Corporate Governance and the 2012 Failure of the Hastie Group (Asx)
2789 Words12 Pages
Title: Corporate Governance and the 2012 Failure of the Hastie Group (ASX)
An outline of, and brief discussion of the importance of, the bases or criteria for the review of the organisation’s governance (eg, refer to which standards or guiding principles are relevant for the review) and why you need to use them.
A brief critical review of the relevance of concepts, principles, standards or other tools and techniques learnt during this subject, in conducting your review
A list of recommendations for improvement based on your review
Word Count: (Introduction to Conclusion) 2,445
Hastie Group was an ASX listed Engineering Group that entered into voluntary administration on May 28th 2012.…show more content…
At the least the board will have operated outside the Australian Securities Exchange (ASX) Corporate Governance Principles and Recommendations (ASX 2010, p13-49). These principles form the basis of good corporate governance ideas in Australia and are designed to optimise corporate performance and accountability (ASX 2010, p5) and draw from the ‘if not why not’ philosophy.
The board of Hastie have appeared to failed in all four key functions of the board (Tricker 2012, p174, Fig 7.1) being Strategy Formulation, Policymaking, Monitoring & Supervision and Accountability which could reasonably be judged that the Hastie Board of Directors had operated outside of 7 of the 8 principles (the only Principle seemingly being observed was ‘Principle 8 – Remunerate fairly and responsibly) (ASX 2010, p40) described so the review will focus on Principles 3 and 4.
‘Principle 3 - Promote ethical and responsible decision making’ (ASX 2010 p22)
The ASX recommends in Principle 3 that companies should actively promote ethical and responsible decision making, in part by clarifying the standards of ethical behaviour required of the board, senior executives and all employees and encourage the observance of those standards. The Hastie Group was a decentralised business and relied on good corporate policy that could reach across geographic and business unit boundaries and they in fact had such a statement ‘Code of Business Conduct’ last reviewed by the board