corporate-governance(1)

ExecutiveSummaryAsyoucansee,thisreportisdividedintofiveparts:theintroductionpart;thebriefdemonstrationoftheconnotationsofcorporategovernanceandinternalcontrol;the2significantprinciplesinASXprincipleandtheircontactswiththeinternalcontrol;theevacuationofANZrelatedtothe2importantprinciples;thelastpartistheconclusionpart.Fromtheoutlineof,itiscleartoseewhatthethemeofthisreportis.Infact,thisreportmainlyfocusesonthe2principlesthatwouldeffectivelypromotethelong-termdevelopmentofthecorporate.The2principlesare“Structuretheboardtoaddvalue”and“Recognizeandmanagerisk”.ThisreportalsotakestheANZasexample,describingtheproperstructureofitsboardanditshigh-levelriskmanagement.ThepurposeofthisreportistogivesincereadviseontheaspectofCorporateGovernance.TableofcontentsExecutiveSummary..........................................................................................................................11.Introduction...................................................................................................................................22.CorporateGovernance..................................................................................................................23.ASXPrinciples..............................................................................................................................34.EvaluationofANZ........................................................................................................................55.Conclusion....................................................................................................................................7References.........................................................................................................................................71.IntroductionThisreportwillmainlyfocusonthephenomenonofcorporategovernance.Therewouldoccursomeeffectfactors,suchasthecontrolenvironmentandidentifyrisks,duringthecorporategovernance,whichwould,tosomeextent,determinethedevelopmentprospectofthecorporate.AfamousmanagerialistJoan.Margarita(2005,p.20)eversays,“Ifnotmeasureit,youcannotmanageit.”Therefore,thisreportisgoingtohaveadetaileddescriptionofthesetwofactors,whichwouldplayimportantroleincorporategovernance.2.CorporateGovernance2.1ImportanceofCorporateGovernanceAccordingtoInvestopedia,corporategovernancemeansthat:itisasystemofregulations,studiesandprocesuresthatacompanyhastodesignandmanage.Themainrequirementsofcorporategovernanceistobalancetheprofitsofthevarietiesofshareholdersintheenterprise,whichinvolvesitsstockholders,management,consumers,provoiders,investors,administrationandthespecificcommunities(IoanConstantin,2010).2.2RelationshiptoInternalControlBothInternalControlandCorporateGovernanceareeffectivemanagementsofthecorporatefromdifferentlevels.Internalcontrolissetupbytheauthoritiestoperformmanagementgoalandaseriesofrules,policiesandimplementationproceduresoftheorganization,whilecorporategovernanceisaboutallthestakeholdersoftheresponsibility,right,relationshipbetweeninstitutionalarrangements.Theyhavecloseconnections.Anappropriateinternalcontrolhasabilitytoenhancethequalityofthecorporategovernance,whilstpropercorporategovernanceplayanessentialroleintheprocessofanefficientinternalcontrol.Theirconnectionscanbeembodiedonthefollowingaspects.Firstly,convergenceofthemanagement’scenter.AccordingtotheresearchfromtheCOSO(Wikins&Haun2014,P.48),itsaidthatboththeboardofdirectors,management,anditsofficialsneedtoassumeshardresponsibilityoftheresultofinternalcontrol.Andamongwhich,themostinfluentialelementistheboardofdirectors.Andundisputed,thekeycomponentsarerunnersandtheboardofdirectionsintheprocessofCG.Secondly,theconsistencyonthemacrogoals.Themaingoalofinternalcontrolofistodecreasemendaciousinformationsontheaspectofaccounting,andensurecapitals’safetyandintegrity.Thefundamentalgoalofinternalcontrolistorealizetheobjectivesetbythewholeenterprise.Andtheobjectiveofcorporategovernanceistoensurethattheenterpriserunsontherighttrack,topreventtheinterestsofshareholdersdamagedfromthedirectorsandthemanagers.Soundcorporategovernancecanassuretheenterprisetargetbeingachieved.Therefore,theultimategoalofinternalcontrolandcorporategovernanceiscompatible.3.ASXPrinciples3.1Descriptionof2principlesMostanalystsidentifytwoprinciplesincorporategovernance(ASX2014,P.4),whichisthesecondprincipleandtheseventhprinciple.Thesecondprincipleiscalled“Structuretheboardtoaddvalue”.Itrequiresthatalistedentityshouldhaveaboardofanappropriatesize,composition,skillsandcommitmenttoenableittodischargeitsdutieseffectively.Theseventhprincipleiscalled“Recognizeandmanagerisk”,whichdemandsthatalistedentityshouldestablishasoundriskmanagementframeworkandperiodicallyreviewtheeffectivenessofthatframework.3.2TherelationshiptoInternalControlAgoodboardofdirectorsincorporateorganizationcanspendlessextracostontheimprovementofcontrolenvironment(Wilkins&Haun2014,P.49).Astothepropergovernance,itissignificanttohaveahighperformingandeffectiveboard.Theboardshouldbemadeupofapropernumberofindependentnon-executive