Corporate Governance And Social Responsibility For Global Code Of Business Conduct

Stakeholder group of James Hardie

Discuss about the Corporate Governance And Social Responsibility for Global Code of Business Conduct.

1. In the case study, it is clearly shown that due to the asbestos issues, various medical conditions are originated. The Medical Research Compensation Foundation (MRCF), is continuously providing the assistance to the victims. As defined in the case study, it is clearly shown that the organization mainly believes in achieving the long term and short term targets. For this, they personally believe in the aspects related to the Corporate Governance (James hardie industries plc, 2014). The table is shown below mainly covers the different group of the stakeholders and the corporate governance responsibility hailed by the senior members.

Stakeholder group of James Hardie	Corporate Governance responsibility owned
The group of customers Save Time On Research and Writing Hire a Pro to Write You a 100% Plagiarism-Free Paper. Get My Paper	The MRCF is founded by the senior authorities or the senior members of the organization and from these funds, the restructuring of the products could be attained. By this, the customer’s loss related to the product can be fulfilled easily.
The group of employee	The board of directors and the senior management of the organization tried to provide the various corporate governance aspects (Plessis, et al., 2010). Managing risk, conducting the business ethics, continuous disclosure, and Insider trading is considered as the key facilities which are provided to the employees of the organization (Redmond, 2012).
The group of investors	Alike group of employees, the group of investors are also getting the advanced assistance from the senior management too. But, from the MCRF, the funds are also released to the investors for fulfilling their requirements appropriately. The suitable help to the investors as per the laws leads to guarantee in managing the risk and the other aspects are being solved by the senior management.
The group of Regulatory Framework	The regulatory framework also contributes in the major issues related to the organization. So, the suitable funds are also allotted from the MRCF to the regulatory framework. By this, the financial aspects of the regulatory structure may also be managed easily.

The broad range of corporate governance responsibility is facilitated to the different groups of the James Hardie. To regret the health lost due to the asbestos, the corporate governance is provided to the victims. It can be possible to provide the corporate governance to two groups. With the context of assistance, proper help will be provided to the group of employee and the group of investors. The risk management, the identification of the suitable ethics related to the organization and the other recovery aspects is clearly shown to both the employees and the investors. These groups are combined because both these groups possess the same responsibility.

2. The Australian Stock Exchange commonly known as the ASX is mainly helpful in defining the major aspects related to the organization. In the Asbestos case of the James Hardie, the principle associated with ASX  has played the most prominent role. To regulate the suitable processing and to manage the key corporate governance issues, it is essential for the organization to identify the right ASX principle with the appropriate recommendations. The table is shown below mainly define the ASX principle and with that, the key corporate governance issues are also identified. The ASX principles are explained by the corporate governance rules and the list has two sections.

ASX Principle	Key Corporate Governance Issue corresponding to the ASX principles
Section 303 A 06 – Possess all the listed committee that satisfies the requirement of the organization.	The corporate governance issue which is corresponding with the ASX principle are the issues related to the asbestos. According to this principle, to face the issues, all the requirements and the needs of the organization should be fulfilled in an appropriate manner.
Section 303A. 1.1 – Handling the major foreign issues related to the organizations	In contrast to the asbestos cases and the other aspects, the foreign issues can be solved on the wider level, which is considered as the key corporate governance issue (LongDog & Associates, 2011).
ASX Principles 1 and 2 – Useful in defining the suitable board of directors of the project.	Helpful in fulfilling the requirement of the board of directors of the organization. But, the key issue has developed in relation to their performance.
Section 303 A1.2 – The proper listing standards are defined through this.	The ASX principle will be helpful in changing the aspects related to the formation of the suitable listing. The relative listing standards are allotted to the organization, which are helpful in defining the suitable auditing change in the organization and related processes.

By identifying all these ASX Principles, it is quite clear that it will be helpful in solving the major issues related to the corporate governance. The organization already faces the issues due to the failure of the corporate social responsibility in the organization. So, to fulfill this aspect, the ASX principles are adopted, so that the suitable principles can be demonstrated along with key corporate governance issue corresponding to the ASX principles has been analyzed (Parker & Evans, 2013).

ASX Principle

If the company had not restructured its aspects offshore, than these ASX principles will be helpful in solving the key issues. The phase of restructuring is mainly propounded due to the health issues occurring in the organization, due to the asbestos. These issues don’t  only affect the employees belonging to the organization, but to the customers and the investors too. So, to manage the situation in all circumstances, it is essential to follow the suitable ASX principles.

