ACCT20080: Ethics and Governance Report on Pacific Bauxite Limited

This report provides a detailed analysis of ethics and governance within Pacific Bauxite Limited (PBX), an Australian mineral explorer. It begins with an executive summary outlining the importance of ethical governance for organizations like PBX, highlighting the significance of aligning business actions with laws and regulations. The report then summarizes PBX's corporate governance based on its annual report, including an overview of its board of directors and their roles. It further examines the board orientation process, emphasizing the development of a strong working relationship among board members. The report also interprets organizational communications through the lens of legitimacy theory, offering insights into how PBX manages its stakeholder relationships and maintains its reputation. The report discusses the company's corporate governance, board orientation, and communication strategies, incorporating relevant ethical theories like utilitarianism and deontology to evaluate the company's ethical standing. The report concludes with a discussion of how PBX addresses its stakeholders, based on the principles of corporate governance.

Running head: ETHICS AND GOVERNANCE
Ethics and Governance for PBX
Name of the Student
Name of the University
Author’s Note:

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Executive Summary
The main aim of this report is to understand the entire concept of ethics and governance for a
popular and significant organization in Australia that deals with bauxite exploration, known
as Pacific Bauxite Limited. The company code for ASX for this particular organization is
PBX. Ethical approach and governance is extremely vital and significant for any organization
to ensure that the business activities and actions are highly ethical and are compliant to laws
or rules.
Moreover, with the help of ethical governance, the organization is also being able to reduce
issues related to noncompliance and lack of regulation. This report has clearly described
about the corporate governance of PBX Limited after analysing its annual report.
Furthermore, the process of board orientation for this organization is also presented here with
two suitable ethical theories of utilitarianism and deontology. The final part of the report has
described about the interpretation of the organizational communications with the help of
legitimacy theory for PBX.

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Table of Contents
Introduction of the report...........................................................................................................3
1. Introduction............................................................................................................................4
2. Discussion..............................................................................................................................5
2.1 Summary of Corporate Governance of the Organization................................................5
2.2 Board Orientation of Pacific Bauxite Limited.................................................................8
2.3 Interpretation of the Organizational Communications with Legitimacy Theory...........11
3. Conclusion............................................................................................................................13
References................................................................................................................................15

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Introduction of the report
The purpose of this report is to understand about ethics and governance in Pacific Bauxite
Limited. Proper research about the latest annual report of the organization with its industry is
being done (Guston, 2014). Moreover, corporate governance at PBX is being summarized
after proper analysis of remuneration report and reports of the CEO and the Chairperson. The
board orientation of the organization is also analysed in this report. The final part of the
report deals with proper interpretation of the organizational communications with legitimacy
theory. The outcomes of the report include interpretation of ethics and governance in PBX.

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1. Introduction
Pacific Bauxite Limited or ASX code of PBX is a popular and significant Australian
mineral explorer that has focused on bauxite exploration, production as well as mining. The
organization of Pacific Bauxite Limited was founded in the year of 2005 and has its
headquarters in Australia (Pacific Bauxite. 2020). This particular organization has major
investments in different important and noteworthy projects of bauxite in the Solomon Islands.
Moreover, they have recently added to a highly prospective project in the entire Australia to
its suite of various bauxite assets. The organizational management of Pacific Bauxite Limited
has subsidiaries in Aluminex Resources Limited, Lime Pty Limited, Macquarie Marble and
Eight South Investments Pty Limited (Pacific Bauxite. 2020).
The organization is mainly dealing with Bauxite products in their business. The
immediate future for the bauxite is extremely promising with its boom period for this bauxite
considered imminent driven by demand for Asian countries like China, in which a substantial
fall in the home reserves as well as domestic production needs a massive increment in the
import of bauxite (Annual Report. 2018). Moreover, apart from the domestic reserves of
bauxite, there had been a sharp decline since the year of 2009. China has always been a
significant player within the globally traded market of bauxite and have planned to build
numerous 9 million tonnes in 1 year by the end of 2019.
The existing supplies of bauxite altogether with the planned development are
expected to eventually satisfy the globalized demand until and unless almost 100 percent is
being gained within the year of 2020 (Emerson & Nabatchi, 2015). The new projects would
be needed for the purpose of fulfilling the forecast demands with a subsequent deficiency in
supply for more than twenty five million tonnes by the end of 2025 and also more than fifty
million tonnes by the end of 2030 (Annual Report. 2018). Most of the global demands is on

