Corporate Governance Evaluation of David Jones Ltd, Billabong International Ltd, Ten Ltd and Energy World Corporation Ltd

5766 Words Aug 20th, 2011 24 Pages
FINS3626 Group Assignment
Evaluation of BBG, DJS, TEN, EWC
Executive Summary
Phenomenal growth of interest in corporate governance has emerged in recent years. The body of literature on the subject has grown markedly in response to successive waves of large corporate failures. Furthermore, there have been numerous attempts to define what constitutes ‘good corporate governance’ and to provide guidelines in order to enhance the quality of corporate governance.

It must, however, be acknowledged that while everyone advocates and wants corporations to maintain ‘good corporate governance’, measuring the quality of corporate governance structures of the Australian companies has been, at best, very difficult.

The major contribution of
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In particular, the independent judgement of board members is crucial in the bearing on board decisions to ensure that this goal is achieved. 1. Does the board comprise a majority of independent directors? Ensuring that a majority of independent directors to monitor the actions of executive directors helps to address the potential for, or perception of, conflict of interest of executive director involvement in board decisions. A good corporate governance structure would encourage the board to regularly assess whether each non-executive director is independent. 2. Are the roles of the chairperson and chief executive officer (CEO) exercised by different individuals? This clear division of responsibility would help to counterbalance the power and influence of the CEO in the decision making of the company’s directors. Furthermore, this would enhance the supporting role that may be assumed by the chairman in being the CEO’s confidante. 3. Has the board established a nomination committee which consists of a majority of independent directors? The board should be structured in such a way that it ensures an appropriate mix of skills and expertise to govern the company and enhance its performance role. The committee should be structured in such a way that a majority of independent directors can enhance the board’s

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