Comprehensive Ethics and Governance Report: Blackmore Limited Analysis

This report provides a comprehensive analysis of Blackmore Limited's ethics and governance practices. It begins with an executive summary, followed by an introduction outlining the company's historical background, values, and purpose. The report then delves into the application of ethical theories within the company's operations, emphasizing its commitment to improving societal lives through health product development and distribution. A key section focuses on corporate governance, detailing the composition of the board, including the ratio of independent to non-independent directors, and the role of the chairperson. The report also examines the remuneration process for executives and directors, board orientation, and the company's communication strategies, interpreting them through the lens of legitimacy theory. The analysis includes insights from the chairman and CEO, board orientation, and the structure of the board to add value. The report concludes with a discussion on protecting the integrity of financial reports and overall conclusions about the company's ethical and governance practices. The report is based on the annual 2018 report.

Running head: ETHICS AND GOVERNANCE 1
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Ethics and governance
Name
Institution
Professor
Course
Date

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Executive summary
The purpose of this report involves the study of Blackmore Limited that deals with health
products. The reason for the study is to give the scope and historical background of the company.
Besides, the report provides an overview of the company in terms of its values, purpose and the
theories applied in the operation of the company. The report as well provides a summary of the
company in terms of how it is based on the annual 2018 report.
Moreover, the report provides an overview of corporate governance indicating the
composition of the board. This includes independent versus non-independent directors. It also
tells us whether the chairperson of the company is an independent director or not. The report also
gives a summary of the remuneration process of the executives and directors. The board
orientation of the company is also provided in the report based on the annual 2018 report.
Finally, the report provides the interpretation of the company means of communication by use of
the legitimacy theory.
Introduction
Blackmore Limited is an Australian based health Products Company that started in the
year 1930 by Maurice Blackmore. It was initially opened as a fast, healthy food shop in Brisbane
and years went by, it grew and expanded its operations in other regions (Wang, 2018). This
particular company is headquartered in Warri wood, New South Wales. It mostly employs an
approximate of 1400 employees who make great efforts in realizing the company's dreams and
accomplishing its future goals. In the modern era, it has become a public listed company with its
operations in regions having a market capitalization concept valued at approximately $2billion.It
is mostly aimed at developing, marketing and also making sales of various health products for

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both humans and animals. It bases its operations in various states like Australia, New Zealand,
and also extends its activities across Asia (Sammartino & Gundlach, 2013). According to its
primary operations, it provides vitamins, herbal products, and even mineral supplements that are
highly nutritional to animals and human beings. It includes Bioceuticals, pure animal wellbeing,
and various natural health products. It also deals with global therapeutics.
The purpose of the report is to show how the company is aimed at the improvement of
society lives. The report indicates that the purpose of the company is to raise the living standards
of people in many communities. It accomplishes this objective by ensuring the dissemination of
crucial information and delivery of products regarding the optimum natural health solutions
(Jefferies, Healy, Weatherall, Beasley, & Shirtcliffe, 2012). This is very crucial since it serves
the best interest of people's wellbeing through the maintenance of their health standards that
solve the problematic issue of diseases. It also achieves this by combining its cultural, heritage,
and knowledge into creative and innovative procedures that ensure quality healthcare. These
brands provide a regulatory framework of the people's health solutions at work, homes, and in
any environment.
Qualitative research has been done, showing that Blackmore limited puts its core values
at the forefront of its business operations. It comprises of behavioral aspirational types of core
values. These specific values are significant in underpinning and ensuring that business activities
(Coleman, & Durgin,2014). This company is also committed to exposing unutilized
opportunities and strategic priorities. In this case, it makes great efforts in having equipped
systems, high caliber personnel, and professional management. These works increase the
organization's superiority in the business world's performance.

