The Board of Ardent has alleged for the fatal accident and subsequent crisis the company has met with a tragic accident at dream world where a number of patterns have died due to the failure of one ride and it is criticized against the operator and owner of Ardent Leisure Limited. Now several questions has been asked and identified about the safety management of the company because they have been failed to identify and control the risk which cause the accident in the dream world.
The corporate governance process establishes framework which includes rules, relationships systems and a method which is organized and monitoring by the particular Corporation. It is the duty of the government that process on the mechanisms which helps the company to establishes the elements of corporate governance. Therefore it should be proper and a good Corporation which always helps the promotional investor confidence and it is included on the ability of ASX.
According to the principal 7 in corporate governance provide the application of recognize and managing risk management. It will also help to control the roles and process of risk oversight and management and internal corner. The principle 7 defines where that liability and obligation of the board has implied on the establishment through the implementation of annual review of the risk management system.
In addition if any risk or defects has identified due to the failure of internal control system then the corporate governance will make liable the board authority of the company. Therefore it is the duty of the company that they will operate and monitor the unit control and investment appraisal which is related to the financial controls of the capital expenditure. The capital expenditure process on the annual budgets appraisal has the due diligences which are important sustainability requirements of the company. In the risk management system the risk is included with various kinds like liquidity risk, credit risk, cyber risk, operational risk, fraud risk and security risks who are directly make the effort on the authority of board members.
Therefore the quality and integrity of personal set and ethical standard manuals in the risk management process help to deal with the business risk lines and helps to control the management system. Therefore it can be stated that Ardent Leisure Limited is become liable for their affiliate risk management system and here only the principal 7 in corporate governance can help to control the safety issues which not only help to control the risk management but also provide proper securities to the employees of the company. Now the duties applicable for the Ardent Leisure limited who must apply the principle and ethics for controlling the safety management and prevent the race through the application of ethics in the risk oversight and management and internal control.
The directors are playing one of the important roles in the boards where in this case study it has been found that they are also liable for the failure of board. Therefore both the company and the directors have breaches the elements of principle 7 of the ASX principles of good corporate governance. The Australian securities exchange is included in the corporate governance which establishes the facts of principal 7 on the recognisation and managing risk in the risk oversight and management and internal control. The company has processed by the board and their members where directors are also part of them. If the directors can found liable for any accidents due to the responsibility of the board then this will be stated the facts of breach the terms of principal 7 of the corporate governance.
They hold the legal responsibilities which should define according to the conduct of the business and the statutory responsibilities of the financial statements according to the corporate governance. When the breach will be identifies and he fines and penalties also provided according to the Corporation Act. In that case the board should take over the duties according to the rules and conditions of the company. The takeover panel decision and policies are also important which are included in the principle 7 of the corporate governance according to the situation of the facts.
Under the liability of the directors they should look after the company and the Managing authority. When a business is formed the board of directors made the organization it is processed every business and risk policies where those are maintained by the corporate governance. Therefore when it will be found that the natural risks are involved with legal obligations then it affects the business and those policies of the company. If the board of the directors fails to manage such obligations and due to some consequences they breach the constitution of corporate governance.
Therefore according to the case study Ardent Leisure Limited is also failed to control the risk management system where the directors also involved and they must work according to the risk management. The board authority and the directors of this company have breached their duties and it also established the legal consequences for failure to control the safety management and cause several damages. Therefore now the risk management committee will continue on the duties where they must looks for the damages and control the risk management system according there Ethics of conduct.
If according to the corporate governance the directors breach with their duties then the ASX also take legal actions against them for violation of the rules of Corporate governments if it is proved that the directors are also involved in the failure of risk management then according to the corporate governments they need to pay the damages along with the board authority’s. The parties who got affected by the failure of risk management they should be compensate regarding the breach and risk issues. Therefore first the board will accommodate and review the issues where board and directors both are related with the failure of safety and risk management.
