Question:
Explain the development, concepts, and significance of the concepts and practice of Corporate Governance.
The term corporate governance describes a well-structured framework of the rules, regulations and relationships along with the systems within and by which the authority is exercised as well as controlled within the corporations. However, it can be stated that corporate governance includes the methods by which the corporations and those in control are detained to the explanation. Al-Bawab (2015) has stated that good governance endorses shareholder self-assurance in any of the organization’s business procedure and this is highly crucial to the potentialities of the entities scheduled on the ASX to compete strongly for the resources. The governance attributes of a company or organization are largely shaped by a variety of factors both internally and externally and thus the Board of the Directors plays a major role in controlling the company’s domination environments.
However, it can be stated that most common goal of many companies are to have the most effectual ascendancy structure in place that best assembles their individual conditions and the requirements. These help the organization to drive improved organizational presentation whereas at the same time, it aids conformance with a variety of supplies (Acharya et al. 2012). This particular research work has tried to review the governance of the organization named CHEP Brambles Australia. Moreover, proper use of concepts, tools and techniques would be incorporated to review the structure, process as well as the effectiveness of the governance of the organization.
CHEP Brambles Australia has been established in Australia in the year 1945. Company profile says CHEP is a foremost of pallet and the container pooling services for the Automotive, Aerospace, Chemical, Consumer Goods, unsullied Foods as well as Manufacturing industries. This company provides equipment pooling that is the shared use of the high superiority standard pallets and the containers by several numerous patrons. At present, the company has more than 12,500 employees and they have successfully served 500,000 consumers touch points from the offices in almost 50 nations of the world. It can be stated that CHEP and the workers have a strong and long standing dedication to the societies that the company survive in and work in (Brambles.com 2016).
The management of this organization states that they are proud enough to provide proper financial assistance and the employee volunteers with the help of their local programs. This company is the members of the Australian based Brambles Group. The company states that CHEP assists their customers to move, store as well as protect the materials, as they flow through each of the stages of their supply chain. The service of the company is vast enough, as their services are distributed in several service sectors (Brambles.com 2016).
Aebi et al. (2012) have stated that having a general ascendancy structure has the power to play a significant position in serving the boards to put on an improved understanding of their omission role. Therefore, it can be stated that the framework have attributes that make a payment to the effectual supremacy and the tools for addressing the governance jeopardy. Apart from that, it can be stated that the proper construction provides a more convincing construct in order to evaluate the roles and responsibilities of the management that tends to fit with the board’s oversight responsibilities. In this part, it is required to focus on the key lay down of objectives and the actions of CHEP for each of these governance rudiments. These have been mentioned here in details.
Governance: The Board of CHEP Brambles Australia establishes the structures and the procedures in order to fulfill the board roles and the farm duties that take into account the viewpoints of the shareholders, controllers and administration among others. The responsible board selects the members and the leaders through an comprehensive and considerate procedure, aligned with the approach of the company. The Board has significantly recognized the major external factors that influence the assumptions as well as the targets and prepare the areas of chances. These are the macro-economic environment, with the anticipations for the universal expansion remaining difficult in the predictable future. The board critically focuses on the industry trends, particularly in the context of a dynamically changing retailing scenario and the ongoing globalization of several supply chains. From the company details, it can be seen that the board looks at the customer demand for the sustainable outsourced supply chain resolutions in the middle of an escalating competitive backdrops (Alattom et al. 2013).
Strategy: The Board of CHEP Brambles Australia advises the administration in the overall expansion of the deliberate priorities as well as plans that properly align with the operation of the corporation and the best interests of the associated stakeholders. These have a proper and appropriate long, middle and the short term focus. The board as well vigorously keeps an eye on the executions of the management of the approved strategic plans and transparency and adequacy of both internal and external communication of the calculated plans. It can be seen that the Board enables to set the target and the procedures in such a way that would insist the company to invest more in the product and the quality service. Apart from that, the focus is on investing more in asset management. Moreover, the company targets to invest in the overall business development in order to support proper diversification (Al-Bawab 2015).
Performance: The main governing body of the company CHEP Brambles Australia reviews as well as approves the strategy of the company along with the annual operating plans as well as the financial plans. Apart from that, the board as well keeps a close watch at the management execution against the already established company budgets and the alignment with the strategic objectives of CHEP Brambles Australia. The board has tried to focus on enhanced nature of performance on the employees, so that they consistently enhance the group returns on the entire Capital Invested to at least 20% by the ends of the Financial Year 2019. Apart from that, it can be stated that the responsible team of the company focuses on improving the overall performance that would assist the company to deliver annual constant-currency percentage sales growth and business expansion in the high single digits (Annual Report 2015).
Integrity: The board believes that without integrity, it is almost impossible to expand and thus integrity is one of the major parts corporate governance of CHEP Brambles Australia. The board sets out the principled intention for the organization, while the administrators adopt as well as implement the policies and the processes that are intended to encourage both the lawful observance and the appropriate standards of honesty, integrity as well as ethics throughout the entire corporation (Aoki 2013).
