The Case Of The Failed Australian Insurance Company

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 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

Corporate Failure is a situation when a company suffers from a huge mistake about a

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.

The article is written to help readers gain a solid understanding the roles of corporate governance, both inside and outside the company. Its goal is simply to impart information, not make claims or arguments on its own. I will be judging it mainly on the sources gathered, numerous examples and explanations given and the overall effectiveness it possesses in effectively communicating its ideas.

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.

In my opinion corporate governance fails because of bad decisions made by the CEO’s, Board of Directors, Shareholders, and Top Management. “One of the many problems that defenders of America's free market system fail to address is the severe dysfunction at the top of the nation's big public companies. Cases in point include some of the biggest bankruptcies of the last decade: Lehman Brothers, General Motors, WorldCom, Enron and many more” (Cohan, 2009). Our text states that “good corporate governance means better strategic management” (Wheelen&Hunger, 2012 pg. 63) which means that corporate governance fails because of poor strategic management. “The systemic failure of corporate governance

The first section of this essay focuses on the possible causes of corporate failures including dominant CEO, poor strategy decision and the failure of internal control. Secondly, it discusses how the third edition of corporate governance principles and recommendations could be applied to prevent the causes of the failure. The 1st, 2nd, and 7th principles along with specific recommendations will be mentioned in this section. However, the context is concerned solely with the causes stemming from Dick Smith itself.

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).

The world has witnessed a series of corporate bankruptcies in the recent decades like Enron, Lehman Brothers Inc, Global Crossings, and Tyco in the USA; HIH in Australia, Parmalat in Italy, APP in Asia, and Islamic bank Ltd. of South Africa. These collapses have weakened and shaken the confidence of shareholders, debtors, governmental institutions, and other similar relevant stakeholders in corporate governance (CG) and the stock markets, and led to regulating many reforms and codes of best governance practices all over the world, to strengthen transparency and restore confidence in financial markets (Barros et al., 2013). For instance, after the financial failure of Enron and dissolution of Arthur Anderson; one of the five largest audit and accountancy partnerships in the world, U.S enacted the Sarbanes-Oxley act of 2002; France regulated the financial security law of 2003, as many other countries developed a set of regulations in the aftermath of huge corporate scandals. In Addition, the integration and globalization of financial markets also has given significance and highlighted the importance of CG as claimed by Srinivasan & Srinivasan (2011).

Corporate failure is referred to insolvency in Australia, which means the inability to meet the due debt obligations, resulting in business suspension (Michaela, Patricia, Susan, Kimberly, & Matthew, 2012, p. 365). Corporate governance denotes to the system by which corporations are directed and controlled (Michaela et al., 2012, p. 188). Moreover, Hamilton and Micklethwait (2006, p. 1) postulates that the six causes of corporate failure are the most representative with irrespective of sector or geography. Therefore, by applying the six main causes (Hamilton & Micklethwait, 2006, p. 1) and the eight principles (ASX, 2014, p. 4), the scope of the essay is limited to the company prospective without consideration of external issues. Additionally, this essay accesses only the public available information of Vocation.

It is against our common sense that when a company has ability to expending and earning an increasing revenue and customers, it died. But from the perspective of corporate governance, the failure of the company is written. One.Tel’s governance performance in a very low level. One apparently evidence is that One.Tel’s audit,

A good Corporate Governance is integral to the very existence of a company and strengthens investor 's confidence by ensuring company 's commitment to higher growth and profits. Broadly, it seeks to achieve the following objectives:

A series of corporate collapses over the last two decades has generated consider-able debate and a strengthening of corporate governance requirements. But throughout the belief has