Corporate Governance in Australia After Hih and Globalisation

ASX’s Corporate Governance Principle is one of the main sources of regulatory and best practice guidance on corporate governance topic; its approaches are considered to build a series of standard basis to administrate corporate behavior via modernising companies’ corporate governance in order to face both Australian and international market competitions. There have been 3 editions of corporate governance principles and recommendations, modified in

Corporate governance defined as the system of rules, practices and processes by which a company is directed and controlled. Balancing the interests of the stakeholders is essential involves in a company, which include its shareholders, management, customers, suppliers, financiers, government and community. There are five major elements of corporate governance, which are, board commitment, good board practices, functional and effective control environment, transparent disclosure, and well defined shareholder rights. To prevent corporate scandals, fraud and the criminal liability of the organization, good executed corporate governance is important and must apply and respect in the organization. There have a relationship between corporate governance and internal control, for example, the more in corporate governance, the more of internal control in the organization and the less of fraud occur. One of the tasks and goals of the corporate governance is to ensure there have adequate internal control within organization to protect the organization from any conflicts for the benefits of

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

The ‘principles-based’ model of corporate governance is applied in Commonwealth countries. Under this model companies are required to report that they have followed the governance principles laid down in the codes or to explain why they have not. (Tricker 2012)

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.

All companies, including those operating in the multimedia industry are controlled and monitored by the Australian Securities and Investments Commission (ASIC). There are two type of companies, private companies and public companies. Each company has a management team called a board of directors. Usually, each director oversees and makes decisions for a section of a company, for instance a finance department. As companies have more shareholders/owners than unincorporated businesses, they are more accessible to capital to expand and upgrade, although there are strict legal requirements to protect shareholders.

The Australian Securities and Investments Commission (ASIC) is an independent Australian government body that acts as Australia’s corporate regulator. They contribute to the economic reputation and wellbeing of Australia by ensuring that Australia’s financial markets are fair and transparent. The role of the ASIC is to enforce and regulate company and financial service laws and to protect Australian consumers, investors and creditors. ASIC’s priorities of promoting investor and financial consumer trust and confidence, ensuring faith, orderly and transparent markets and providing efficient and accessible registration, allow for the institution to fulfil their role. As an independent Commonwealth government body, the ASIC reports to the

Interacted with the Australian Securities and Investments Commission (ASIC) through CAS system to facilitate matters such as registering, deregistering and changing company details.

Most of the Australian corporation law has been brought from Company Law of United kingdom. Australian corporation law legally structured by only one national statute, i.e. Corporation Act 2001. The Australian Securities and Investments Commission is the only regulatory authority who administrate this statute (Corporation Act 2001) throughout the whole nation. ASIC regulates Australia’s corporate, markets and financial services. This authority is set up as per and administer the ASIC Act 2001. ASIC carries most of its work according to the Corporation Act 2001. In the essay below with the help and reference of some case examples and subsections of Corporation Act 2001 I have discussed about the signs of insolvent company, what actions should

Australian Securities and Investment Commission (ASIC), an independent Commonwealth Government body, established under Australian Securities and Investments Commission Act 2001 (ASIC Act ) which sets out their powers and function. Their main purpose is to regulate financial services, corporate and markets with a majority of their work being under the Corporations Act 2001 (Corporations Act) and the National Consumer Credit Protection Act 2009 (National Credit Act). They have powers to protect consumers against deceptive or misleading and unconscionable conduct affecting all financial products and services including credit (ASIC 2015). Furthermore, they are empowered to investigate suspected breaches of the law, issue infringement notices and prohibit people from engaging in providing financial services or credit activities. Subsequently ASIC can seek civil penalties from the courts and commence prosecutions.

Managers can be encouraged to act in the stockholders' best interests through incentives, constraints, and punishments. These methods, however, are effective only if shareholders can observe all of the actions taken by managers. A moral hazard problem, whereby agents take unobserved actions in their own self-interests, originates because it is infeasible for shareholders to monitor all managerial actions. To reduce the moral hazard problem, stockholders must incur agency costs.

Through corporate governance, scandals, fraud, and criminal liability of the company can be prevented or avoided altogether. Since the people involved in the organization know what they are accountable for, the actions of one person doesn’t mean the downfall of the entire corporation. Corporate Governance identifying what the roles in the corporation so that it can allows decisions to be made that won’t have a negative effect on the overall corporation, and it means that the offender can be much more quickly identified and punished instead.

This report is based on the knowledge about company structure and its types grounded on Australian standards, the features which different organizations possess while functioning and the obligations implied on them in light of Australian standards. Secondly the major differences between large and small companies have also been discussed in this report, that what are those criteria which separate large companies from small? And the last part discusses the role which the organizations are playing in the progress of regulation of companies in Australia. The main purpose of these procedures is to bring uniformity in the regulatory system of Australian companies.

Economic science teaches us that due to their subjective needs, individuals have subjective preferences, and hence different interest. Occasionally different subjective interests give rise to conflicts of interest between contracting partners. These conflicts of interest may result in turn, in one or both parties undertaking actions that may be against the interest of the other contracting partner. The primary reason for the divergence of objectives between managers and shareholders has been attributed to separation of ownership (shareholders) and control (management) in corporations. As a consequence, agency problems

As explained by Schelker (2013), the agency problem between the owners and the management of a firm is at the heart of the corporate governance literature. Hence, there is a need for a