BUSN603 Corporate Governance and Risk Management Audit: Woolworths

This report conducts a mini-audit of Woolworths Group Ltd, the leading retail organization in Australia and New Zealand. It examines the organization's governance, risk management, financial accountability, and corporate social responsibility (CSR) initiatives. The report begins with an overview of Woolworths, its advertised values (quality, responsibility, collaboration, innovation, integrity, and sustainability), and its commitment to stakeholders through various reporting mechanisms, including annual reports and sustainability reports. The analysis evaluates how Woolworths promotes, monitors, and reviews its actions to fulfill its commitments, particularly in areas like diversity and environmental concerns. It also assesses the company's CSR performance and financial accountability. The report highlights areas where Woolworths has succeeded and where it faces challenges, such as in environmental sustainability and employee relations, and concludes with an overall assessment of the company's governance and risk management practices.

GOVERNANCE AND RISK MANAGEMENT
AUDIT
Woolworths Group Ltd

Table of Contents
Introduction.................................................................................................................................................3
Overview of the organisation.......................................................................................................................3
Advertised Values of the organisation.........................................................................................................6
Promotion, Monitoring and Review of actions to fulfill commitments........................................................7
CSR and financial accountability of Woolworths........................................................................................9
Conclusion.................................................................................................................................................11
References.................................................................................................................................................12
Appendices................................................................................................................................................14

Introduction
Woolworths Ltd is the leading retail organisation in Australia. The organisation has also stake in
countries like New Zealand which makes it one of the most important retail company across
Australia and New Zealand. With the rise in awareness among consumers organisations need to
develop a strong reporting structure in order to have a strong social bond which would not only
help the organisation to have better relationship with the consumers and develop a strong hold
over the market (Bernardi, C.R.I.S.T.I.A.N.A and Stark, 2015). The present study is a mini audit
which would involve reporting of different aspects of Woolworths like Governance, risk
management, financial management and accountability, CSR and social objectives et cetera.

Overview of the organisation
Woolworths Group Limited is one of the leading organisations in Australia operating in New
Zealand as well with major retail interest. This is the second largest retail company in Australia
after Wesfarmers and has a major market share in New Zealand. Woolworths has number of
retail stores all across Australia and the Countdown supermarket in New Zealand. The
organisation also is the largest liquor takeaway organisation. The company is already listed in the
Australian Stock Exchange and holds significant market share in the country which has helped it
to grow and create awareness in the market. With consistent growth and development in the
Australian and New Zealand market the organisation focused on developing its social bonding
through effective corporate social responsibility, risk management reporting and governance
(Varsei, 2016). Woolworths is a big name in the Australian and New Zealand which has forced
the organisation to have a strong setup to communicate and promote the organisation among its
stakeholders. Woolworths opened its first store in Sydney in the year 1924 and since then the
organisation has grown consistently with time. Presently it stands with strength of 205,000
employees and total revenue of AUD 56 billion (Crane, Matten and Spence, 2019).
The organisation has several tools which help to reach the stakeholders and shareholders of the
organisation. Tools like mission, vision, objectives, financial results and reporting strategies help
to commit to the overall good of the society and communicate with the stakeholders attached in
the best possible manner. Corporate Governance is central to the idea of stakeholder bonding for
the organisation and has been practiced pretty well by the board of directors and different levels
of the employees at Woolworths (Venkatraman and Nayak, 2015).
The main idea for Woolworths is to develop a strong platform for every stakeholder to get the
best possible outcome from the organisation. Its mission is to “build a business on integrity”
which clearly shows that the organisation is extremely focused on transparency and
communication with the stakeholders.
The vision of the organisation is to “deliver convenient services, value and quality to the
consumers.

