The corporate governance refers to the process by which corporation is directed and controlled. The corporate governance balances the interest of shareholders, clients, dealers, management of the company, investors, government and various communities (Bainbridge and Henderson, 2018). It also includes the process which helps to achieve pre-determined objects of the corporation. The board of directors (BOD) of company are liable for the corporate governance. It is a duty of shareholders to make an appointment of auditors and the directors. The shareholders of the company are required to ensure the good corporate structure in the workplace of the corporation. The corporate governance is about the performance of the functions or actions of the board of directors (BOD) and values of the company set by them. In the following parts, the corporate governance of an Australian company Wesfarmers is discussed and critically examined (Bottomley, Hall and Spender, 2017).
The corporate governance of the Wesfarmers limited is examined in the following parts-
In Australia, Wesfarmers limited is one of the leading organisations. The headquarters of Wesfarmers limited are situated in the Perth, Western Australia. In 1914, the Westralian Farmers Cooperative limited was formed as Cooperative Corporation by the Farmers and Settler’s Association of Western Australia. Later, in 1984 it was formed as Wesfarmers limited and listed in the Australian Securities Exchange as a public company. Now it has many hotels, supermarkets, coal mining, gas processing, chemicals, energy distribution, stores, home care stores, office supplies and the departmental stores. The Wesfarmers limited is one of the biggest organisations which has more than 210,000 employees and approx 500,000 shareholders (Campbell, 2017).
The main objective of the company is to provide appropriate return to the shareholders of the company. The purpose of the company is to satisfy the customers and make them happy by fulfilling their requirements by providing the goods and services at reasonable price. The company gives protection to the shareholders and provides them opportunity for the future growth and the success. The founders of the company emphasis on the good corporate governance of the company. The annual report of the Wesfarmers limited indicates that the board of directors (BOD) are reliable for giving the adequate gain to the shareholders and ensures the roles and responsibilities in making good corporate governance of the company (Clarke, 2017).
The company has key corporate governance documents such as corporate governance statement 2017, Appendix 4G and Wesfarmers constitution. The corporate governance statement of the company describes the role and responsibilities of the board of directors (BOD). The Appendix 4G defines the key disclosure of the corporate governance council principles and recommendations. The entity is required to lodge Appendix 4G at the same time when it lodges the annual report of company. The Wesfarmers constitution defines the whole company.
Wesfarmers limited compiles with law, rules and regulations of the country in which it operates its business, performs functions in the ethical way and follows the principle of honesty, principle of integrity, principle of respect and the principle of fairness. There are some improper conducts like bribery. It considers serious offence for the company as well as an individual. It is not consistent with value of Wesfarmers limited (Corkery and Taylor, 2018). Following are the purpose of the policy of Wesfarmers limited-
This policy is applicable to the all Wesfarmers group such as the directors and the employees of the Wesfarmers group companies. It cannot be amend without the previous permission of the Wesfarmers board. The operations of Wesfarmers extend to the countries outside Australia because of the diversified nature of operations of Wesfarmers limited. This policy makes sure that the inconsistency of anti-bribery policies of different divisions or units of the Wesfarmers limited (Davis, 2018). There are various requirements which are required to be fulfilled by the employees of the company such as-
For the better implementation of the policies, there are following responsibilities of the division or unit of the Wesfarmers limited-
The main focus of the company is to ensure strong capability to manage, execution and the day to day operational functions. The company makes focus on the environment’s protection. It provides the safe environment for the workers, gives reward to the employees for the better performance and gives the opportunity for the future growth of the employees of the company. It contributes towards the growth and wealth of the nation to take the chances of the business expansion (Francis, 2018).
The Wesfarmers limited continues to make focus on the rights of individual and ethical sourcing, mainly in respect of the supply chain transparency. It also continues to focus on the climate change flexibility. The company makes effort to reduce its footprint. The Wesfarmers limited delivers the problem’s solution to help the customers. The report of the Wesfarmers specifies the broad range of the customers, clients, workers, dealers, financers and the governments. It defines the roles and responsibilities of the workers, financers, dealers, investors and the government (Guo, 2018).
The Wesfarmers limited plays the most important role in supporting the United Nations Sustainable Development Goals (SDGs). SDGs identify the role of business to achieve targets of the company. The agenda of United Nation Sustainable Development Goals (SDGs) represents the necessity to finish poverty, fight inequality and the unfairness.
The divisions and business units of the Wesfarmers have the different culture. These business units and division run their own separate business. The core values of the company help to drive all the business in the different culture (Hussain, Rigoni and Orji, 2018). These four core values are the following-
Required key areas of skill-
The formation of Wesfarmers was demanded by the rural workers union so that they can get better pay scale and less office hours. Later, it was formed as the Wesfarmers limited in 1984 (Kilroy and Schneider, 2017).
In 2008, Wesfarmers limited issued US senior notes at the first time by raising US$ 650 million. It led a renounceable right issue by raising $2.5 billion (Plessis, Hargovan and Bagaric, 2018).
In December 2011, the board of Wesfarmers limited permitted the extension the production limit of ammonium nitrate $550 million in Kwinana and the Western Australia (Miller and Jentz, 2017).
In August 2014, Wesfarmers limited declared the purchase of work wear group of the pacific brands for $180 million. It includes Kinggee, Stubbies and the Hardyakka brands. This purchase of work wear group of pacific brand was finalised in December, 2014 (Shailor, 2018).