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Ethical theories have been applied in this report to show that Blackmore limited company
puts its focus on boosting growth and continuous improvement to maintain its business image of
goodwill in contemporary society. Its current strategic direction involves its ability to maintain
its position as a leading company in the health industry (Jalbert, Golebiowski, Stapleton&
Madigan, 2012).
The outcomes of the report indicates that the company operations are also diverse to
achieve great success for the entire company, including the management, employees, the public
domain, government agencies, and other stakeholders in the business environment (Christopher
2014).It respects people's healthy lifestyle through the implementation of sustainable storage,
branding, packaging, and also engaging in proper waste disposal practices. It also involves itself
in service delivery through charitable community programs and initiatives that help people in its
environs.
Summary of corporate governance at Blackmore limited company
It involves the composition of the board, including the ratio of independent to non-
independent directors and the chairperson of the board is an independent director. The
governance of the board is regulated by various principles such as ethics and fair remuneration.
The company's group board and overall executive management are committed to ensuring a high
level of corporate social responsibility and good governance throughout the entire firm
(Mangare, & Li, 2018). The board regularly reviews the organization's governance operations to
meet all the requirements of key stakeholders. It also makes sure to comply with the legal needs
by setting a clear framework of set governance standards. The following is the composition of
the company's group board;

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Non-Executive directors Executive directors
David Ansell Marcus Blackmore
John Armstrong Richard Henfrey
Stephen chapman Aaron
Jackie MacArthur David Fenion
Helen Nash Peter Osborne
Brent Wallace
6 5
From the above table, the ratio of independent to non-independent directors is at 5:6
The chairperson of the board is an independent director
The remuneration report—summaries of how directors and executives are rewarded
The board of directors implemented a remuneration committee that plays a role in
focusing on the existing remuneration strategy and procedure. The policy also instills
recommendations that serve the best interests of the company stakeholders (Shimeld, Williams,
& Shimeld, 2017). The remuneration committee finally reports immediately to the group board.
According to the Annual report of 2018, it is evident that the remuneration committee carries out
its sole responsibility fairly. This is through achieving the following purpose.
i. Offering rewards for extemporary achievement of strategic and future goals
ii. Retention of those talented directors and executive personnel
iii. Alignment of the executives with the company's financial earnings, targets, and also the
asset also owned by all shareholders
iv. Remuneration policy for the non-executive directors

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The committee recommends this for approval after carrying out a proper review of the
surveys and market data set published in various platforms. They usually get fixed annual fees
including
 Board fee
 Committee fee
 Committee chair fee
Executive director's remuneration
These procedures are entirely transparent as they involve set and performance-based
remuneration. These offer the executive directors with tangible resources to ensure that they
achieve the company goals and also to contribute to its success and profit-making (Christopher,
2014). This is also done with proper alignment with the stakeholder's interests.
The fixed remuneration of executive directors comprises of superannuation.
The performance-based remuneration of executives is linked to short term and long-term
incentives, staff share, and profitability share.
The reports from the Chairperson and the CEO
Chairman
According to the chairman, the Australian regulatory system for supplementary health
products has proved to be quite expensive .it has various public risks and complexity issues. The
chairman addresses how progress has been made after the appointed of Henfry as the CEO
(Holgate, 2018).The chairman indicates that the board is focusing on allocation of capital and
other resources to increase investment opportunities (Deegan, Rankin, & Tobin, 2002). The
chairman indicates that in the current years, the company has improved its relationship with the
existing regulator (Deegan, 2002).The chairman offers insights on how board review has been

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carried out to increase focus and priority. Consultation activities have increased since there is a
significant change in the bureaucratic relationship hence bringing in better results and working
relationships with management and administration.
Chief Executive Officer
The CEO, Richard Henfry indicates that he has come to fully understand how the group
is uniquely positioned. It is positioned as a highly growing company in the world. He shares
various insights on health care in various co8untries such as Australia. He reports Blackmore
increased sales volume and profitability growth rate at $601million in revenue (Holgate, 2018).
Blackmore has also worked with other key agencies like the complementary health care council
of Australia (Hill, 2018). This has enabled its medicinal products to be well listed and diversified
under the US free trade agreement that ensures regulatory framework and governance (Deegan
2002).
It is also important to note that Blackmore limited has undergone a transition state to a
joint agency that normally regulates therapeutic products in the operating regions. This is crucial
since it has enabled maximum consultation in governance (Collins, Holwell & Iaquinto, 2014).
Therefore, this has made it possible for the industry to maintain a healthy era for its medicinal
products in its worldwide markets (Milne, & Patten, 2002).
Board Orientation
Board orientation is a critical process that familiarizes the board with the roles they are
supposed to do in the organization. The primary importance of the program is to ensure that the
entire board of governance is aware of the responsibilities needed in the company (Blackmore&
Leeprechanon, 2015). Anyone can undertake the issue of board orientation. The board sets policy
on how to adjust, especially to the members of the organization (Holgate, 2018). It also conducts