The organisation focuses on improving its services and relationship based on few aspects which
are nurturing new talent, developing communication through regular and transparent reporting,
extending and developing leadership and by maximising value (Epstein, 2018).
The organisation emphasises on communicating with the stakeholders’ trough different
documents like financial reporting, annual reports, investor information through website,
advertisement and audited and unaudited version of company information through print media
which largely helps the organisation to prove its point and allows communicating with the
stakeholders in a transparent manner. The organisation has clear values, policies and procedures
which help the organisation to establish its agenda effectively allows the organisation to move
towards achieving its mission and vision having the different stakeholders at its side
(Schaltegger, Burritt and Petersen, 2017).
The annual report of the organisation is an excellent medium to communicate with the different
stakeholders attached with the organisation. This contains all the key documents which each and
every stakeholder should know about the company. This provides thorough knowledge about the
board of directors of the organisation and the activities that the organisation naturally takes up
relevant to the business. It is also important to note that the annual report also provides a
thorough financial information with the help of the financial statement like trading, profit & loss
and final accounts, the audited and unaudited version of the revenue streams, cash flow et cetera
which largely helps the organisation to put forward transparent and thorough information to its
stakeholders especially to the investors who look forward to getting effective return on their
investment (Morioka, Evans and de Carvalho, 2016). On the other hand the risk management and
audit report provides all the relevant non financial information of the organisation including a
significant part of the corporate governance information showing the consumers and other
stakeholders. The corporate governance statement provides a significant understanding of how
the organisation moves towards having an effective relationship with the different stakeholders
of the organisation including the internal stakeholders. Since governance is at the core of the
operation of the organisation governance report is extremely effectively addressed so that the
stakeholders are able to understand the different roles and responsibilities played by the board of
directors in the best possible manner (Dabic et al., 2016). The risk management and charter are
developed to clearly convey how the organisation moves towards effective analysis of problems

and accordingly eliminating them to operate smoothly. The risk management and audit
effectively helps the organisation to ensure proper analysis of the organisational resources
especially the financial resources which helps the organisation to convey the same to the
stakeholders. The risk management and audit forms effective composition that helps to
implement the audit in the best possible manner which allows getting effective result from the
audit. The annual review is done so that the organisation is able to get suitable idea as to which
way the organisation is moving and whether it is able to frame and move in a strategic direction
to satisfy all the stakeholders important for the organisation (Visser and Toolhurst, 2017).
The organisation has an informative website which is also used as an extremely effective
advertising tool that helps to promote the mission, vision, corporate and social focus of the
organisation and accordingly helps them to convey the ideas to the stakeholders. Various
relevant links have been given by the organisation so that stakeholders could check them to get
fair idea as to what the organisation is doing and how it is doing them (Adams, 2017).
Finally the organisation also prepares a sustainability report which mainly discusses the key
steps that the organisation has taken in order to ensure sustainability through corporate social
responsibility and other strategies. The organisation develops its CSR plan to have a strong
social connection and contribute towards the overall social, economic, environmental
development of the area it is working in. Hence, the sustainability report also plays an important
role in conveying the key ideas of the organisation (Bepari and Mollik, 2016).
Advertised Values of the organisation
Woolworths as an organisation is run based on number of different values among which some of
the important are: quality, responsibility, collaborative, innovation, integrity, and sustainability.
As an organisation it considers above values as most important for the sustainable development
of the company and the society. Woolworths the second largest organisation in Australia and
New Zealand have been focused on maximising these values in the best possible manner. Over
the past few decades Woolworths have consistently worked on developing its business to suit the
needs of the stakeholders and along with that it has emphasised on sustainability that has allowed
the organisation to perform their best towards the society (Epstein, 2018). In the last
sustainability report developed by the organisation it has formed its sole agenda that is “to think

