South32 Ltd: Strategic Initiatives and Corporate Governance Analysis

This report provides a comprehensive analysis of South32 Ltd's corporate governance, focusing on its ethical behavior, transparency, and strategic direction. The study examines the company's annual reports to identify key strengths, such as its commitment to ethical standards and stakeholder engagement. The report delves into the board's orientation, highlighting the influence of independent executives and the company's risk management framework. Furthermore, it interprets South32 Ltd's communication strategies in the context of legitimacy theory, emphasizing its efforts to maintain strong relationships with stakeholders and promote a positive image. The analysis covers various aspects, including financial performance, community involvement, and the company's approach to diversity and inclusion. The report concludes by summarizing the company's strategic initiatives and their impact on corporate governance.

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Name of the student
Name of the university
Author note

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Executive summary
In this study, it has been identified that ensuring the standard strategic direction as well as
collaborative approach towards the stakeholders, South32 Ltd has established its strong strategic
value in the market. Analyzing the corporate governance report of South32 Ltd, it has been
identified that ethical behavior and transparency are the major strategic strength that has made
the company popular in the global market. In the most recent annual report of South32 Ltd it has
been identified that in the running year, maintaining the four standards of the company values,
the company has promoted its excellence in the market. It is true that strong dominance off
independent executives is visible in the board activities. Analyzing the communication initiatives
adopted by the company, it can be said that following all the aspects of legitimacy theory,
South32 Ltd has maintained its strong contribution towards the stakeholders.

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Table of contents
Introduction......................................................................................................................................3
Summary of corporate governance..................................................................................................4
Board orientation.............................................................................................................................6
Interpretation of company communication strategy........................................................................7
Conclusion.......................................................................................................................................9

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Introduction
Corporate governance covers the major portion of the annual report as it significantly reflect the
organizational behavior as well as its collaborative approach towards the customers (Van Zijl,
Wöstmann & Maroun, 2017). By developing the natural resources, organizations focus on
improving the human life that strategically help them to generate potential growth in the market.
The South32 Ltd is a popular mining and diversified products selling company, which has
ensured its strong global presence in the market. Introducing the exceptional skills the company
aims to share the values to make its different position in the market (South32.net, 2020). The
company produces different type of metals and managers are committed towards developing
strong relationship with the partners by using the potential resources. In order to generate the
better outcome in the company, managers are highly responsible for developing the trust worthy
on the customers’ mind. In order to promote better life to the people, the company has developed
it strong business values as well as driven its strategic goals (South32.net, 2020). Ethical dignity
can be considered as one of the important strategic move adopted by the company. In case of
achieving the strategic goal, the risk appetite is being set by the board of directors. In order to
maintain the efficiency, each member of the group handle different activities related to the
business.
Analyzing the market growth of South32 Ltd, it has been identified that in the running year the
business revenue of the company has reached almost 694.8 crores USD. Per share revenue of the
company has reached 2.15 TTM in the running year (South32.net, 2020). Community and
society are the major part in the operational process of the company. It is true that the company
invests in exploring the activities outside and inside of the portfolio and tries to maintain its
growth process towards diversity (South32.net, 2020). On the other hand, in terms of increasing

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the external opportunities in the market, the company has developed strong relationship with the
stakeholders. On the other hand, it is true that reducing the operational risk, the board members
have made their significant contribution in maintaining the transparency. This initiative have
helped the company to deliver the value in unique cultural, social and legal context. As it is a
customer centric business platform, in that case, satisfaction of the stakeholders’ needs as well as
demands can be considered as the important strategic move adopted by the company
(South32.net, 2020). In terms of supporting new facilities and infrastructure, the company has
promoted business opportunities as well as employment for ensuring the betterment of the
community.
The purpose of this study is to critically analyze the strategic initiatives adopted by South32 Ltd
while maintaining the corporate governance and ethical code of conducts. In the oar orientation
process, utilization of resources and the contribution of board members have been critically
examined. In the last section of the report has examined the ongoing communication process and
compared it with the legitimacy theory.
Summary of corporate governance
Analyzing the corporate governance report of South32 Ltd, it has been identified that ethical
behavior and transparency are the major strategic strength that has made the company popular in
the global market (South32.net, 2020). The purpose of this organization is to ensure the proper
utilization of the resources for generating betterment for human life. Maintaining the standard of
care, togetherness, trust and excellence, the company has developed its organizational values.
Employee health as well as safety and well-being are also included in the corporate function of
the company (Rossouw, 2019). The managing board of the company is comprised with total
numbers of nine directors. Analyzing the ratio of both the independent as well as non-executive

