Describe about the Corporate Governance for Online Business Sustainability.
Corporate governance is signifying the effective process of controlling and conducting the business. While conducting the business, each of the organisations requires maintaining several codes and practices, which are necessary to be understood by the corporate personnel. The efficient board of members need to maintain the set of responsibilities that will be effective enough in guiding the organisation towards success. The better guidance provided by the efficient board members will even ensure the accomplishments of the pre-determined goals. The study will thus be discussing the corporate governance procedure of Leighton Holding, which is one of the leading construction businesses (Baker, 2013). The study will analyse the contribution of the board members in resolving the issues related to the corporate governance procedure. The structured methodology will also be applied to complete the study.
The study is based on the corporate governance procedure in Leighton Holding. The study requires identifying the potential issues during the year of 2013. In order to recognise such issues, it is required to conduct both the primary and the secondary researches. The secondary research will be based on the information derived from the secondary sources. For example, the annual report of the company and the list of board members during that period. On the other hand, the primary research will be considering qualitative analysis of the obtained data. In such cases, the company needed to communicate with one or two of the board members to confirm the issues. It is also required to understand the major initiatives that the board members had to undertake to resolve such issues. Hence, the association of the primary and the secondary researchers will be appropriate to conduct this study. Depending on such methodological structure, the entire study will be conducted accordingly.
Stanley Leighton founded Leighton holdings in the year of 1949 and the company has captured the leading positing as the superior contractors. In the year of 1962, the company was enlisted the name under the list of Australian Security Exchange. The company deals with the mineral process, mining equipment, construction process, infrastructure, and engineering services (Investor-And-Media-Centre, 2016). Headquarter of Leighton Holdings is situated at Sydney. However, it is to be notified that the company has the branches in different countries like Middle East, Asia Pacific, Sub Saharan Africa, North and South America. It is also noted that almost 43,000 employees are associated with the company all across the globe. In the year of 2015, the company had to face many allegations against corruptive acts, due to which Leighton Holden transformed the name into CIMIC Group.
It is notified that the company has established the partnership business with several entities like Thiess, CPB Contractor, Pacific Partnerships, and Leighton Asia. Having combined with these corporations, Leighton Holden started to provide many facilities like leaderships, finances and structured corporate governance. It is important to mention that the major motto of this organisation is to establish the sustainable approaches for the investment returns to the potential shareholders (Corporate Governance, 2016). In order to meet such objectives, the company has focused on implementing development, accountability, distribution, and morality in a specific way. Determining the motto of carrying out the global projects with the internationalised companies, M. Fernandez, the CEO of the company initiated the functionalities of associating the previous larger enterprises.
Most of the operational process of Leighton Holding is associated with the construction business, as CPB contractors are the major business of CIMIC Group. It has already mentioned that due to several allegations regarding the corruptive activities, the organisation had to change the name. The merged companies have ensured almost 100% stake in John Holland, which is another most renowned construction company in Australia. Apart from these companies, Leighton Holden associated with Thiess group, which eventually made the company to capture the leading brand position in the construction business. Headquarter of this larger entity then shifted to Hong Kong, which was the major hub of this business. Another partner company named Sedgman deals with the world class designs, operational activities, mineral process, and construction business (Giov, 2015). It is reported that the merged companies started conducting the business by working on almost 170 projects altogether. After associating with Ventia, another construction company, Leighton Holding started providing the construction services across the globe.
Issue 1: In the year of 2013, Leighton Holding faced the challenging allegations against the corruptive acts performed by the company. It was stated that the international construction business is associated with the discrepancies with the internal company files (Kopnina & Blewitt, 2014). In fact, it was proclaimed that Daivid Stewart, the CEO of Wall King was also associated with such corruptions. When the consequences revealed, it caused the real embarrassment for Australia and questioned the corporate governing bodies. Whereas on one hand, Australian businesses have been establishing partnerships with other countries, it is even connected to several corporate misconducts on the other side. The investigation process was imposed on hundreds of companies. The confidential documents were nurtured and revealed many of the cases. It was the worst scenario of a management discrepancy. It has been seen that most of the Australian firms fell under such allegations due to such situations. Leighton Holding has captured the largest position among the construction companies in Australia ensuring the market value of near about $7 million (Home – CIMIC Group, 2016). However, such allegations and the issues created the negative impacts on the organisational sustainability. However, the skilled efforts of the board members were really appreciable to mitigate such risks.
