Jb Hi-Fi's Corporate Governance Structure

1213 WordsJun 10, 20125 Pages
JB Hi-Fi 's corporate governance structure Effective corporate governance structures encourage companies to create value, through entrepreneurialism, innovation, development and exploration, and provide accountability and control systems commensurate with the risks involved. Electronics retailer JB Hi-Fi, as a publicly listed firm, sees affective corporate governance as critical factor to achieving corporate goals and increasing the company 's value. JB Hi-Fi 's corporate governance structure separates management and supervisory functions into two distinct bodies: The Board of Directors and The Audit and Risk Management committee. The board carries out the duties in regard to the interest of the companies’ shareholders, staff,…show more content…
Lack of such disclosures may damage shareholder 's rights and interests. 3) Suggestions to the management of JB Hi-Fi Based on the above problems of JB Hi-Fi, the company should make some adjustments to the board composition. In many situations, non-executive directors serves mainly the managers to increase their power. People that sit on a board do necessarilyhave some kind of personal or professional ties, since they are part of the same rather small social group, the business elite. Hence, the challenge is hence to create organisational structures that allow an efficient control despite these social ties. The only solution to solve the problem is transparency, for example, each director has to openly declare his or her ties. However this is not legally enforced or controlled, it depends entirely on the integrity and business ethics of the director. Despite of that, the efficiency of control mechanisms can still be enhanced by the existence of a self-imposed “ethical code” among the business elite, and a social control among these elite guaranteeing the observation of this code. As a result, JB Hi-Fi should fully acknowledge the need for directors and executives to observe the highest ethical standards of corporate behaviour and assist them in applying the Code of Conduct in

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