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directors on the board, it has been identified that there are seven independent and eight non-
executive directors who are maintaining their strong commitment towards achieving the
corporate standard of the company.
Analyzing the role of governing body in South32 Ltd, it has been identified that the governing
body has been oversight by the culture. In that case, the CEO of the company tries to
demonstrate the trust, value, care and togetherness in the workplace (South32.net, 2020). The
values of the governing body gets influenced based on the working approach of individuals in
the company. In terms of protecting the interest of the stakeholders, the company tries to
acknowledge the unique relationship between communities and resource companies. In order to
maintain the ongoing trust of the stakeholders, the company tries to satisfy the changing
expectation of the customers. In order to approve the South32 Ltd remuneration framework, the
contribution of the CEO is very important (South32.net, 2020). Considering the succession and
performance, the risk management framework is being developed by the CEO of the company.
On the other hand, it is true that monitoring the implementation of the principles as well as
policies of corporate governance measurable objectives are being set by the board. Therefore, it
can be said that the chairperson of the company is the independent director who can contribute in
facilitating the constructive approach in the workplace. In terms of developing the strong
relationship between the management and board, the chairperson plays the significant
contribution, by encouraging the openness and debate fostering approach, the chairperson can
promote high performing collegial team in the workplace. It is true that the dominance of
independent directors are quite high in terms of controlling the functional process in the
company. However, it is also true that maintaining the balance in thee functioning process, the
board required both the non-executive and independent directors. The CEO of the company is

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non-executive director, who demonstrates the organizational behavior that is aligned with the
organizational values (South32.net, 2020).
The human resource department of the company plays an important role for controlling the
remuneration process. After the establishment of permanent board committee, the remuneration
committee is being formed. In this process, by reviewing the remuneration framework, the
specific application for the CEO and the chairperson are being developed (South32.net, 2020).
Determining the annual performance as well as reward process, the evaluation of their
performance is being done. Communication with the stakeholders is an important criterion in the
remuneration report that influences the final outcome. During the periodical changes, the
remuneration report is being examined by the gender. The minimal shareholding requirements
for both the lead team leader and non-executive directors are being one. In the end, approving the
remuneration report, the contribution of the stakeholders is very important.
Board orientation
In the most recent annual report of South32 Ltd it has been identified that in the running year,
maintaining the four standards of the company values, the company has promoted its excellence
in the market (South32.net, 2020). In the running year, the company has adopted strong strategic
move towards maintaining the corporate governance. In the running year, staff injury has got
reduced almost 12% and 981$ million taxes have been paid by the company. As the purpose of
the company is highly concentrated towards the community, in that case, for the community
betterment 17.3$ million US dollar have been invested. In order to ensure the well position of the
company, the chairperson of the company Karen Wood has served the company by following the
formative approach (South32.net, 2020). On the other hand, it is true that the CEO of South32
Ltd has declared the 2.8 % share. It is true that due to the strong commitment of the board

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members towards delivering the stakeholder satisfaction, almost 84% has been delivered as the
stakeholder return (South32.net, 2020).
On the other hand, reshaping the company portfolio, the CEO of the company has generated high
potential opportunities in the market. On the other hand, it is true that in the running year group
production has got increased almost 3% (South32.net, 2020). On the other hand, it has been
identified that accessing the current operational system, the CEO has improved the risk
management system. The fundamental shift in the global market has influenced the decision
making process of the board of directors. In the growing value per share, operating performance
of the team members has got strengthened. By continuing this, it can also be said that promoting
the business opportunities, leadership capabilities have got underpinned. In terms of optimizing
the performance, the CEO of the company has unlocked the potential resources and enhanced the
new opportunities in the market. In order to promote better life to the people, the company has
developed it strong business values as well as driven its strategic goals (South32.net, 2020).
Ethical dignity can be considered as one of the important strategic move adopted by the
company. In terms of delivering the company purpose properly, investing towards the
community, social empowerment has been ensured. In the recent media release, it has been
identified that the company has developed recent agreement for copper supply in North America
(South32.net, 2020).
The extension has been approved by the CEO and adopting the 50-50 joint venture strategy
business relationship with NANA and Triogy has been developed. For the Bushfire assistance
South32 Ltd has pledged additional AU$500000 (South32.net, 2020). The board directors have
made the significant contribution while reducing the risk in the risk in the company. Ensuring the
wellness and safety in the workplace, the company has promoted betterment in the company.