After the acquisition of the pacific brand’s work wear group, in June 2015 Wesfarmers limited declared the purchase of the gas producer and processor quadrant energy holdings for US$ 100 million. In August 2015, Wesfarmers declared an organisational restructure to make group of its three industrial businesses such as chemicals, energy and fertilisers; resources (WesCFF) and Industrial and safety (WIS) in only one new business division (Lydon, 2017) .
In January 2016, Wesfarmers declared the purchase of home improvement and garden retailer home base of home retail group in UK for 340 million. This acquisition of home improvement and garden retailer home base was finalised in the February 2016. In February 2016, new division for department stores Kmart and Target has been established by the Wesfarmers. This new division will assist Kmart and Target to get opportunities of keeping and developing these iconic Australian brands (ASIC, 2017).
In February 2017, the Wesfarmers limited opens a new home improvement and garden store having 30000 products. Bunnings group takes renowned fund raising Sausage sizzle in the United Kingdoms. In June, Wesfarmers limited opens four pilot stores which generate 120 new jobs. The England rugby union legend kyran bracken joins the celebration of opening ceremony. Bunnings which is famous Australian retailer of the home improvement and outdoor living products purchased home base for £340 million in February 2016 (Kotler, Burton and Deans, 2015).
The organisation of Wesfarmers group makes plan to invest £500 million in Bunning warehouse in United Kingdoms and Ireland in three to five years. Now Wesfarmers limited has many hotels, supermarkets, coal mining, gas processing, chemicals, energy distribution, stores, home care stores, office supplies and departmental stores (Kingsbury, 2018).
The material issues describe important social and environmental impact. They affect the assessment and decisions of the shareholder (Aras and Aluchna, 2018). The Wesfarmers limited draws an attention towards following material issues-
The Wesfarmers limited inherited in the business of the gambling at the time of the acquisition of the Coles in 2007. The Queensland also purchased to have competition with the Woolworth in respect of the business of liquor. The Wesfarmers limited enters into the pokies because Queensland directs to have own hotel mandatory to retail the liquor. The issue of the pokies is required to reform (Wang, 2017).
Conclusion
As per the above analysis it is clear that the Wesfarmers group operate their business as per the law, rules and the regulations. For Wesfarmers limited, honesty, fairness and the integrity are major parts to operate the business in the various business division and the business units. There are some practices which are the inconsistent with the core values of the company such as the corruption and the bribery. The Wesfarmers limited has made a strict policy which does not permit the personnel or the management to enter into the corruption and take, give or accept the bribe. The Wesfarmers limited sets the internal and the external goals in respect of the major issues. The important issues of the Wesfarmers limited are handled at the divisional level of company. It is seen by the company’s board (Wesfarmers board) and the divisional board as per the regular reporting.
References
Aras, G., and Aluchna, M. (2018) Women on corporate board: An international perspective. Melbourne: Pearson Education Australia Pty Ltd.
ASIC. (2017) Corporate Governance. [online] Available from: https://asic.gov.au/regulatory-resources/corporate-governance [Accessed 28/05/2018].
Babb, J. (2017) Rural life: Sandalwood a balm for forgotten farmers. Journal of news weekly, 15(3), pp. 31-38.
Bainbridge, S. M., and Henderson, M. T. (2018) Outsourcing the board: how board service providers can improve corporate governance. Cambridge: The Cambridge University press.
Bottomley, S., Hall, K., and Spender, P. (2017) Contemporary Australian corporate law. Cambridge: The Cambridge University press.
Campbell, J. (2017) Insight from the company monitor: Wesfarmers. Journal of equity, 31(8), pp. 16-25.
Clarke, T. (2017) International corporate governance: A comparative Approach. Australia. The Australia press.
Corkery, J. F., and Taylor, M. E. (2018) Gender balance in Australian boardrooms. Sydney: Bloomsbury Publishing.
Davis, N. (2018) the future relationship between technology and inequality. Insights on inequality, 110 (55), pp. 132-152.
Farrar, J. H. (2017) Corporate governance in Australia. Oxford: Oxford university press.
Francis, R. D. (2018) Ethics and corporate governance. Sydney: University of New South Wales.
Guo, Q. (2018) Rhetoric in financial reporting: evaluation of ISA 720. Australia: The Australia University press.
Handley, K., Ross, A., and Wright, S. (2018) The same or different: how women have included in corporate leadership in Australia. Australia: The Australia University press.
Hussain, N., Rigoni, U., and Orji, R. P. (2018) Corporate governance and sustainability performance: analysis of triple bottom line performance. Journal of business ethics, 149(2), pp. 411-432.
Hussey, R., and Ong, A. (2017) Corporate financial reporting. Oxford: Routledge.
Kilroy, D., and Schneider, M. (2017) Valuing the current strategy. In customer value, shareholder wealth, community wellbeing, 25(5), pp. 109-141.
Kingsbury, D. (2018) Western Sahara: international justice and natural resources. Oxford: Routledge.
Kotler, P., Burton, S., and Deans, K. (2015) Wesfarmers: Strength through diversity. Melbourne: Pearson Education Australia Pty Ltd.
Lydon, J. (2017) Anti-slavery in Australia. History compass, 15(5), pp. 17-26.
Miller, R., and Jentz, G. (2017) Business Law Today: The Essentials. Cambridge: The Cambridge University press.
Plessis, J. J., Hargovan, A., and Bagaric, M. (2018) Principles of contemporary corporate governance. Cambridge: The Cambridge University press.
Shailor, G. (2018) Introduction to Corporate Governance in Australia. Melbourne: Pearson Education Australia Pty Ltd.
Sullivan, R., and Goulson, A. (2017) the governance of corporate responses to climate changes. Business strategy and the environment, 26(4), pp. 413-425.
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