CORPORATE GOVERNANCE

Corporate Governance in Australia

Corporate Governance in Australia

Introduction

State of corporate governance in Australia has received the media and policy attention in the past year and a half; both social and financial implications of major corporate collapses have come to light. The best-known in the local financial press were management studies irregularities (and accusations of illegal behavior management) in the HIH and OneTel, with the supporting role of companies such as Harris Scarfe, and AMP. Foreign players in the unfolding drama of management include American Corporation Tyco, Enron and Global Crossing.

Economists have not been active participants in developing the agenda of Australian debate on corporate governance issues. Indeed, what is lacking in the debate so far is the analysis of corporate governance using the tools and concepts familiar to students of economics. Financial economists, in particular, have a rich set of empirical data that allow us to evaluate the need and likelihood of success of reform options. (Kay 2004 1)

Background

In 1961-2 Australia adopted the uniform company's legislation, which was essentially based on the Victorian Companies Act 1958. This was done after the Companies Act of the United Kingdom in 1948, but has some differences including the authorized statement of the basic responsibilities of directors, breach of which was stupid made subject to criminal penalties. This provided a model for Singapore and Malaysia, are still existing legislation, as amended. In late 1970 New Zealand National Government in favor of this model, but by 1981 Australia had opted for more sophisticated companies of the Code. Corporate governance has become a political football. (Sternberg 2007 20)

Purpose

The purpose of this research paper is to look into the details of corporate governance and its relation to business ethics. And also explain why ethics an important role in the development of corporate governance works. It will explore relation between corporate governance and business ethics by looking at various aspects of corporate governance that might have an impact on how business ethics is being supposed and adept along with value tenets as new corporate governance developments that might have an impact on shareholder reputation and practice of business ethics have to be reviewed. In the end, an assessment of BHP Billiton corporate management strategy will be highlighted.

Corporate Governance

Social Sciences offer a diverse and sometimes puzzling array of definitions of corporate governance. According to one extreme point of view, the term refers to ways in which shareholders of firms seek to secure an adequate return on their investment. This definition is consistent with the economic sector is called the agency theory, in which shareholders are considered the principles of the firm, their agents, managers, and major deals with the dilemma of monitoring managers and align their interests with shareholders in order to maximize the market value of the firm. Although critics argue that this definition is too narrow, some organizational theorists such as Gerald Davies and Neil Fligstein points, as is the economy-oriented perspective has long been dominated by the United States of popular discourse and public policy decisions(Hart ...