Issue 2: Another most prominent issue was found due to the inaccurate media releases in the year of 2013. The company tried to engage the stakeholders and the internal employees for better management functionalities (Wiggins, 2015). The management wanted to involve the employees for the better performance attributes that can ensure the quality work. However, the irrelevant media releases against Leighton Holdings somewhat affected the organisational reputation. However, David Stewart, the CEO managed the situation in a significant way.
David Stewart was the Chief Executive Officer during the period when the crisis emerged. Apart from him, Adele Ferguson, Tony Abbot, and Malcolm Maiden were also associated with the board in 2013 (Directors-resumes.2016). The chairman, Bob Humphris also reacted during this situational occurrence.
In order to maintain the business sustainability for the future run, the company believes in undertaking the efficient corporate governance procedure. Along with such initiatives, the company is even focusing on compliance and risk management practices, which are helpful enough in dealing with situational crisis (Our Leaders, 2016). In order to maintain the good governing practices, the regulatory bodies are aligned to prepare the auditing and financial report. The set of rules under the corporate codes are maintained to support the organisational functionalities. If any of the directors is absent during the time when the decision is needed to be undertaken, R L Seidler plays the role of the alternate director. On the other hand, it is seen that L S Griffiths is appointed as company secretary who deals with the administrative purposes. Apart from them, the skilled leadership team is also contributing much to the organisational success. The members are A Muriel, J Grogan, M Fernandez, L S Griffiths, A Valderas, and L Interligi. It is important to mention that the effective corporate governance procedure is determining the process of reviewing the imposed policies that depends on the legal structure and discloses the revenues. It is one of the major sources of stating the income statement in the annual report. The company maintains the proper ASX standards to prepare the annual report (Good Governance Guide, 2014). The maintenance of the positivity while dealing with the government is one of the significant traits of the company. CIMIC group has focused on building the efficient relationships with the stakeholders, as they are the major priorities.
Conclusion
The study discussed the corporate governance issues occurred during 2013 when Leighton Holding faced the allegations against the corruptive activities. Maintaining the effective level of the corporate governance procedure requires the concentration on the legal structure that is set to meet the organisational objectives. Therefore, it has been seen that the management and the board members together facilitate the entire organisational functionalities in a significant way. However, the association of the guidelines presented by CEO and the time management determines the organisational success more specifically. CIMIC group has focused on building the efficient relationships with the stakeholders, as they are the major priorities. Maintaining the effective level of the corporate governance procedure requires the concentration on the legal structure that is set to meet the organisational objectives. Therefore, it has been seen that the management and the board members together facilitate the entire organisational functionalities in a significant way. However, the association of the guidelines presented by CEO and the time management determines the organisational success more specifically.
References
Baker, N. (2013). Leighton Holdings directors blamed over graft. The Sydney Morning Herald. Retrieved 27 September 2016, from https://www.smh.com.au/business/leighton-holdings-directors-blamed-over-graft-20131003-2uxjq.html
Corporate Governance, 2016. Online. Retrieved from https://www.cimic.com.au/our-approach/corporate-governance Accessed on 17 September 2016
Directors-resumes.2016. Online. Retrieved from https://www.cimic.com.au/our-approach/directors-resumes Accessed on 17 September 2016
Giov, F.2015. Auditing Essentials. Research & Education Assoc., 2015
Good Governance Guide, 2014. Online. Retrieved from: https://www.governanceinstitute.com.au/media/651535/ggg_issues_consider-audit_risk_committees.pdf Accessed on 17 September 2016
Home – CIMIC Group. (2016). Cimic.com.au. Retrieved 27 September 2016, from https://www.cimic.com.au/
Investor-And-Media-Centre, 2016. Online. Retrieved from: https://www.cimic.com.au/investor-and-media-centreAccessed on 17 September 2016
Kopnina, H. & Blewitt, J.2014. Sustainable Business: Key Issues: Issues in Environment and Sustainability. Routledge
Our Leaders, 2016. Online. Retrieved from: https://www.cimic.com.au/our-approach/people-and-careers/our-leaders Accessed on 17 September 2016
Wiggins, J. (2015). Leighton to change name to CIMIC in wake of corruption allegations. The Sydney Morning Herald. Retrieved 27 September 2016, from https://www.smh.com.au/business/leighton-to-change-name-to-cimic-in-wake-of-corruption-allegations-20150320-1m40j3.html
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