corporate governance

1590 Words7 Pages
Table of Contents

Executive Summary:
Corporate governance is an essential part of modern company operations and management , it relates to business ethics, code of conduct and system to manage a company. However, there are many corporate scandals due to the failure of corporate governance. This report analyzes the corporate governance from multiple aspects. It is through the understanding the relationship between corporate governance and business ethics, evaluating the ASX principles as a guidelines to corporate governance and analyzing the National Australia Bank’s corporate governance. ASX principles referring to problems such as business ethics, code of conduct, diversity and risk management are explained with analyzing
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The ASX gives some detailed suggestions for the rules, such as board and senior executives should make a commitment to the code of conduct, and explain how the company copes with practical and possible conflict of interest. These suggestions allow corporation executives know more detailed information about how to make a promote ethical and responsible decision(ASX2010, pp22-25).
3.2 Principle 4—Oversight corporation operation with an audit committee
Corporations should set up an effective audit committee to oversight the company operation. If company lack of an effective governance mechanism will lead to manager’s corruption. There is a conflict interests and a lack of surveillance of management by the audit committee contributed to the Enron collapse in 2001(Li,2010,p37). ASX gives some recommendations about how to make up an effective audit committee. An effective audit committee should be constituted all of non-executive directors ,a majority of them are independent directors, and there are at least there members. These ways can effectively improve the quality of financial report, establish an honest atmosphere, and improve the confidence of public to financial report’s truth and objectivity. An effective audit committee also should have a formal charter to more competently perform the audit committee’s duties(ASX,2010,pp26-28). These recommendations make corporate governance under oversight to take a more ethical operation.
3.3 Principle 7—Risk
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