In Companies there are shareholders who buy the shares of the company out of the share they get the benefits. Directors are also the shareholder of the company along with the membership of the board authority. For being a director and along with the shareholder of the company they have several duties for the company. According to the corporate governance it also described that the director are bound to follow their duties of care and diligence which are the part of the code of conduct. Therefore they are bound to act according to the constitution of corporate governance where they must not breach their duties of care towards the company. It is also included that due to the negligence by the directors, the company must not face with any financial harm which affects the financial stability of the company.
According to the corporate governance the general law of Duty provides the duty of care by the directors who are bound to follow the reasonable care after every issues of risk management in the company. Therefore the directors should take the proper duty of care where financial stability and employment hazard securities and safety of the employees are included along with the proper care of the company. If it faces any issues regarding the risk management then the action will be taken. The duty of care never get impose with the general obligations where the company must not act or impose any contravene with other acts or legislations of share holders or the director of the company. It is also ensure that the degree of skill required needs a proper measurement for every objective of issue regarding the duty of the director. The statutory duty of duty of care defines the degree of care and diligence of an individual person who will act of the duty of the directors of the company.
Therefore the constitution of the company is formed according to the corporate governance where it’s never fail to apply the legislations for the issues where it breach the terms but in some cases if the constitution is failed to perform according to the rules and if it shows that the both company and the director has breach the duty when it will be treated according to the constitution of corporate governance. However if the directors has found with the guilty of the breach of duty of care then they can use defense as per the business judgment, rule, relation, defense and reliance difference.
Now as per the case study Ardent Leisure Limited has faced a tragic accident and there are several people has been affect with the reputation of the company along with the several people. However due to this accident the company has failed on their reputation and the director has been found to breach the duties. Not only for the board of the members but the other shareholders and the directors held equal rights of duties for the safety of the company.
According to the corporate governance if the company being liable for any damage or other risk factors and they found guilty due to the duty of care along with the director then they can be find with the penalty provisions. When a director breach the duty of care according to the Sec- 180-180(1) of Corporation Act (Cth) can outcomes the negative representation which directly affect and damage the reputation of the company where it also effect towards the business. Therefore it is important to prove the damages regarding the breach of duty of care and.
if it is proved that the director are liable for the issues then they are also comes under the penalty provisions. Sec- 1317(E) of the Corporation Act defines the penalties of the breach of duties where the financial penalties will be claimed from them. Financial risk is one of the risky issues in risk management because when any duty of the corporate governance has been breached then it will directly affect the company where they can face the financial risk which is one of the critical risk issues in the risk management program.
The board of Ardent has been arranged due to the major accident and subsequent prices because many people has died and due to the fatal accident the operator and owner Ardent Leisure Limited has critically criticized for failing according to their duties. Therefore there are several issues has been arises on the basis of the allegation toward the board members of the Ardent Leisure Ltd. The allegation of the people is that they are failed to manage the safety issues and monitoring the risk hazards.
In the corporate governance the good corporation always cooperates with the promotional investor confidence which is one of the important parts to provide the ability on the ASX. The principal 7 in Corporate Governance describes the reorganization and manages risk where companies should establish such rules and monitoring system of risk oversight and management and internal control. According to the case study, the directors and the company are the part of the board. Therefore if the Board failed to manage the risks the company and directors both are breaches the Principles 7 of the ASX principles of Good Corporate Governance.
It is the duty of the board that they will maintain and control every hazard in the corporation. The directors are the member of the board and shareholder of the company. They are bound to perform several duties under the corporate governance. They are willing to function according to their duties of care and diligence and must not breach the duties. Their negligence towards director’s duty never makes any financial harm to the company. When anyone breach the duties then as per the Corporate Governance then according to the damages they are bound to pay the compensation to the parties who are affected for the breaches and risk issues . The Board will accommodate the whole issues with the board members along with the directors and the company.
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