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a board orientation. Various sources support that board officers in the company may conduct
orientations alone. The new directors are in the position to undertake a first glimpse of the new
duties and responsibilities assigned to them. The issue is that orientation provides the opportunity
for the new board to familiarize themselves with the goals, mission, and culture of the company.
The direction will help the new directors to understand the corporation and also understand how
the company is operating (Liao, Luo & Tang, 2015).
Importance of Board Orientation
The whole program helps the new board directors in understanding what to do and
knowing how to use their positions to avoid costly missteps. Through the entire process, the
board of directors will be acquainted with appropriate knowledge and skills. The information
received by new directors in the company tends to highlight new areas that need to be worked.
Besides, the company works on developing an in-depth orientation that will aid in providing
details on the types of problems anticipated in the organization. The reports revealed by the
company in the 2018 financial year show how the new board of directors acquires knowledge
that helps in planning and pursuing duties confidently. The robust sense gained through the
orientation equips the newbies on how to uphold the ethics and social responsibility needed in
the company (Helfaya & Moussa, 2017).
Structuring the board to add value in the company
According to various reports, Blackmore Company has a nominations committee that
includes the full board. The proceedings of the nomination committee are controlled by the new
policies outlined in the company's constitution. The main aim of the nominations committee is to
provide maximum support. Besides, the nomination committee advises the board of directors,
thus enabling the board to select competent individuals who can apply skills needed. All new

ETHICS AND GOVERNANCE 9
directors are demanded to observe the highest standards of governance when offering duties and
responsibilities in the company (Coleman& Durgin, 2014). The 2018 director's report of the
company outlines the number of members in the committee. The stories also show the number of
meetings the committee is supposed to meet within a year. According to the CEO, the board is
supposed to review the nominations and composition for the new directors. Through this process,
the board will ensure there is a balance between the skills and experience needed in the
Blackmore Company. In Table 1, there is a clear reflection on the current mix included in skills.
The table also outlines the diversity of the board.
Protecting the integrity and financial reports
The entire board in Blackmore Company is committed to the aspect of transparent. The
CEO supports how the board has been working to ensure there is transparency when revealing
the financial reports. According to the reports, the company has three members who are in the
position to design a financial report needed. The three members are non-executive directors,
whereby the majority is an independent director (Schluessel, Herzog & Scherpenstein, 2015).
Acting ethically and responsibly
According to Sørensen, Hubing, and Jensen (2016), ethic and responsibility is part of
board orientation. There is a code of conduct for all directors in the company. The system of
behavior ensures the directors and employees are in the position to follow the policies
immediately after the orientation. Besides, the law of conduct helps in providing employees with
a guide on what is acceptable and not acceptable within the company. The code also ensures the
directors are in the position to regulate the concepts related to stakeholders. Most of these
concepts outline the theories that focus on the stakeholders within the company. According to
various sources, we have stakeholder theory that ensures there is appropriate corporate