3. The ASX principle is mainly explained in context of “Principles of Good Corporate Governance and the Best Practice Recommendations”. By following the ASX principles, it could become possible to deliver more independent boards’ for the better disclosure.  Though the organization followed the suitable ASX principle, but in an unethical manner. The higher authority of the organization unethically presents the fake copy of the ASX principles in front of the employees, to develop the consistency of the business. In the section defined above, the list of the ASX principle is described on the wide level, with that, the key corporate governance issues are also being defined simultaneously. To explain this section in a more elaborate manner, the table is shown below, which mainly defines the suitable actions taken by the company.

ASX Principles	Action company should have taken to comply with ASX guidelines
Principle to fulfill the need of the customers	The organization took various actions to fulfill the need of the customers on a wide level.  There are various findings which show that the James Hardie follows the appropriate rules and orders to entertain the customers, but simultaneously also creates the fake rule for the customers. So, the actions should be taken for the self-growth and development (ASX Group, 2016).
Principle to solve the Foreign issues	To manage the ASX Principle related to the foreign aspects, the suitable actions are related to the restructuring of the organization are taken into consideration. The organization planned to start the concept of JHNIV in the other country. By this action, the organization can also save itself from the asbestos criminal issues.
Principle related to the listing of the standards	For managing the specific standards, the organization try to manage all the policies and rules in correspond to the ASX Principles. The policies included in the fund raising are like AIFCL, MRCF and the JHIL.
ASX Principle related to the Board of Directors	The ASX principle related to the Board of directors is defined in an appropriate manner. To coordinate with the board of directors, the different actions are identified by the James Hardie. The actions which are taken against the board of directors misleads the communications, Failure to Disclose in relation, Misleading the executive presentations, Restructure of the group and failure of the appropriate care & diligence (Plessis, et al., 2010).

By following these principles appropriately and conducting the suitable action on that, the ASX principles can be determined easily. It is essential to manage the suitable action in reference to the ASX principle because without identifying the suitable ASX principle, it is not possible to manage the current scenario related to the organization.

4. According to the case study, it defines that in coordination with the James Hardie, the other funders and the associates are also connected. These associates are identified as the stakeholders who defines the appropriate groups of the James Hardies. The sudden change or the unethical behavior of the James Hardie exacerbated the different groups of the stakeholders in the different manner.

Stakeholders Group of James Hardie	How long term interests of the stakeholders were affected or exacerbated?
Group of Customers	The deals which are signed by the customers to sell them the suitable products is not fulfilled appropriately. There are various customers who were outsourcing the products from the James Hardie. For example, the major customers are Australia, New Zealand and the United States who are purchasing the products for the long-term process, but due to the asbestos issue, the global customers are not purchasing the products appropriately.
Group of employees	The employees are considered as the main victim who were facing the ill effects from the James Hardie. There are various employees, who dedicate their whole working life to the organization are it vain. In fact, some of the lower level employees also lost their life due to the major lung diseases (James Hardie Building Products Inc., 2016). The long term insurance of the employees, gratuity and the extra income earned by the employees were not provided to them. Rather, the organization was planning to shift them to somewhere else. With this decision of the organization, not only the employees were becoming jobless but with this, the future strategy was also getting disturbed.
Group of senior managers and the executives	The group of senior managers and the executives also plan some long term strategy to achieve the targets. But, the continuous blames on some of the senior authorities and the other team members destroy the morale of the other employees too and some of them also withdraw their duties from the organization. This long term effect has been faced by the group of senior managers and executives (Morningstar, Inc. , 2016).
Group of investors	There are various investors and the stakeholders who are actively participating in releasing the funds for the organization and simultaneously, also possess the suitable shares in the market. But, the fake ASX principle and the inappropriate allotment of the funds to the victims engaged the money of the various investors in an uneven manner (Wynne, 2005).

The above description clearly defines that the restructuring and reconstructing decisions of the organization, not only create the negative impact on the employees, customers and the investors but, by this, the existing image of the organization also gets spoiled.

5. The case study clearly defines that the Asbestos case was first established in the year 1939, but the organization doesn’t want to take the responsibility. James Hardie had continued the production, which was mainly the commercial decision. Asbestos is the material used in the industry for making the brake linings, fibro sheeting, pipes and the other materials. The side effects of the Asbestos not only creates the trouble for the employee, but has also affected the nearest environment as well. But, when the victims of Asbetos has been identified and the family of the victim lodges the complaint against the organization, the organization (i.e. James Hardie) took very important decisions.  They planned to switch the business and also want to change the location of the business (Parker & Evans, 2013). The decisions taken by the directors at that time were not considered as the appropriate decision legally.  At that time, rather than facing the current situations, the organization wanted to get rid-off from the current scenario. In the defined case study, it is also mentioned that the medical implications of the Asbestos sufferers were also revealed at the initial level but the organization ignored it a lot.

Actions company should have taken to comply with ASX guidelines

The decision which was made by the higher authorities was considered as unethical. The employees who were suffering from the Asbestos and lung diseases belonged to the organization only and to take care of those employees is considered as very important. But, rather than fulfilling the moral responsibilities, the organization looks forward to the strong financial aspects. With this, the organization also wants to expand the business in various other forms.  To explain the difference between the business ethics and the moral ethics the discussion is also defined (Shah, 2016).

