Application Of Corporate Governance Principles For Corporate Failure

1154 Words Apr 11th, 2015 5 Pages
Application of corporate governance principles prevent corporate failure (One.Tel Ltd case)

Introduction an basic concepts
It is notable that recalling the past two centuries and all departments of the financial system, there have been only handful failures in Australia (Davis, 2004, p. 10). In recent decades, however, some large and famous companies unexpected collapsed, such as Pyramid Building Society and most recently HIH groups and medical insurance providers UMP (Davis, 2004, p. 237).

There is not an exclusive definition regarding what ‘corporate failure’ means (Rankin, Stanton, Ferlauto, McGowan, & Tilling, 2012, p. 365). In simple words, a company is said to have failed when it cannot repay its financial promises (Davis, 2004, p. 10). There is a strong link between weak corporate governance and failure. Corporate governance is the framework of rules and systems that the corporations are controlled by (Rankin et al., 2012, p. 188). The ASX Corporate Governance Principles must be applied to all ASX listed entities. The application of the principle, in the council’s view, will bring a good governance outcomes (Council, 2014, p. 3). In practical, the different application of the principle can lead to different outcomes. In my essay, three better applications will be recommended to prevent the failure of One.Tel, a group of Australian based telecommunications companies.

Background and analysis the process of collapse
One.Tel began operations in May 1995. At first, it…
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