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the basis of lower temperature or trihydrate bauxite that presently represents around 75
percentage of the Chinese imports.
Pacific Bauxite Limited had also started their project in the Solomon Islands that are
being placed for the core purpose of supplying higher quality and lower temperature or
trihydrate bauxite products directly into the country of China and hence gaining a major
shipping benefit. PBX is the Australian mineral explorer that mainly emphasizes on
exploration of bauxite, so that these are produced properly (Pacific Bauxite. 2020). One of
the most significant projects of this organization is the Darling Range Bauxite Project, which
is situated within Western Australia.
The respective acquisition of the project called Darling Range is highly reliable with
its subsequent strategy for building a portfolio of higher quality bauxite asset within the
targeted jurisdiction for positioning itself to help out in satisfying the forecasted near term
development within their globalized demand of bauxite. The management and board team of
the organization eventually complements with the corporate skills towards development of
their work and hence getting high advantages. This report outlines a detailed discussion on
ethics and governance for the popular and significant organization, Pacific Bauxite Limited
or PBX with relevant details related to ethics and ethical theories and concepts.
2. Discussion
2.1 Summary of Corporate Governance of the Organization
Corporate governance refers to the total collection of various mechanism,
relationships and procedures through which the corporations are being operated as well as
controlled (Guston, 2014). The structures or principles of governance are responsible for
identifying the total distribution of different responsibilities and rights amongst several
participants within the corporation (Emerson & Nabatchi, 2015). These participants include

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creditors, regulators, shareholders, managers, any other stakeholder and the board of
directors. It involve the processes and rules for making different decisions for the corporate
affairs. It is extremely important and significant to ensure corporate governance for its
distinct possibility of various conflicts of interests within the stakeholders, usually within the
upper management and shareholders (Bulkeley et al., 2014).
Pacific Bauxite Limited has included corporate governance in their business for
ensuring that better effectiveness and efficiency is being gained in the business without any
complexity or issue (Guston, 2014). For this purpose, they have extended their royalty
transaction by involving in an agreement with CCPL or Cylinder Cove Pty Ltd. The directors
of this particular organization include Brett Smith, Peter Lewis, John Ciganek and Pippa
Coppin and the company secretary is Suraj Sanghani. During March 2014, the respective
ASX Corporate Governance Council had released a 3rd edition of the various
recommendations and principles of ASX Corporate Governance Council, for ensuring that
the organizational management is maintaining corporate governance under every
circumstance (De Búrca, Keohane & Sabel, 2014).
Due to their maintenance of corporate governance, the organizational management of
Pacific Bauxite Limited is able to get involve to several successful and noteworthy project
works without any type of issue or complexity (De Búrca, Keohane & Sabel, 2014). The
approach is highly ethical and they do not face any problem, while execution of their business
activities. Moreover, the CEO of this specific organization has always concerned for the
individuals and better performance. It had been possible since the remuneration system is
extremely effective for the business. Major issues might arise, as soon as there exists a
misalignment within the informal and formal culture (Tricker & Tricker, 2015). As a result,
they have focused on the remuneration of their employees, so that they are highly motivated
towards work.