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Analyzing the operational performance of the board members, it has been identified that carrying
the quality assurance program profits and cash flow have been properly maintained by the board
of directors (South32.net, 2020). In order to generate the better outcome in the company,
managers are highly responsible for developing the trust worthy on the customers’ mind.
Interpretation of company communication strategy
The concept of legitimacy theory has been developed for supporting the environmental and
social disclosure of the company. It can be considered as the unique mechanism that is developed
for enabling the social contracts (Patten, 2019). Comparing this concept with South32 Ltd, it can
be said that communication with the stakeholders is the important part in the remuneration
framework of the company. The performance evaluation program in the company is also being
analyzed based on the communication approach as well as cultural values that are being
promoted by the board of directors. By critically analyzing the organizational behavior in
South32 Ltd, it has been identified that inclusive workplace environment is being promoted by
the company for ensuring the people engagement. The company gives major focus towards
understanding the behavior and culture of the stakeholders for holding their interest towards the
company.
Stakeholder theory can be considered as the central part in the concept of legitimacy theory
(Rezaee, 2019). By defining the notion of the stakeholders as well as individuals, basic object of
the legitimacy concept is to hold the organizational attention. Analyzing the organizational
behavior towards its stakeholders, it has been identified that the company is genuinely committed
towards ensuring the mutual benefits for the contractors, customers, partners and suppliers
(Şahin, 2018). By continuing this, it can be said that the operational initiatives of the company is
being developed for openly communicating with the stakeholders for maintaining their

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commitment. In terms of ensuring the togetherness, safety of the employees is being highly
appreciated by the company (South32.net, 2020). It is also true that board of directors also play
the important contribution while promoting the wellness to the stakeholders. Comparing it with
the stakeholder legitimacy, it can be said that it is theoretically being implemented for the
broader perception to satisfy the societal desires. The main theme of the stakeholder theory is
being developed for developing the interrelationship between the organizational values and
stakeholders’ benefits.
Social and environmental leadership are the important part of the strategic approach followed by
South32 Ltd (South32.net, 2020). By reducing the wastage, biodiversity impacts, land
requirements, carbon emission and water wastage, ensuring the business resilient the company
has changed its climate change strategy. In terms of promoting the social wellbeing, the company
has brought employment opportunities for ensuring the environmental, social and economic
benefits. On the other hand, it is true that following the emerging technological trend, the
company has also brought the technological innovation for improving the mindset of work safety
(South32.net, 2020). The company has also taken the initiative towards reducing the
environmental foot print. Therefore, following the elements of stakeholder theory it can be said
that the strategic decision adopted by the company for wellbeing of the stakeholders can ensuring
the effective organizational behavior (South32.net, 2020). In the concept of legitimacy theory, it
has been identified that both the social and environmental principles are being included in terms
to ensuring the better communication. Analyzing the communication process in the company, it
can be said that maintaining all the requirements of openness, diversity and safety, the company
has significantly followed the legitimacy theoretical approach in the workplace (South32.net,
2020).

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Conclusion
In this study, it can be concluded that by promoting the social as well as environmental
wellbeing, the company has maintained its ethical initiatives towards the community betterment.
It is also true that for promoting the strong relationship with the stakeholders, various strategic
moves have been adopted by the company. It is true that strong dominance off independent
executives is visible in the board activities. Analyzing the communication initiatives adopted by
the company, it can be said that following all the aspects of legitimacy theory, South32 Ltd has
maintained its strong contribution towards the stakeholders.

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References and bibliography
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Hummel, K., & Schlick, C. (2016). The relationship between sustainability performance and
sustainability disclosure–Reconciling voluntary disclosure theory and legitimacy
theory. Journal of Accounting and Public Policy, 35(5), 455-476.
Nurhayati, R., Taylor, G., Rusmin, R., Tower, G., & Chatterjee, B. (2016). Factors determining
social and environmental reporting by Indian textile and apparel firms: a test of
legitimacy theory. Social Responsibility Journal.
Patten, D. M. (2019). Seeking legitimacy. Sustainability Accounting, Management and Policy
Journal.
Rezaee, Z. (2019). Business Sustainability, Corporate Governance, and Organizational Ethics.
John Wiley & Sons.
Rossouw, G. J. (2019). The ethics of governance and governance of ethics in the King
Reports. Journal of Global Responsibility.
Şahin, A. (2018). How Principles of Business Ethics Relates to Corporate Governance and
Directors?. European Journal of Economics and Business Studies, 4(3), 22-27.
South32.net (2020). retrieved from: https://www.south32.net/community-society [Accessed on
14th Feb, 2020]