES YES
Phd. In
Human
Resource
Management
Ryan is
totally
fresh in
the
industry
and has
an
experienc
e of total
five years.
Ryan though
appointed as
a employee
relationship
executive
has climbed
the ladder
very fast due
to his strong
business
sense and
ability to see
things
differently.
Elisa
Glee 48(F) YES YES
Masters in
Company
Management
Elisa has
been the
risk
assessme
nt
Elisa being
the risk
assessment
manager has
a strong

5ISSUES ON CORPORATE GOVERNANCE
manager
of the
company
for the
last 15
years.
knowledge
about the
loopholes of
the company
and the
meethods to
mitigate
them.
Julia
Brown 32(F) YES YES
Masters in
Pschychology
and MBA in
Company
Management.
Julia has
also been
a total
fresher
and has
worked in
the
company
for the
last 6
years.
Julia being a
very talented
individual,
understands
the mindset
of the
employees
and is very
efficient in
handling
them.
Therefore as the Board Skills Matrix suggests all the members are competent enough
to participate as a member of the Board. Each and every board member has an expertise in
different domains, thus they will be able to provide valuable inputs in all areas of business.
This will definitely add value to the Board and comply with the ASX rules and guidelines
(Fadzil, Faudziah and Ismail). The Board Skills Matrix drawn above adheres to the laid down
principles of ASX specifically principle 2 and 2.2. The board is built in such a way that it lays
a strong foundation for oversight and management. According to Principle 2 and 2.2 of the
ASX an organization that is being listed should develop the respective responsibilities of the
members of the management and board and the way in which their effectiveness is evaluated
should also be judged. The principle 2.2 demands that the structure of the board should be
such that it adds value to the organization. The other recommendations of the Principles are
that the members of the board should act with enough responsibility and ethics. The integrity
of the corporate reporting should also be maintained. The disclosures should also be
published by the Board at regular intervals. All these requirements are met by the above

6ISSUES ON CORPORATE GOVERNANCE
Board Skills Matrix. All the members are enough experiences and know the knits and grits of
the company. Even the gender ratio has been maintained and the talented young guns have
been given a chance to excel. The members are skilled enough to control the limitations of
the Board and plan accordingly. The different members of the Board has expertise at different
levels therefore is able to be vigilant on all the aspects of the business. Julia being a student
of psychology will especially prove to be advantageous for business. Thus Willbed covers all
the criteria’s in order to be a listed company.
Part B
The related party note for Willbed for the entry related with Jessica Peterson is as
follows:
(i)the name of the transacting related party – Jessica Peterson
(ii) a description of the relationship between the parties - wife of Sam Peterson
(iii) a description of the nature of transactions - One of the farms currently owned by
Willbed is to be sold to Jessica Peterson.
(iv) volume of the transactions either as an amount or as an appropriate proportion -
$4 million.
(v) any other elements of the related party transactions necessary for an understanding
of the financial statements – Jessica do not currently have the funds to pay therefore has been
provided with a time period of 12 months.
(vi) the amounts or appropriate proportions of outstanding items pertaining to
related parties at the balance sheet date and provisions for doubtful debts due from such
parties at that date – The entire amount is due for now and an interest will be charged for
10%.

7ISSUES ON CORPORATE GOVERNANCE
This is done as per the standards of ASB 124. The laid down standards mention that
two parties can only execute a related transaction when the other party with whom the
concerned company is doing business have certain shares in the company or is a director of
the company. Moreover the above transaction is done between related parties because the
party on the other hand is the wife of the founder.
The other three transactions are not covered under related party disclosures. This is
because amount paid to S&M Superannuation fund does not involve any related party.
The next entry related with Jasmine might have fallen under the related party
disclosure if she did have any shares in Willbed. As she did not have any share in the
company it will not fall under related party disclosure.
Alex Pho as no longer remaining a director will no longer be a related Prty to the
company, hence not covered (Kanget al., 2014).

8ISSUES ON CORPORATE GOVERNANCE
References
Clune, Richard, Dana R. Hermanson, James G. Tompkins, and Zhongxia Shelly Ye. "The
nominating committee process: A qualitative examination of board independence and
formalization." Contemporary Accounting Research 31, no. 3 (2014): 748-786.
Fadzil, Faudziah Hanim Bt, and Syed Soffian Bin Syed Ismail. "The Influence of Corporate
Ownership Structure and Board Members' Skills on the Accounting Conservatism: Evidence
from Non-Financial Listed Firms in Amman Stock Exchange." International Journal of
Accounting and Financial Reporting 4, no. 1 (2014): 177.
Kang, Minjung, Ho-Young Lee, Myung-Gun Lee, and Jong Chool Park. "The association
between related-party transactions and control–ownership wedge: Evidence from Korea."
Pacific-Basin Finance Journal 29 (2014): 272-296.
Trautman, Lawrence J. "The matrix: the board’s responsibility for director selection and
recruitment." (2012).