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There is an annual hike for each and every employee or staff in the organization, to
ensure that they are better incorporation of rules and regulations is being done efficiently and
effectively (Annual Report. 2018). Hence, the employees are extremely satisfied with their
approach and there exists lesser chance of employee turnover. They also have incorporated
commission and compensation methods for internet marketing as well as online advertising.
Remuneration is the payment or any other financial compensations that are being provided
for the exchange of different services performed by any particular employee (Yermack,
2017). Laos, Indonesia and the UAE have planned to build up new alumina refinery with the
core potential capacity of over 6 million tonnes in one year.
Moreover, Pacific Bauxite Limited has even provided several complementary
advantages, apart from the payments for ensuring that the respective mechanisms of this
aspect are fulfilled eventually. Rewards are also provided to the employees for ensuring that
they are highly motivated and satisfied with their work and would provide high productivity
under any circumstance (Tricker & Tricker, 2015). It has been possible with the successful
incorporation of corporate governance in their business. The composition of the board of
directors in PBX Limited is being made according to the Companies Act, 2013 and they have
included different decisions, on the behalf of the organizational management. Peter Lewis is
the Chairman of this organization.
He is an experienced Queensland based businessman, who has a long and successful
carer majorly in the property industry like Directorship at the Richard Ellis Ray White Group.
Moreover, he was also the Founder and Managing Director of Saville in Queensland as well
as the Chairman of the Queensland Rugby Union (Pacific Bauxite. 2020). Peter Lewis is the
Chairman of private mining organization called, Aurum Pacific Group that holds diversified
interests internationally and even within Australia. Aurum Pacific Group is eventually
associated with the organization of Vendors of Eight South Investments Pty Ltd. With his

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subsequent business experience, he had been able to add value to the interests within the
Solomon Islands.
The Chairman of the board, Mr Peter Lewis is an independent director of the
organization. The Non Executive Directors of this organization, Mr Craig Smith and Mr
Campbell McKenzie have resigned from their respective positions on 23rd December 2019.
The organization even advises that the Joint Company Secretaries, Ms Melissa Chapman and
Ms Catherine Grant Edwards have also resigned from their positions on 23rd December 2019.
All of these above mentioned non executive directors were non independent directors and had
to follow instructions of Mr Peter Lewis (Pacific Bauxite. 2020). Hence, the ratio of the
independent to non independent directors in this particular organization of PBX Limited is
1:2. Moreover, after resignation of these 2 Non Executive Directors, there would be proper
replacements, so that the production of the company is not hampered under any circumstance.
2.2 Board Orientation of Pacific Bauxite Limited
Board orientation can be referred to as the core procedure for properly providing the
members of the board with subsequent data that are required for their respective roles and
responsibilities within the company (De Búrca, Keohane & Sabel, 2014). The most
significant purpose of this type of orientation of board is providing relevant data regarding
the company and also about the members of the board regarding their respective duties and
responsibilities. It even serves in building a proper working relationship amongst the board
members, which could promote an ongoing support and also come to a specific agreement
about the process of carrying out the work (De Búrca, Keohane & Sabel, 2014). It is
extremely vital to learn about the requirements of members of the board for doing their jobs
as the best they can do.

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The first and the most significant step in this particular orientation process of the
board, which include proper development of an efficient procedure of board orientation
(Hermalin, 2014). Pacific Bauxite Limited has involved their key board members for
completion of their orientation session and also to make sure that adequate time is provided
for completing questions and answers. A good working relationship is being developed with
these board members and the management of the respective organization have ensured that
the most significant steps are being undertaken on top priority (De Búrca, Keohane & Sabel,
2014). The long term goals in PBX Limited are being achieved easily and promptly, as soon
as the organizational management has provided excellent opportunities in addressing the
potentially difficult problems surrounding overlapping the responsibilities. The summary of
the board orientation process within the organization of Pacific Bauxite Limited is provided
in the following paragraphs:
i) Shareholder - Agency: The first and the foremost orientation aspect of the Pacific
Bauxite Limited is for shareholder for agency. These are considered as the agencies of the
company (Bulkeley et al., 2014). The respective composition of the board is majorly
independent and is being installed by the various shareholders of the company, especially for
the CEO. Moreover, the board mainly focuses on the requirements of different shareholders,
such as for the dividend, profit and growth or development. Moreover, the main
communication of this particular organization includes remuneration report, balance sheet
like equity sheet and income statement (Deegan, Rankin & Tobin, 2002).
ii) Shareholder - Stewardship: The second important and significant orientation
aspect of the Pacific Bauxite Limited is for shareholder for stewardship. This stewardship is
the job to supervise as well as take care for anything like a property or an organization. The
most significant example of this stewardship would be the major responsibility to manage the
employees of a company (Milne & Patten, 2002). Shareholders are responsible for providing

