Business Corporate Governance Recommendations

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Business Corporate Governance Recommendations

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Business Corporate Governance Recommendations

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Question:
Discuss about the Business Corporate Governance Recommendations.

Answer:
Introduction:
The Board of Ardent has alleged for the fatal accident and subsequent crisis. After the tragic accident at Dreamworld a number of patrons are death on one of the rides which criticized the operator and owner Ardent Leisure Ltd[1]. People have arises several question regarding the safety management of the company. They have failed to recognize and manage the risks which have been arising from the incident[2].

The corporate governance processes the structures of the rules, relationships, systems and processes by a particular authority for controlling and monitoring the corporations. It also controls the mechanisms of the company which are held to control the governance. In the corporate governance the good corporation always cooperates with the promotional investor confidence which is one of the important parts to provide the ability on the ASX.
The principal 7 in Corporate Governance describes the reorganization and manages risk where companies should establish such rules and monitoring system of risk oversight and management and internal control. It has set several principals. It is the duty of the boards that they must care about the establishment, implementation and annual review of the risk management system for controlling and managing the risk factors. In the risk profile the Audit Committee always analysis the various business risks in the risk management policies[3].
When any risk or defects occur due to some internal control system then they board will be responsible for the issues[4]. The company will operate the unit control and investment appraisal for the financial controls and procedures of the capital expenditure for the annual budgets and appraisal, due diligence which are the basic requirements of the companies[5]. There are several kind of risks are available like credit risk, operational risk, liquidity risk, equity, cyber risk, fraud risks and security risks which are affecting the risk management system of the boards. Therefore the risk management committee control the risk management programs for the revaluate the management systems[6].

The quality and integrity of Personnel set an Ethical Standard Manuals for the operational purposes of the bard rules for controlling the risk managements. When they operate the risk in the business line management the board always compliance with the major business risks lines[7]. Therefore according to the management system of the Ardent Leisure Ltd, the duty of the board comes to a criticize issues where a major fatal accident occurs and a number of patrons are died due to the major accident[8]. Therefore several question has arises about the responsibilities of the company that how they manage the security system[9]. As per the principal 7 in Corporate Governance the risk management is able to supremacy whole safety issues in the business but the safety and securities of the employees also applicable under this principal[10]. It is the duty of the board members of Ardent Leisure Ltd that they will control every safety issues in the risk management and prevent the risks according to the ethics in the risk oversight and management and internal control[11].
According to the case study, the directors and the company are the part of the board therefore if the Board failed to manage the risks the company and directors both are breaches the Principles 7 of the ASX principles of Good Corporate Governance[12].
The Australian Securities Exchange (ASX) is one of the parts in the Corporate Governance where the Principal 7 describes the reorganization and manages risk where companies should establish such rules and monitoring system of risk oversight and management and internal control[13]. It addition is also possible to describe that the duties of the company are all depends on the Board of the company. The company and the directors all are related with each other and if any accident occurs due to the irresponsibility of the Board then it will state that the Board has breach the Principal 7 of the Corporate Governance[14]. The all kind of legal responsibilities are lie on the Board where they must conduct the business and every statutory responsibilities and companies financial statements. According to the Corporate Governance, the breach of any duties will make the penalties under the Corporate Act[15]. The Board must control and monitor the duties where the rules and constitution of the corporation also included. The takeover Panel Decision and Policies of the company are also related with the Principal 7 of the Corporate Governance[16].
Along with the duty of the Board of the Company the duty of the directors are also related in this part. Directors of the company individually also maintain their duty to look after every hazards and safety management of the company[17]. However, the board and the company along with the directors who are the member of the board have the same duty to monitoring the risk management as per the corporate governance[18]. The risks should be the material risks where the companies are bound to maintain the legal obligation along with the business and risk policies in the company[19]. If the company or Board or the Directors failed to manage the legal obligations then they will breach their duties and face the legal consequences[20]. As per the case study, it has been found that Ardent Leisure Ltd has failed to control and monitor the legal obligation along with the safety and risk managements[21]. Here, the Board, Company and the directors all are breaches their obligations which cause the damages. The risk management committee will have the obligation to looks for the damages and has the responsibilities to maintain the obstacles as per the Corporate Governance[22].

When anyone breach the duties then as per the Corporate Governance then according to the damages they are bound to pay the compensation to the parties who are affected for the breaches and risk issues. The Board will accommodate the whole issues with the board members along with the directors and the company[23]. They also review the entity of the risk management and process the safety management with the insurable risk association of the company[24].
The directors are the member of the board and shareholder of the company. They are bound to perform several duties under the corporate governance. They are willing to function according to their duties of care and diligence and must not breach the duties. Their negligence towards director’s duty never makes any financial harm to the company.
It is the general law of duty of care where the directors have general duties to take the reasonable care where they will look after every issues in the company which includes the financial stability, employment hazards, safety and securities of the employees and along the care of the company’s every issues[25]. The law of the duty of care never make any imposes w9ith the general obligation of the director to make it sure that the company never make any contravene with other acts or legislations. The directors also make it sure that the degree of skill required every objective measurements which are related to the issues of the director’s duty[26].
The statutory duty of care includes the degree of care ad diligence of a reasonable person who will perform the duty of the directors of the company. According to the constitution of the company the director never breaches the duties. If it breaches the duty toward the company then the director may face the legal obligations according to the rules of the corporate governance[27]. The civil penalty also applied for the breach of the director’s duty. When the director breach the duty of care there are some defenses are also available in the corporate governance rule[28]. The business judgment rule, reliance defense and delegation defense are the most common defenses can the directors may use when they are facing the allegation of breach the duty of care[29].
Here in this case Ardent Leisure Ltd has the an important issue where their company has faced a major tragedy of accident where several people has died which affect the reputation of the company and for that reason it establishes that the board has breach the duties. Therefore as being the member of the board and the shareholder of the company the director also owns the duty toward the company and protects the safety issues with the company[30].

