Table of Contents
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 and instances, and well carried out by National Australia Bank
With corporations close down in financial crisis, the problem of corporate governance has been concerned again. Bad corporation governance and poor business ethics can take many problems to a company, such as internal corruption, cheating investors and weak risk management. This report will address three questions about corporate governance. Firstly, this report will explain the definition of corporate and its relationship to business ethics. Secondly, it will examine three Australian Securities Exchange (ASX) principles with ethics and recommendations of corporate governance. Finally, it will evaluate corporate governance statement of National Australia Bank (NAB) , which is a financial company, and assess the efficiency that associate with ethics in ASX principles. 2. Corporate governance and business ethics
Corporate governance is a way that a company is ordered, managed and controlled. It influences companies in how to set and achieve goals, how to monitor and assess risks, how to optimize performances (ACCA and KPMG2009, p.2).The aim of corporate governance is to balance the interests among corporation board, its management and share holders (Bonn&Fisher2005, p.2). Further the understanding of corporate governance can be explained in two ways. It relates to company behavioral patterns: that is the practical behavior of corporations, such as honest behavior, protect stakeholders interests. Corporate governance also concerns itself with standard framework: that is, the principles under which companies are operating, such as corporation’s code of conduct, ASX principles (Claessens2003, p.2). Corporate governance and business ethics are in a mutually supporting way to promote each other. Business ethics is a guide, foundation and purpose of corporate governance. Corporate governance requires company to corporate under the rules to achieve business ethics(Rossouw2005, p6). Good corporate governance is very important for a company. It can protect shareholders interests that avoid agents violate owners interest and major shareholders violate minority shareholders interest. Efficient corporate governance can also strengthen the board function and improve the company’s public image.
3. Examination and explanation of ASX Corporate Governance Council’s principles and recommendations. The ASX Corporate Governance Council was set up in August 2002 and it was made up of 21 business, investment and shareholders groups. The Council’s multitudinous range of interests makes its principles more objective. This council’s mission is to ensure its principles to be an effective guide for public company.
3.1 Principle 3—Decision making with morality and responsibility Corporations should set up a standard of behavior rules and publish these rules or a summary of these rules as to make ethical and responsible decisions. Because the establishment of modern company system leads to the separation of enterprise’s management and ownership, so to make an ethical and responsible decision is very important for stakeholders(Yu2010, p1). The moral and responsible decision should preserve the company cohesion, consider...
References: a) ASX Corporate Governance Council, 2010,’Corporate Governance Principles and Recommendations with 2010 Amendments’.
f) ACCA & KPMG, 2009, ‘Corporate Governance’, ACCA UK Press
g) Stin,2003, ‘Corporate Governance and Development’, Global Corporate Governance Forum
Please join StudyMode to read the full document