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better stewardship to the employees and staff working within PBX Limited. The board
composition is mainly non independent, who know the process to run the organization and
also growing its assets. The internal board focus is given to the overall growth strategy and
capital management. The key communications of this specific aspect include the report of the
CEO, cash flow and balance sheet (Hermalin, 2014).
iii) Stakeholder - Managerial Branch: Another significant and noteworthy
orientation aspect of the Pacific Bauxite Limited is for stakeholders for managerial branch.
The respective composition of the board is majorly independent and are appointed for the
core purpose of satisfying maximum of the most powerful stakeholders (Voß & Kemp,
2015). The board orientation process mainly emphasizes on the requirements of the most
powerful stakeholder as well as the key communications of this specific aspect include
voluntary disclosures within Pacific Bauxite Limited.
iv) Stakeholder - Ethical Branch: The next important and significant orientation
aspect of the Pacific Bauxite Limited is for stakeholders for ethical branch. The board
composition of this particular organization is majorly independent and ideally for reflecting
the diversification of the stakeholders (De Búrca, Keohane & Sabel, 2014). This type of
board orientation majorly focuses on each and every stakeholder and ensure better
management of stakeholders. The main communications of this specific aspect include
voluntary disclosures and also focus on the corporate social responsibilities.
v) Resources: The fifth important and significant orientation aspect of the Pacific
Bauxite Limited is for resources (Tricker & Tricker, 2015). There exists a proper mixture of
the non independent and independent, however the mix of skills as well as contacts is also
vital for eventually securing the most noteworthy resources flowing into the organization of
PBX Limited. The board focuses over the external features like resource flow management

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and capital management. It even emphasizes on the resource providers and the main
communications of this specific aspect include having contingency on the best services or
needs for securing the resources of this specific organization (Milne & Patten, 2002).
According to the annual report 2018 of Pacific Bauxite Limited, they have been
focusing on the Asian markets majorly, so that the business is flourished without much
complexity and issue (Annual Report. 2018). Moreover, they gain maximum profit even at
the most difficult situations, since demand for bauxite mineral is quite high in these distinct
countries. It had been possible with their unique strategy and approach for employee
management. They have reviewed the duties of their employees properly and it is the most
likely orientation of its board (Kirchner & Sperling, 2018).
The most significant and important ethical theories that help to understand the entire
concept of ethical aspect in the organization of Pacific Bauxite Limited include utilitarianism
theory and deontology theory (Deegan, Rankin & Tobin, 2002). Utilitarianism theory helps in
successful determination right from wrong after emphasizing on the results. This particular
theory eventually holds that the most ethical selection is the one, which would produce the
best for the greatest number. The second ethical theory that could be applicable for the
organization of PBX Limited is deontology theory. It is a normative ethical theory, which the
morality of the action must be based on the fact that whether the action itself is correct or
incorrect under a series of rules and not considering the consequences of the actions
(Emerson & Nabatchi, 2015). These ethical theories are hence extremely important and
noteworthy for ensuring that the organization of Pacific Bauxite Limited is following ethical
impact and approach towards their business activities.

