Ranking the Key Principles of Corporate Governance

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

In order to ensure effective regulation, the Sarbanes-Oxley legislation contains eleven sections that describe responsibilities of corporate boards (Engel, Hayes, & Wang, 2007). In case these responsibilities are not performed, criminal penalties are applied. The need for stricter financial governance laws created the global trend and such countries as Canada, Germany, France, Australia, Israel, Turkey and others also enacted the same type of regulations (Damianides, 2005). Today, the Sarbanes-Oxley legislation continues to play a fundamental role in the process of protecting the rights of investors and supporting a high level of investment attractiveness of the United States and companies that operate in the country. That is why this particular legislation can be considered as extremely benefiting for the national economy as well as investors.

Farrar, J. (2008). Corporate Governance: theories, principles and practice. 2nd ed. South Melbourne, Vic: Oxford University Press

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.

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 good corporate governance is regulated by the Australian Securities and Investment Commission (ASIC), which include specific director's duties that director must follow to enhance the well practice within the

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.

The ASX Corporate Governance Council defines the ‘corporate governance’ as the framework of rules, relationships, systems and processes within and by which authority is exercised and controlled within corporations (Corporate Governance Principles and Recommendations, 2014). The term “failure” of a corporate can be described as “Insolvency” in Australia (Michaela Rankin, 2012). And the reasons for corporate failure can be grouped into six categories: 1. Poor strategic decisions. 2. Greed and the desire for power. 3. Overexpansion and ill-judged acquisitions. 4. Dominant CEOs. 5. Failure of internal controls 6. Ineffective boards(Michaela Rankin, 2012).

This essay will discuss how to use corporate governance to prevent corporate failure. I will use the case of the failed Australian insurance company HIH to argue how to use ASX Corporate Governance Principles to prevent corporate failure. I will recommend to apply three ASX Corporate Governance Principles to change the HIH situations and finally choose the best course of action of the three.

This essay exposits the failure of Vocation Limited to draft how might a more appropriate application of the eight ASX Corporate Governance Principles (ASX, 2014, p. 4) have conceivably prevented the failure.

Breeden’s notion was that improving the board performance goes beyond having members with the right experience and background. He proposed that the CEO and chairman are independent of each other to encourage a separation of leadership and board independence. He defined having

Corporate governance refers to ‘the ways suppliers of finance to corporations assure themselves of getting return on their investment’ (Shleifer and Vishny, 1997: 736). Corporate governance discusses the set of systems, principles and processes by which a

This report sets out to review corporate governance at a private company, namely, Paramount Insurance Company. The specific objectives were to identify the relevant codes the organisation follows, why they are important and review the structure, process and

The Corporate Governance refers to the mechanisms, rules and regulations in which companies and governing bodies are put into task on various occurrences under their performance. It can be said to be a guideline which directs how companies achieve their objectives and more so how these objectives are set. In this case, abiding to the ASX corporate Governance Council has its merits and limitations at the same time. By abiding to the principle of laying solid foundations for the oversight and management, the merits in this case is the separation and clear allocation of duties to both junior staff and directors or seniors (Swan, 2014). By this there will be minimal conflicts and misunderstanding in execution of the duties by different players. However, by disclosing the process and manner in which the senior executives are evaluated, this can lead to the compromise of the whole process since the senior executives based on their vast knowledge may influence the outcome skewing the results to be positive.

The OECD Principles of Corporate Governance states that: "Corporate governance involves a set of relationships between a company’s management, its board, its shareholders and other stakeholders. Corporate governance also provides the structure through which the objectives of the company are