The business ethics simply believes in making the maximum profit from the existing business, whereas according to the moral ethics, the security of the employees is considered as the major priority of the organization. To explain the difference, most appropriate examples are defined in the case study clearly. To follow the business ethics, the organization only expands the business rather than looking after the major issues occurred. In fact, the organization also planned to switch their current business and also change the name of the business which was James Hardie Industries NV (JHINV). But, the social pressure and the corporate responsibility of the company provide the suitable funds to the victims of the asbestos issues. When the organization was ready to provide the funds to the victim for the incidents that occur in 1960, then it was included in the category of the moral ethics (Commonwealth of Australia, 2004). It’s not considered as the wrong aspect to expand the business and to earn the maximum profit from it, but simultaneously to follow the moral ethics also matters a lot. To complete the moral ethics, the organization arranges the Injuries Compensation Fund Limited (ICFL) for solving the issues related to the asbestos victims in an appropriate manner. Other than this, there are various funding system which helps in solving the issues related to the organization and employees too.

6 As the case study indicates that due to the suspected and ignoring behavior, the organization has to face bad times. To manage the image in the international market and to cure the victims of the Asbestos case. The organization planned to adapt the suitable corporate social responsibility.

Specific Stakeholder’s Group	How did action threaten James Hardie Corporate Sustainability?
Customers	The customers are considered as the major source of increasing the sale of the product. After the Asbestos case of the James Hardie, the customers took legal actions on the organization and also lodge the case of the fraudulent against them (Tozer & Hamilton, 2005). This reduces the capacity of the organization to perform well and the corporate social responsibility is also not fulfilled appropriately.
Investors	The simple approach which is defined by the investors to threaten James Hardie is the withdrawing the investment from the existing projects of the James Hardies. While providing the funds to the Asbestos Victims, the funds are released from the investors only. The common funds are released from the Final Funding Agreement (FFA), Asbestos Injuries Compensation fund limited (AICFL) and MRCF (Cameron, 2001). All these funds are provided by the investors. If these funds aren’t provided at that time, the CSR of the organization may get threatened.
Employees	Personally, the employees also threatened the CSR of the James Hardie. The organization declared various misleading statements to the employees, so that they can continue with the organization. But, after considering the health issues, especially the problems related to the lungs, the employees of the organization withdraw their support due to which the CSR activities suffers a lot (Gries & Marsh, 2015).
Others	Threatening from the unions and the groups of people, who is legally trying to manage the rights of the Asbestos Victims were very common which hinder the corporate social responsibility of the organization. In fact, in the year 2004, the inappropriate behavior of the trade unions and the local councils leads to the Jackson inquiry (Hargovan, 2009).

By identifying all the aspects shown in the above table, it is quite clear that due to the worst impact of the asbestos on the employees, customers and the investors, they withdraw their support from the organization. Due to this, the organization faces the major issues related to the CSR activities. Other than this, there are also various legal actions taken on the organization which ruined the image of the organization.

ASX Group, 2016. ASX official website. [Online]

Available at: https://www.asx.com.au/

Cameron, P., 2001. James Hardie Industries Limited: Project Green Board Paper, l.: s.n.

Commonwealth of Australia, 2004. In the shadow of the corporate veil: James Hardie and asbestos compensation, l.: APAH.

Gries, L. & Marsh, M., 2015. Global Code of Business Conduct, l.: s.n.

Hargovan, A., 2009. Australian Securites & Investment Comission Mac’donald, l.: s.n.

James Hardie Building Products Inc., 2016. Our Company: About James Hardie Building Products. [Online]

Available at: https://www.jameshardie.com/About-Us/Our-Company

James hardie industries plc, 2014. Corporate Governance. [Online]

Available at: https://www.ir.jameshardie.com.au/jh/corporate_governance.jsp

LongDog & Associates, 2011. How Corporate Governance Failed in the James Hardie , l.: s.n.

Morningstar, Inc. , 2016. James Hardie Industries PLC ADR JHX. James Hardie Industries PLC ADR JHX .

Parker, C. & Evans, A., 2013. Inside Lawyers’ Ethics. l.:Cambridge University Press.

Plessis, J., Hargovan, A. & Bagaric, M., 2010. Principles of Contemporary Corporate Governance. l.:Cambridge University Press.

Redmond, P., 2012. Director’s Duties & Corporate Social Responsiviness. UNSW Law Journal, 35(1), pp. 317-340.

Shah, S., 2016. Principles of Corporate Governance. l.:Academia .

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Wynne, M., 2005. James Hardie and Health Care Corporation. James Hardie Health Investments.