Talent: It can be seen that the Board chooses, appraises as well as reimburses the CEO and keep close observation on the talent programs of the corporation. The programs are specifically related to the supervisory management and the probable successors to the CEO. Apart from that, it can be seen that the board of CHEP Brambles Australia communicates administrative compensations and sequence decisions in a specific and apparent approach (Blakelock and Whitney 2015).
Risk Governance: The board of CHEP Brambles Australia understands and approximately keeps an eye on the deliberate operations of the corporation along with the monetary and the conformity risk experiences. Moreover, this works together with the management in setting the threat appetite, tolerances and the arrangement with the premeditated precedence (Bushee et al. 2013).
Therefore, from the above discussion, the criterion for reviewing the organizational governance of CHEP Brambles Australia has been found.
Bushee et al. (2013) have stated that the guiding principles of corporate governance are intended to give the corporation the guidelines for the development irrespective of the sizes and the types. In this part, it is required to look at these principles carefully to analyze several aspects. First principle is that the Board of the company plays the major role in approving the vision, purpose and the strategies of the organization. Therefore, it can be stated that the Board is responsible to the members of the organization entirely and must act in the best interests of the corporation. The second principle in this regard is that the board of the organization sets out the cultural and the ethical tone of the corporation. The third principle focuses on the part that all the directors of the company must exercise the independent judgment and provide independent oversight of the management (Chep.com 2016).
The fourth principle states that the board must have a proper and appropriate system of the risk oversight along with the internal controls put in the appropriate place. The fifth principle focuses on the point that the board is accountable for the appointment of the CEO and the continuing evaluation of their performance. The sixth principle to maintain corporate governance of CHEP Brambles Australia focuses on the part that the board must make sure that the corporation communicates with the members along with some other stakeholders in a regular and the timely manner. This communicates to that extent that the responsible board thinks is in the best interests of the organization, so that they have enough data and information for making appropriately informed decisions regarding the organization (Claessens and Yurtoglu 2013).
The seventh principle focuses intensely on the performance of the board and makes sure that it is required to be regularly assessed. Moreover, this focuses on adopting appropriate actions for addressing any identified issues in the organization. Principle eight states the fact that the board normally delegate certain activities and functions to the management. Where it does so, there must be a clear and distinguished statement and understanding as to the functions that have been properly handed over. From the above discussed points, the principles of the board of CHEP Brambles Australia have been found and the board is responsible to look at all these above-mentioned activities carefully to deal with any situations in the organization (Erkens et al. 2012).
Harford et al. (2012) have stated that there exist four characteristics that assist to charge the recital level of the board and put the framework into proper action. Therefore, it can be seen that the Board of CHEP Brambles Australia can use these important attributes to help in identifying the strengths and the occasions for the overall enhancement within each of the government elements. If focus is shed on the roles and responsibilities of the Board of Directors, it can be seen that the reports of CHEP Brambles Australia includes the fiduciary responsibilities for acting in the best interests of the organization and use their power properly for a purpose and targets to avoid conflicts of interest and exercise a duty of care. Recently, it has been seen that CHEP, globe’s leading provider of pallet and container polling solutions is supporting the United Nations High commissioner for Refugees for performing an in-depth study of their global supply chain channels to enhance efficiency as well as reduce the costs (Jo and Harjoto 2012).
Apart from that, it can be seen that the responsible board are committed to support the directors, boards as well as the association in attaining standards of distinction in ascendancy. In this part, it can be seen that the instruction sheet is one of the effective tools used in assessing the present corporate governance of this organization (Wintoki et al. 2012). Instruction Sheet is a description of each of the major and key corporate governance tools. This sheet demonstrates the fact that how they are required to use and who must be interviewed in the course of conducting the proper and useful Corporate Governance Assessment (CGA). Apart from Instruction sheet, Progression matrix is another effective tool that is used in corporate governance (McCahery et al. 2015).
It can be stated that the progression matrix is the main tool to take a snap shot of the corporation’s existing governance framework as well as recognize how the organization is performing in each of the mentioned five places of corporate governance. These five major areas are commitment to good corporate governance, control environment and process, transparency and disclosure, the board of directors and most importantly, the rights of the concerned shareholders of the organization (Weston et al. 2013). However, it can be stated that this tool assists one to significantly analyze corporate governance and assess how properly an organization is performing in the specified five spheres of corporate governance using the below mentioned criteria. The first criteria is an assessment based on the corporate governance of the clients that is along with four levels, starting from minimum level one to leadership level, i.e. Level 4. The second criterion is a split matrix, which is available for each client type. Therefore, it can be said that in case of CHEP Brambles Australia, use of these two assessment tools are highly observed for measuring corporate governance (Nini et al. 2012).
However, after through the entire research paper, in this part, it is required to mention some effective recommendations that would help the company to perform in the long run. It can be recommended that the company might use “document request list”. This catalog of corporate governance concerned credentials, strategies, plans and procedures of the corporation is meant to be used in combination with data and “Information Request List” to assist in analyzing the company’s framework of good corporate governance. Apart from that, the company can use Information Request List, which is a list of the questions that forms the foundation for the corporate governance investigation of an IFC client corporation. These two tools are recommended the company to use, as this might enhance the present situation. After going through several aspects, it can be seen that the company might use Boot Camp Modules, as this module is designed to use during the quarterly fraternal society board meetings. Tricker (2015) has stated that the unrestricted accessibility offering the continuing and the continual training to strengthen all the good ascendancy practices. This as well would help the organization to deal with any kind of addressed situation related to good governance carefully.