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2.3 Interpretation of the Organizational Communications with Legitimacy Theory
The legitimacy theory can be referred to as the core mechanism, which eventually
provides support to the companies in proper deployment and development of the voluntary
social or environmental disclosure for satisfying the social contracts, enabled by them
(Deegan, 2002). It is being observed that there exists a proper recognition of the goals as well
as the survival within the most turbulent environment. This particular theory of legitimacy
majorly highlights the extent until which these disclosures of social and environmental
aspects are being influenced by the boundaries, as established by the society for appreciation
and also penalizing the community, where the organization is operating (Milne & Patten,
2002).
The organization of Pacific Bauxite Limited can easily interpret the organizational
communications with the help of legitimacy theory. It comprises of role to explain the major
behaviour of the companies for deployment and development of their disclosure. The major
perceptions of social within the organizational activities are being reported as per their
expectations of the society (Deegan, Rankin & Tobin, 2002). PBX Limited would be able to
help out in understanding the organizational behaviour in deployment and communication of
the social responsibility policies. The most significant assumption of the legitimacy theory is
to fulfil the organizational social contract that allows PBX Limited in recognizing the
objectives and goals. It would require the adoption of the strategy of corporate social
responsibility for affecting several areas of activities, especially for management accounting
(Milne & Patten, 2002). Since, the organization of Pacific Bauxite Limited is mainly
concerned with bauxite exploration, they would be highly benefitted with the help of
legitimacy theory for ensuring better effectiveness and efficiency in the business.
The Australian Food and Beverage Industry has implemented legitimacy theory in
their business for ensuring that any type of risk related to corporate social responsibility is

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eradicated successfully without any complexity or issue (Deegan, Rankin & Tobin, 2002).
Moreover, the web based disclosures of different organizations are also needed to be
considered on top priority for being sure that the highest efficiency is gained eventually. It
also influences the disclosure of corporate social responsibility majorly. There had been
major evidence about the alternating theories of different aspects related to public perception
or expectations, which could deflect on the lower power companies (Kirchner & Sperling,
2018).
The organizational communications refer to the method, by which a company is
representing, presenting as well as constituting their organizational culture and climate. The
objectives and values of the company as well as organizational members are kept on top
priority for ensuring that the business activities are developing massively (Voß & Kemp,
2015). The organization of Pacific Bauxite Limited could easily and promptly interpret their
organizational communications with the help of legitimacy theory. It would be helpful for
them as these would bring out few of their efficiencies and gaps within communication
management. Moreover, due to such effectiveness in managing communications, the
organizational profit would also be increased to a high level and the company would be
getting major profit in their business (Deegan, Rankin & Tobin, 2002). The organizational
members would also be able to communicate amongst each other as per the legitimacy
theory.
3. Conclusion
Therefore, from the above discussion, a conclusion can be drawn that ethics and
governance is a well defined as well as enforced structure, which works for the subsequent
advantage of any individual, who is concerned after being sure that the respective
organization is adhered to the accepted ethical standards, formal laws and best practices to a

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high level. Any type of disapproved ethics and governance could be observed as poorly
structured, non compliant as well as ambiguous that could damage the financial growth or
image of the business. Since the structure of ethical governance would vary, several
companies would be incorporating few important and significant aspects, such as every
shareholder being treated fairly and equally to ensure that the shareholders are completely
aware of the rights, social, contractual and legal obligation to the non shareholder and
stakeholders should be upheld.
The board members should even possess the definite skills required for reviewing
different management practices. The companies should even define a proper code of conduct
for the board members as well as executives to appoint new people as soon as they are
fulfilling that specific standard. Various procedures and policies of ethics and governance
must be transparent for the relevant stakeholders. There are better efforts of employee
engagement for defining the matters getting settled. The above mentioned report has properly
described a detailed analysis of ethics and governance in the organization of Pacific Bauxite
Limited with relevant details like corporate governance in the organization, board orientation
and even interpretation of organizational communication with legitimacy theory.

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