tomorrow, together”. It is quite clear that the organisation wants all the stakeholders to be
together while it grows and contributes to the overall development of the society. The
organisation wants to do everything better for its stakeholders and has strived to implement the
advertised values in its operations in the best possible manner. One of the major decisions taken
by the organisation to apply the values is by communication. Woolworths has an excellent
communication strategy which has helped the organisation to communicate with all the
stakeholders in the best possible manner (Louw, 2016). The commitments planned by the
organisation is to reduce environmental concerns and reduce carbon footprints however, it has
been seen that the organisation has failed to completely live up to the expectations especially in
relation to environmental concerns. Even though the organisation has pledged complete
implementation of green practices its carbon footprint reduction campaign did not go well
because the supply chain used by the organisation has largely created a roadblock. Hence, it
remains to be seen how they plan to prepare an effective distribution strategy which helps to
reduce carbon footprint. Another key commitment through which it intends to reflect on its
values is by creating diversity which has been a major aspect of their operations (Sappideen,
2015). There are number of aspects which have been discussed in diversity for instance, diversity
in people the organisation has been effective in developing gender equity, cross cultural
workforce, involvement of indigenous groups have been visible in the last few years. However,
when the organisation has emphasised on diversity it has failed to provide complete job security
which largely relates the value of the company quality of life. In order to improve quality of life
the organisation should be able to provide job security which they failed and this has led to
strikes especially in the warehouses across Australia (Kubitscheck, 2016). Improper pay is
another major issue raised by the employees which shows that the organisation has failed to
collaborate with the employees to create a sustainable relationship with them. From the present
analysis it is clear that the company has failed in two different fronts that is providing assurance
to the employees and environmental concerns even though they highlight it as one of the major
aspects of their operations for a long time now (Foo, 2017).
Promotion, Monitoring and Review of actions to fulfill commitments
The organisation is determined to fulfill what they set out to do. It is extremely important to
mention that as an organisation there are number of issues which one is faced with but

Woolworths has been able to maneuver these issues to move towards achieving its commitments.
In order to promote diversity in its organisations it has not only recruited people from different
ethnic groups but have also ensured that they get a safe environment through regular monitoring
and reviewing of the workplace ambiance. The HR team of the organisation has been extremely
thorough with the way ethnic minorities are handled and also ensure to provide them with proper
respect in terms of positions. It has also emphasised on creating ample opportunities for all with
its unbiased work framework (Knox, 2015). The organisation has achieved the Gold Tier
Employer Status in Australian Workplace Equality Index which has helped to include a number
of social minorities like lesbian, gay, transgender, bisexual and intersex people. The organisation
has been able to promote their practices through the employees itself. Having the right mix of
employees from different background help to bring numerous insights on the table which largely
helps to implement a strong understanding of what needs to be done. The sustainability plan of
the organisation is mainly based on planet, people, Prosperity which involves many aspects. The
organisation has always emphasised on maximising on the impact of existence of the firm which
means it constantly wants to contribute to the overall development of the society for which it has
invested significant on different fields (Ferguson, Pinnuck and Skinner, 2016).
Commitment towards the stakeholders has been one of the main agendas of the organisation
which it has tried to fulfill in the best possible manner. Even though there has been controversies
regarding employee relationships, its relationship with the suppliers, vendors have been
effective. Its approach to procurement of raw materials especially vegetables and food are done
directly from the farmers which helps to pay them effective price. The organisation has long term
business partners that have helped to strengthen the relationship. The organisation has constantly
collaborated with the stakeholders to ensure it is able to achieve the aim to creating a better
tomorrow for everyone. Employee engagement and development has also been its focus as the
success of the business is built on the people of the organisation. With diversity and inclusion the
organisation has tried to work on its commitment of diversity. Providing a healthy and ethical
environment has been a major aspect for the organisation because ethics is an important attribute
of business in the modern era (Sullivan and Gouldson, 2017). All the stakeholders consider
ethics as an important parameter to judge an organisation. In this case Woolworths have been
able to lead the way for many organisations in the market as it works extremely ethically. Ethical
practice is implemented in different activities especially in the field of customer service and