If any company face any damages regarding the risk factors and if it has been proved that the director has breached the duty towards the company then the penalty provisions also apply for the directors also[31]. The breach of duty of care means the director’s activity represents negative outcomes for the company and damage the reputation of the duty[32]. According to this case, if it has been found that the directors are liable for the fatal accidents then the penalty provisions are also applicable for the directors[33]. The financial harm is one of the major issues in the risk management program. The directors are must not breach the duty of care and diligence towards the company as they are board members and equal shareholders of the company[34].
The Board of Ardent has alleged for the fatal accident and subsequent crisis. After the tragic accident at Dreamworld a number of patrons are death on one of the rides which criticized the operator and owner Ardent Leisure Ltd. People have arises several question regarding the safety management of the company. They have failed to recognize and manage the risks which have been arising from the incident[35].
Therefore there are several issues has been arises on the basis of the allegation toward the board members of the Ardent Leisure Ltd. The allegation of the people is that they are failed to manage the safety issues and monitoring the risk hazards[36]. In the corporate governance the good corporation always cooperates with the promotional investor confidence which is one of the important parts to provide the ability on the ASX. The principal 7 in Corporate Governance describes the reorganization and manages risk where companies should establish such rules and monitoring system of risk oversight and management and internal control[37].
Therefore according to the risk managements it is their duty to check the issues and overcome the risk through the risk management committee[38]. According to the case study, the directors and the company are the part of the board therefore if the Board failed to manage the risks the company and directors both are breaches the Principles 7 of the ASX principles of Good Corporate Governance[39]. It is the duty of the board that they will maintain and control every hazard in the corporation[40].

The directors are the member of the board and shareholder of the company. They are bound to perform several duties under the corporate governance. They are willing to function according to their duties of care and diligence and must not breach the duties. Their negligence towards director’s duty never makes any financial harm to the company[41]. When anyone breach the duties then as per the Corporate Governance then according to the damages they are bound to pay the compensation to the parties who are affected for the breaches and risk issues[42]. The Board will accommodate the whole issues with the board members along with the directors and the company[43]. They also review the entity of the risk management and process the safety management with the insurable risk association of the company. The board or a committee of the board should review the entity’s risk management framework at least annually to satisfy itself that it continues to be sound and disclose, in relation to each reporting period, whether such a review has taken place[44].

References
Ali, Searat. “Corporate governance and stock liquidity in Australia: A pitch.” Journal of Accounting and Management Information Systems 15.3 (2016): 624-631.
ArAs, GülEr. A handbook of corporate governance and social responsibility. CRC Press, 2016.
Beekes, Wendy, Philip Brown, and Qiyu Zhang. “Corporate governance and the informativeness of disclosures in Australia: a re?examination.” Accounting & Finance 55.4 (2015): 931-963.
Beekes, Wendy, Philip Brown, and Qiyu Zhang. “Corporate governance and the informativeness of disclosures in Australia: a re?examination.” Accounting & Finance 55.4 (2015): 931-963.
Bottomley, Stephen. “What is corporate law?.” Routledge Handbook of Corporate Law (2016): Ciro, Tony, and Christopher Symes. Corporations law: in principle. Thomson Reuters, 2013.49.
Cassidy, Julie. Corporations law: text and essential cases. Federation Press, 2008.
Christensen, Jacqueline, et al. “Do corporate governance recommendations improve the performance and accountability of small listed companies?.” Accounting & Finance 55.1 (2015): 133-164.
Davenport, Shayne, and David Parker. Business and law in Australia. Law book Co, 2012.
Fitzpatrick, Jeff, et al. Business and corporations law. LexisNexis Butterworths, 2011.
Graw, Stephen, et al. Understanding business law. 2016.
Jones, Greg, Claire Beattie, and Afzalur Rashid. “Editorial Special Issue on Corporate Governance.” Australasian Accounting, Business and Finance Journal 11.1 (2017): 1-2.
Larcker, David, and Brian Tayan. Corporate governance matters: A closer look at organizational choices and their consequences. Pearson Education, 2015.
Mann, Catherine Renshaw, et al. “From the dean.” (2016).
Schneider, Anselm, and Andreas Georg Scherer. “Corporate governance in a risk society.” Journal of Business Ethics 126.2 (2015): 309-323.
Tricker, RI Bob, and Robert Ian Tricker. Corporate governance: Principles, policies, and practices. Oxford University Press, USA, 2015.
Whiting, Rosalind H., and Georgia Y. Birch. “Corporate governance and intellectual capital disclosure.” Corporate Ownership and Control 13 (2016): 250-260.
Young, Suzanne, and Vijaya Thyil. “Corporate social responsibility and corporate governance: Role of context in international settings.” Journal of Business Ethics 122.1 (2014): 1-24.

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