Property link Group is a large corporation in Australia, and it is one of the largest companies formed in the year 2016. Property link Group consists of three branches in one, that is Property link Holdings Limited (PHL), Property link trust (PT), and Property link Australian Industrial Partnership (PAIP). In the year 2016, shares in Property link holdings and Property link trust were merged into one. The Property link Investment Management Limited is the responsible entity that is in charge of managing the property link group. The units in Property link trust and Property link Australian industrial partnership cannot be treated as separate entities. They all form the shares in Property Link Group and can only be traded as one. This company deals in Australian industrial and office real estate.
The report of property link Group shows how the management have interlinked the objective of the company regarding ethics and governance. The company’s primary purpose is to provide to the investors the external funds from the office of real estate. The strong corporate governance which upholds the attainment of strategic goals is very crucial to the success of Property link. The Stakeholder theory, agency theory, and the stewardship theory were used by the administration of Property link to develop objectives which are in line with ethics and governance. The stakeholder theory allowed the management of the company to have a strong relationship with the employees and the suppliers. The network of associations with numerous gatherings can influence necessary leadership forms and decision making in the company. The stakeholder theory focuses on the administration decision making and foresees that all the interests of the shareholders are put into consideration (Soltani & Maupeti, 2015).
The stewardship theory as proposed by Donaldson (1997) focuses on how the stewards utilize shareholders wealth through proper organization performance. The top management, as the stewards, works on behalf of the shareholders and should integrate their objectives as part of the company Glinkowska & Kaczmarek, 2015). The Agency theory, on the other hand, is an economic theory. The relationship between the stakeholders and the agents (top management) shows that there is a difference between ownership and control of the company. The agents are hired to work on behalf of the shareholders in running the company. In this case, the owners of the company should not be involved directly in the control of the company because it can bring about a conflict of interest. The agent should focus on projects that bring high profits and earn a fixed income without any incentive component.
The essential outcome of this research is the focus on proper utilization of stakeholder’s wealth. The top management of the property link group should not use their position for individual benefit. A manager with outstanding ethics and good governance will ensure effective utilization of capital for the interest of shareholders (Arjoon, 2000). The report gives an insight on how the wealth is distributed and the process of formulating the objectives of the company. The goals of the property link group give shows how the top management works in line with the wants of the stakeholders. The report is useful to the auditors when checking the financial statements of the company (Hilgartner & Hurlbut, 2017)
The board of directors of Propertylink Group is chaired by Peter Lancken, who is an independent director. He chairs the board of directors, but he is not involved in the company’s day to day activities. Stuart Dawes is the company’s managing director and also a member of the board of governors. Ian Hutchinson, Sarah Kenny, Cristopher Ryan, and Anthony Ryan are members of the committee who also are non-executive Director. Stephen Day is an executive director, and he is the member of the board as well as the member of the executive team. The non-executive director is an independent director, Propertylink board of directors have five Non-executive directors and only two executive directors. Only two members of the committee are involved in the day-to-day running of the Propertylink Company (Rush &Carpenter, 2017).
The chairperson, Mr Peter Lancken, is very positive about the growth of the company. The investor demand is very high, and when this is added to the strategies set by the board on the market trends, the company will be in an excellent position to do profitable business. The urbanization and e-commerce have brought in new investment which when added with the current financing will bring huge profits (Solomon, 1992). The chairperson praised the position of their industrial portfolio because they are well positioned to urban areas, e.g., Sydney where the demand is very high. The strength to do business within our existing assets is the most significant part in the currency markets because of stiff asset pricing. The Propertylink Group is proud to own $800 million worth of assets. The chief executive officer also commented on the skilled and professional set of employees they have. On behalf of the board and the top management, we thank everyone for their contribution and hard work throughout the year.
The remuneration of the board of directors and the executive is well stated and designed to help in building the strategic objectives. The remuneration policy of Propertylink is developed by Propertylink board and the remuneration and nomination committee. The immediate priorities of the organization are the setting up of a solar plant in the industrial portfolio. The company is focusing on how to utilize water and energy efficiency without wastage. The board of directors has put in place measures and policies to implement the setting up of the solar plant to help in saving of energy. The company realized that it lost a lot of money due to wastage of resources, the executive members formulated policies on how to utilize water and energy without wastage.