operations which has helped the organisation to come closer to the consumers and other
stakeholders like the government. It has constantly strived to work towards the community in
both the countries that it works in which has helped to develop a strong business environment for
the market (Shimeld, Williams and Shimeld, 2017).
CSR and financial accountability of Woolworths
Corporate Social Responsibility is the most important concept in the field of business in the
contemporary business environment. Almost every multinational organisation use CSR as an
effective strategy to reach the audience and create an effective social bond. The idea of using
CSR is not to generate more sales and revenue but to create awareness and contribute to the
overall development of the society. Woolworths had developed a Corporate Social
Responsibility and have operated the strategy effectively. In the last few years Woolworths have
made a number of changes in the CSR plan. Woolworths CSR plan had been criticised earlier in
2011 by the International not for Profit organisation where the organisation has been directly
accused of not paying properly to the suppliers. Woolworths have been accused of imposing
harsh conditions on the suppliers and the case has been made strong with the evidence that
Woolworths directly contacting farmers to get the required resources. They have been accused of
not meeting the sustainability criteria and hence it could be said that CSR plan of the
organisation has not been effective during that time (Adams and Borsellino, 2015). In the year
2014 there was a large controversy against companies like Woolworths when they banned plastic
bags in the store but there was a huge uproar when the consumers understood that the invisible
psychological contract which every organisation has with its stakeholders like consumers or
employees were breached. It is clear that the organisation failed to live up to the expectation of
the consumers in reducing the use of plastic in the store rather stopped giving away plastic bags
for free which was a strategy to reduce the investment on plastic bags and hence it was not a
good step by the organisation. The organisation has not yet been able to control the use of plastic
which is a huge slap against its CSR plan (Colla, 2017). In the last couple of years there has also
been a problem with the food waste which the organisation has to take control of. In the last
financial year the organisation has taken pledge to focus on reduction of use of plastics which
has been effectively implemented. The organisation has moved on to green practice reducing
plastic packaging replacing it with renewable plastic and paper which has helped the

organisation to reduce waste as well. Waste management is an important aspect for the
organisation and effective waste management would reduce significant investment of the
organisation and hence the organisation has emphasised on this effectively. Under UN 2030
Sustainable Development Goals the organisation has set its priorities among which reduction of
plastic, waste management and environmental concerns have been kept as key points. The
organisation dug in to analyse the key concerns for the stakeholders in the society which is
effectively showed in the materiality matrix developed by the organisation (Long and Inbar,
2016).
Fig 1: Materiality Matrix
In the last few years Woolworths Group has been effective in serving the community in the best
possible manner. Promoting gender parity, pay parity, supporting people, employment programs
et cetera have been developed by the organisation which has helped the company to recover well
with the CSR plan. In terms of people the organisation has received White Ribbon Accreditation
on Countdown New Zealand which shows Woolworths has been extremely effective in ensuring
gender parity and diversity at the workplace. It has also contributed to connecting the ethnic

minorities like Maori groups in NZ and aboriginals as employees in Australia. Overall it could be
said that the organisation has been effective in ensuring improvement in its CSR activities
(Pham, 2016).
In the context of financial accountability the organisation does effective financial reporting in its
annual report. Financial risk management is one of the major barrier to effective and clean cash
flow of the organisation and hence its financial report and accountability helps to address these
issues. The organisation involves in continuous disclosure that has helped to inform shareholders
effectively. The organisation communicates through its yearly financial reports and half yearly
investor meets and regular interaction through electronic media that helps them to get all the
relevant information effectively. The disclosure policy of the organisation aims to comply with
regulatory requirements, clarify accountability of the organisation and promote investor
confidence and integrity of the organisation (Elliott and Hoare, 2015). Overall it has helped the
organisation to manage financial, social and environmental risks despite initial hiccups. The
financial accountability is shown by the organisation through effective communication with the
shareholders as discussed earlier and annual and half yearly disclosures by the organisation
keeps the shareholders on the same page allowing them to make effective investment decisions.
Conclusion
From the above audit it is clear that the organisation Woolworths Group Ltd has had fair share of
problems regarding sustainability and development. There was significant controversy in terms
of waste management, workforce issues, environmental concerns which the organisation has
been able to eliminate with proper reporting, policies and procedures. The organisation is
prudent about its financial and corporate social responsibility reporting which helps to keep the
stakeholders on the same page in the best possible manner and allows the organisation to run the
business properly.

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Appendices
https://www.woolworthsgroup.com.au/icms_docs/195396_annual-report-2018.pdf
https://www.woolworthsgroup.com.au/icms_docs/195398_2018-sustainability-report.pdf
https://www.woolworthsgroup.com.au/content/Document/2018%20Corporate%20Governance
%20Statement.pdf
https://www.woolworthsgroup.com.au/icms_docs/
138192_Audit_Risk_Management_and_Compliance_Committee_Charter.pdf