Blue Sky Alternative Investments Limited

How the latest edition (3rd) of the ASX Corporate Governance Principles plausibly halts the failure of Dick Smith Electronics will be discussed in this essay. I argue that ASX Corporate Governance Principles is one of the corporate governance practices that many listed entities in Australia should comply with in order to achieve good corporate governance preventing the collapse of corporations and increasing investors’ confidence. Regarding Dick Smith Electronics as a listed entity, it would survive and continuously operate as a biggest Australia electronic retailer if the better application of this practice is fully adopted.

Maintain and run a healthy institution and organization is like a teamwork. An effective governance is the fundamental of a successful corporation. Board members should make a comprehensive policy system for the company, they also should improve and modify the policies with the times. They also need to make significant strategy, mission, and vision together with the regular meeting. In this Sunbeam case, the board members with the CEOs might lack communication, so made a not very appropriate strategy and did not implement it well. Finally, oversight is one of the important roles of the board members. In this case, the board members should pay attention the strategy’s implement situation, how the strategy was implemented instead of just focus on the stock price and share of values. It is useful to periodically review the activities to ensure everything goes on as

* The Board of Directors should approve the proposed option trading policy and should choose buying a call option on a listed stock as their option investment strategy.

Preparing for the Future Risk Factors Corporate Governance Board of Directors, Corporate Auditors and Operating Officers Financial Section Corporate Information

Corporate governance in itself has no single definition but common principles which it should follow. For example in 1994 the most agreed term for corporate governance was “the process of supervision and control intended to ensure that the company’s management acts in accordance with the interest of shareholders” (Parkinson, 1994)1. Corporate governance code is not a direct set of rules but a self-regulated framework which businesses choose to follow. This code has continued to change in the past 20 years in accordance with what is happening in the business world. For example the Enron scandal caused reform in corporate governance with the Higgs Report which corrected the issues which were necessary. Although it does not quickly fix problems, it gives a better framework to

This approach has already provided several important benefits to First Commonwealth’s board. First, it isolates those areas where it is important for the board to perform well, including a variety of governance issues. While the company was developing its directors’ scorecard, it was also complying with both the Sarbanes-Oxley Act and a new set of listing standards from the New York Stock Exchange, which imposed significant requirements on the audit, governance, and compensation committees.

Essential for a firm’s survival and its ongoing success is effective corporate governance. Indeed, when executed effectively, corporate governance helps to not only “prevent corporate scandals, fraud and civil and criminal liability but also enhance a company's image in the public eye” (Sun, 2010). This, in turn, positions a firm as a self-policing institution, accountable and worthy of shareholder and debtholder capital. Responsible for charting the strategic direction, approving policy and ensuring that the mission statement of a firm is carried out, is the Board of Directors. (Coastal Community , 2013) notes that “directors, also, have a responsibility to maintain the balance between economic and social goals and between individual and collective goals, reflected through the efficient and effective use of limited resources. The Board of Lehman Brothers is an example of a board that failed to execute several key corporate governance responsibilities. These key responsibilities of good corporate governance fall under four main pillars according to (In Share ) 1) Accountability (ensure that management is accountable to the board and that the board is accountable

The board is responsible for the governance of risk. It should establish a sound system of managing risk and internal control.

The cardinal principle of mechanics of administration is that a compelling board ought to head each establishment, which is altogether in charge of the accomplishment of the association. The part of the board is to give .The board assumes a critical part of heading the association under the ambit of fitting administration and powerful controls that empowers dangers to be evaluated and oversaw .

Boardrooms are changing. Directors can no longer be passive. They must be alert, accountable and active. The board’s performance has come under more scrutiny. Shareholders, members and staff expect more from their boards.

Absolutely key in this endeavour are the leadership of the chairman of a board, the support given to and by the CEO, and the frankness and openness of mind with which issues are discussed and tackled by all directors. 4. The challenge should not be underrated. To run a corporate board successfully is extremely demanding. Constraints on time and knowledge combine with the need to maintain mutual respect and openness between a cast of strong, able and busy directors dealing with each other across the different demands of executive and non-executive roles. To achieve good governance requires continuing and high quality effort. 5. The Code’s function should be to help boards discharge their duties in the best interests of their companies. In recent reviews of the Code, the FRC has focussed on changing the “tone” of the Code by making limited but significant changes to signal the importance of the general principles which should guide board behaviours. It is to be hoped that these changes will promote greater clarity and understanding with regard to the tasks of a board and that communication with shareholders will be more effective as a result. 6. Chairmen are encouraged to report personally in their annual statements how the principles relating to the role and effectiveness of the board (in Sections A

♦ Monitor management performance. ♦ Map out the mechanisms for internal and external liaison and communications. ♦ Define how the Board will operate including: What information or reports it requires on a monthly or quarterly basis. How, with what data, and by what means, it will constantly monitor management performance and the financial progress of the company. How it will evaluate its own performance at least once every year. ♦ Ensure that the company is properly managed and for the attainment of lawful objectives. ♦ Ensure that the company’s affairs are not managed or conducted in a manner oppressive to any of its shareholders or for fraudulent purposes. ♦ Ensure that the company complies with all statutory requirements.

The governance of the company consists of a board of directors, executive officers, and board committees. The board of directors are responsible for “establishing broad corporate policies, setting strategic direction, and overseeing management, which is responsible for the day-to-day operations of the Company56.” Assisting the board of directors are the following committees57

“Corporate Governance is the acceptance by management of the inalienable rights of shareholders as the true owners of the corporation and of their own role as trustees on behalf of the shareholders. It is about commitment to values, about ethical business conduct and about making a distinction between personal and corporate funds in the management of the company”.

Corporate governance is a key term to understand and it is increasingly important part of running a successful company. The system has evolved over the years, guided by the challenges and misjudgements of the corporate world.