7. Conclusion
After conduction of the entire research work, in this part, it is required to conclude the task. It has been seen that CHEP Brambles Australia is one of the leading worldwide contributor of the supply chain solutions helping the customer goods, fresh food items, beverages, mechanized and the retail divisions in more than 60 nations of the world. Therefore, it is obvious enough to say that the company is required to maintain strong corporate governance in order to sustain in the existing market place. It has been observed that CHEP Brambles Australia presents a broad variety of logistics and the equipped platforms as well as hold up services that are calculated to enhance presentation and lesser jeopardy at the time of enhancing the environmental sustainability. The major corporate governance issues that are mostly seen in the organizations are the roles and responsibilities of the Board, the quality of the financial reports along with auditing, risk management as well as the corporate social responsibility. This particular research work would try to find out the any such issues faced by CHEP Brambles Australia and based on that would try to provide some effective recommendations.
References
Acharya, V.V., Gottschalg, O.F., Hahn, M. and Kehoe, C., 2012. Corporate governance and value creation: Evidence from private equity. Review of Financial Studies, p.hhs117.
Aebi, V., Sabato, G. and Schmid, M., 2012. Risk management, corporate governance, and bank performance in the financial crisis. Journal of Banking & Finance, 36(12), pp.3213-3226.
Alattom, Z.A., Saat, M., Binti, M. and Idris, N.B., 2013. INTERNAL AUDIT QUALITY ROLE IN RAISING THE LEVEL OF CORPORATE GOVERNANCE: A CASE OF JORDANIAN BANKS. International Journal of Academic Research, 5(1).
Al-Bawab, A.A., 2015. The Extent of the Obligation for the Jordanian Private Universities in the Requirements of Corporate Governance to Raise the Performance of the Financial Management: A Field Study. International Journal of Economics and Finance, 8(1), p.131.
Annual Report 2015, 2015. Annual Report 2015. 1st ed.
Aoki, M., 2013. Controlling insider control: issues of corporate governance in transition economies. Chapters.
Blakelock, S. and Whitney, A., 2015. Tax risk governance. Taxation in Australia, 50(4), p.199.
Brambles.com, 1858. Our history. [online] Brambles Corporate Site.
Brambles.com, 2016. Brambles. [online] Brambles Corporate Site.
Bushee, B.J., Carter, M.E. and Gerakos, J., 2013. Institutional investor preferences for corporate governance mechanisms. Journal of Management Accounting Research, 26(2), pp.123-149.
Chep.com, 2016. UNHCR and CHEP to improve delivery of life saving refugee aid with supply chain study.
Claessens, S. and Yurtoglu, B.B., 2013. Corporate governance in emerging markets: A survey. Emerging markets review, 15, pp.1-33.
Erkens, D.H., Hung, M. and Matos, P., 2012. Corporate governance in the 2007–2008 financial crisis: Evidence from financial institutions worldwide.Journal of Corporate Finance, 18(2), pp.389-411.
Harford, J., Mansi, S.A. and Maxwell, W.F., 2012. Corporate governance and firm cash holdings in the US. In Corporate Governance (pp. 107-138). Springer Berlin Heidelberg.
Jo, H. and Harjoto, M.A., 2012. The causal effect of corporate governance on corporate social responsibility. Journal of business ethics, 106(1), pp.53-72.
McCahery, J.A., Sautner, Z. and Starks, L.T., 2015. Behind the scenes: The corporate governance preferences of institutional investors. Journal of Finance, forthcoming.
Nini, G., Smith, D.C. and Sufi, A., 2012. Creditor control rights, corporate governance, and firm value. Review of Financial Studies, 25(6), pp.1713-1761.
Essay Writing Service Features
Our Experience
No matter how complex your assignment is, we can find the right professional for your specific task. Contact Essay is an essay writing company that hires only the smartest minds to help you with your projects. Our expertise allows us to provide students with high-quality academic writing, editing & proofreading services.
Free Features
Free revision policy
$10Free bibliography & reference
$8Free title page
$8Free formatting
$8How Our Essay Writing Service Works
First, you will need to complete an order form. It's not difficult but, in case there is anything you find not to be clear, you may always call us so that we can guide you through it. On the order form, you will need to include some basic information concerning your order: subject, topic, number of pages, etc. We also encourage our clients to upload any relevant information or sources that will help.
Complete the order form
Once we have all the information and instructions that we need, we select the most suitable writer for your assignment. While everything seems to be clear, the writer, who has complete knowledge of the subject, may need clarification from you. It is at that point that you would receive a call or email from us.
Writer’s assignment
As soon as the writer has finished, it will be delivered both to the website and to your email address so that you will not miss it. If your deadline is close at hand, we will place a call to you to make sure that you receive the paper on time.
Completing the order and download