CORPORATE GOVERNANCE

Research Report: Corporate Governance

Executive Summary

Corporate Governance is a set of economic and administrative mechanisms by which rights and forms of stock ownership structure of corporate control are realized; the system of interactions between company management, its board of directors, shareholders and other stakeholders realize their interests. This paper looked into the corporate governance statement for a consolidated company formed with the merger of two separate companies that were sole trading businesses. The provisions of governance as laid out in the ASX Listing Rules, is discussed that shows that the company can attain benefits in terms of organizational performance if it simply complies with the rules and the provisions. This showed that the company can also depart from the rules provided the rules do not seem to fit into the corporate identity of the new expanded company. Lastly, some recommendations are given in order to provide the company a list of measures to adopt good governance practices.

Table of Contents

Executive Summaryii

Introduction1

Findings2

Comprehensive Corporate Governance Statement for the Expanded Organization2

Compliance with the ASX Listing Rules on Corporate Governance5

Departures from the ASX Recommendations for Best Practices6

Group's Opinion and Sufficiency of Current Disclosure7

Conclusion8

References9

Introduction

Many times employers complain about the lack of funding resources and partners to advance plans expansion of their businesses. The truth is that even in situations of high liquidity in the market and in the presence of projects and initiatives seems very attractive; many entrepreneurs have no access to fresh resources. Corporate Governance is a set of economic and administrative mechanisms by which rights and forms of stock ownership structure of corporate control are realized; the system of interactions between company management, its board of directors, shareholders and other stakeholders realize their interests (Shleifer, Vishnu, 2000, pp. 737-783). Through an efficient, corporate governance system, companies seek to obtain the following:

A better distribution of powers between different structures of the company such as the board, and CEO.

Clarifying the functions of the board of directors (for example indicating independent directors)

The creation of oversight committees with expertise in areas where there are potential conflicts of interest (King, Levine, 1993, pp. 513-42).

This research report aims to look into a well-developed corporate governance statement for a single, public limited company as per the requirements of the ASIC (Australian Securities and Investments Commission). The firm emerged as a result of a merger between two sole trading businesses. The proposal for the new company calls for an expansion in addition to inviting the public to subscribe to 1 million shares. This essay looks into its corporate governance to be able to highlight the best effective practice that can lead to a good structure of corporate governance for the new entity. Furthermore, the essay will look into the compliance with the listing rules of the Australian Stock Exchange (ASX) and discuss the recommendations for these rules.

Findings

Comprehensive Corporate Governance Statement for the Expanded Organization

The board supports the view that strong corporate governance can add to the performance of the Company, create shareholder value and stimulate the confidence of the ...