Prepare a memorandum to the board of directors of HMI outlining and supporting your recommended course of action for addressing the issues at the Mines 1 and 2. The memo should include the following:
a) Identify the corporate governance issues at HMI's mines.
* The issue: On one hand, the diverting power into provincial electrical grid has resulted in an overlook for its own operations. On the other hand, a significant portion of these earnings is going into executive bonus pool for distribution to senior management. * This has demonstrated the company’s management has been corrupt in some respects, especially the earning should be used to solve the company’s own operation problem. * The company is lack of social responsibility in a way which the management has paid insufficient amount of money to address the environmental damage. Additionally, the company has bribed the political figure in order to bury the truth.
b) What measures are required to eliminate the shortcomings you have identified in (a)? Ensure you specify the requisite corporate governance requirements that must be adhered to.
According to the 8 principles of ASX. The company should make a few improvements to rectify the misconducts. These recommended measures are as below: * Promote ethical and responsible decision making
Companies should promote ethical and responsible decision-making. * Safeguard integrity in financial reporting.
Companies should have a structure to independently verify and safeguard the integrity of their financial reporting. * Make timely and balance disclosure
Companies should promote timely and balanced disclosure of all material matters concerning the company * Companies should establish a sound system of risk oversight and management and internal control.
c) Suggest ways to monitor compliance with corporate governance requirements. * Establish sound, transparent and compulsory reporting system. Stringent transparency in all...