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governance. The approach extends to how the board regulates the policies needed in the
company. The idea is that the plan demands the corporate body to identify and respond to the
various groups within the company. The theory is evident in how the company is applying the
policies set aside to administer the aspect of corporate governance. The argument is in two forms
that are the ethical and managerial branches, each handling a specific activity. The righteous
branch of the theory demands the board to concentrate on the needs of stakeholders within the
company. There are different implementations outlined in the Blackmore constitution, which
guides on how new directors are supposed to be selected and assessed(Ison, Blackmore &
Iaquinto, 2013). The ethical branch is all about knowing what to do and knowing how to protect
the needs of stakeholders. On another hand, we have a managerial department that works on
meeting the needs of the most powerful individual within the organization. According to the
CEO, the Blackmore Company has been revealing vital information relating to the stakeholders.
The dominant individual at this level are the banks and other related shareholders such as the
governments.
The board focuses on the resources
The main idea outlined by the theory is on how the organization is in a position to control
the resources they have. According to current reports, Blackmore Company had a board of
directors that plays a vital role in regulating and controlling both internal and external resources.
The board drafts new policies and regulations which will help in managing the resources
available. The financial reports support how independent directors control the individual's skills
and knowledge needed in corporate governance. The entire board is always aware of the aspect
of resource dependency, meaning that the theory guides the board on resource allocation.

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Summary on board orientation
Table 1
The orientation of
directors
The structure and
composition
The main role The vitals details
Structuring the board
to add value in the
company
Independent
shareholders
The shareholders are
in need of adding
value
The CEO,
Chairperson and
Head of directors.
Protecting integrity
and financial reports.
Dependent
individuals
Increasing the aspect
of capital
management.
Financial reports,
income statement and
balance sheet.
Acting ethically and
responsibly.
Mostly the
independent
stakeholders to
protect code of
conduct
Working with the
most powerful
individuals in the
company.
The voluntary
disclosures.
The board focus on
the resources
The mix of
independent and non-
independent directors
Focusing on external
and internal resources
Focusing on what is
necessary so as to
safeguard the
resources of the
organization.
Interpretation of company communications using Legitimacy Theory

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Legitimacy theory outlines how a company handles the issue of transparency. The entire
concept revealed by the approach is mainly based on voluntary disclosures (Deegan, 2002). The
two methods described onboard orientations are a precise measure of how the issue of legitimacy
is handled in Blackmore Limited. The theory, therefore, supports social contract and how the
board should work hard enough to familiarize them with the concept of legitimacy when
handling customers. The board orientation program reveals the relationship between the
governance and the board of directors in the company. According to the financial reports, the
outlook of the boards supports the concept of legitimacy. The CEO outlines the critical measures
employed when the company needs the policy of change. The financial reports, according to
auditing general, follow the idea of transparency. Through this analogy, it will be easy for
stakeholders to get final stories that follow the required policies and instructions (Deegan, 2002).
Besides, the issue of resource allocation follows the outlined standards. The principle of
transparency is evident in this section. Blackmore Limited has competent directors who account
for everything. The board is on frontline telling the stakeholders what is happening and what can
be done to induce new policies needed in various sections within the company. According to
toDeegan, Rankin and Tobin (2002) legitimacy is the general reflection revealed by the
organization to the whole society. Blackmore Limited has been on the frontline applying the vital
policies that apply to an aspect of legitimacy. The company has a constitution that outlines the
code of conduct. The whole society uses the issue of legality by allowing the flow of resources to
the company. According to Milne and Patten (2002), a company has to consider what is
legitimate for society. Blackmore Limited has been applying the essential measures which
account for the equity. The current reports show what the company has been doing. Blackmore
Company adheres to the issue of ethic when selling and designing their goods. The CEO stresses

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on how the company has created a new body that handles issues arising from the customers. The
company has been exercising the question of legitimacy, thus building an original image to the
public.
Conclusion
The report has shown that through the use of ethical theory, it is clear that the Blackmore
Limited company applies the idea of legitimacy. Based on what has been discussed in the report,
the method outlines how the corporation integrates with the board in the company. According to
the CEO, the board has standard policies that guide on what is to be followed when allocating
resources. The chairperson stresses how the board handles grievances and at the same time how
the board comes to a standard solution. The committee works on improving the image of the
company by integrating various polices that work on improving the level of legitimacy. The idea
is that the board has the mandate to decide the proper disclosures that are common to the
stakeholders within the company. On another hand, the board has categorized the stakeholders
into two sections. The sections include primary and secondary stakeholders. The main aim of
having all these sections is to ensure there is an aspect of equity within the company.

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