|
Directors |
Securities |
|
Peter Lancken |
1,881,892 |
|
Stuart Dawes |
3,750,593 |
|
Stephen Day |
6,066,052 |
|
Ian Hutchinson |
72,191 |
|
Sarah Kenny |
– |
|
Anthony Ryan |
499,719 |
|
Cristopher Ryan |
1,006,499 |
|
Total |
13,276,946 |
This are the securities of all the directors of Propertylink as at 30 June 2018
The key management personnel covered by this report considers that the current framework should provide a balance between fixed and variable remuneration components. The board considers the feedback that is received from investors and other company stakeholders and reviews the appropriateness of the Propertylink remuneration framework on the ongoing basis.
|
Executive KMP |
Fixed remuneration |
Increase/decrease |
Fixed remuneration |
Percentage change |
|
Stuart Dawes |
550,000 |
75,000 |
625,000 |
14% |
|
Stephen Day |
525,000 |
139,125 |
385,875 |
27% |
|
Peter McDonald |
525,000 |
25,000 |
550,000 |
5% |
|
Tony Groth |
240,000 |
60,000 |
300,000 |
25% |
|
Total |
1,840,000 |
20,875 |
1,860,875 |
Board orientation refers to a process for helping new directors contribute fully, and as early in their tenure as possible, to the governing work of the board. The Propertylink orient the board members during the regular meetings. However, the board members might choose to go for a retreat to guide and welcome the new members into the company. The discussion might include the objectives of the organisation and who should lead the process and how an orientation program might be structured. Board orientation is not just about the transfer of information the guide of how to work as a director. As a result of their orientation, new directors will understand their roles and responsibilities in the office. The new members are made aware of the goals and objective of the company. They are also made aware of the main stakeholders of the organisation and how the decision are made in the company. On 30 June 2017 Peter McDonald and Derek Nix resigned from the board of directors and paved way for Sarah Kenny who was appointed as the new member of the board. The orientation of Sarah was done during the regular meetings held by the board.
The decisions of the board of directors and their focus determines the future of a company. The board with shareholder-centred governance provides a platform to base their proposals on the individual property rights paradigm. As the owners and givers of the capital, shareholders always prefer to showcase their interests over those of the stakeholders. It is contended that as the sole owners of the company, shareholders should hold the top administration accountable to the primary objective of maximizing shareholder wealth (Gotsis & Grimani, 2015). The shareholder corporate governance is there to provide maximum profits to the owners of the company. The Propertylink Group boards have focused primarily on benefiting the shareholders by making all the necessary adjustment to ensure maximum profits to the shareholders. As per the agency theory, shareholders employ the boards of directors to work as their agents and allow the smooth running of the organization. The directors are expected to work on behalf of the shareholders (Bosse &Phillips, 2016). The chairman of the board gave a direction on how the company will realize its primary objective.
The most recent report was for the financial year 2018 which ended on 30 June 2018. The income rose from $87,123 million to $142,839 million, and this is such a vast improvement from the financial year 2017. The total comprehensive income is as a result of quality management and strong leadership of the board. The shared profit was $19.8 million compared to $8.5 million of the previous years. The strategic board decision on how to conduct their business has paid off. Following this great achievement, the board will have a big challenge when formulating the objectives for the financial year 2019. The returns for the fiscal year 2019 should not come below the profits for the year 2018. The chairman of the board, Peter Lancken, has promised to improve the current financial position of Propertylink Group to a higher level. Mr. Peter wants to implement the use of good and quality governance in attaining the goals of the fiscal year 2019.
The Kant’s deontological theory states the objectives of ethical standards which should be upheld and respected by everyone. The actions of an individual should not be influenced by their instincts or their personal needs but rather what the society expects from them. The ethical focus should come from the degree of ethical behavior and the need to give back to the organization (Shi & Connelly, 2017). The board of directors recognized the importance of the community and decided to set up several charities that give back to the disadvantaged people in the society. For example, Stephen Day, the executive director is a cricket player and have supported the use of cricket to funds for schools and the needy in the society. He supports the use of sports in raising funds to help the less fortunate in the community.
Batting for change is another organization associated with Propertylink which helps the needy in the society and empower women through education. The Aristotle’s virtue theory states that integrity of person’s character depends on ethical behaviour (Hutchinson, 2015). The conduct of a board member should be in a manner that it upholds the integrity of the office he holds. Aristotle’s virtue theory is applied in the Propertylink Group by the board members who chose to help people in the society rather than enriching themselves. Propertylink limited is a primary partner that help batting for change raise money for young women in Sri Lanka and India. Bear Cottage children’s Hospice is another prime beneficiary of the Propertylink generosity. The employees spent a day cleaning and hanging out with the families in need. The children received food, clothes, and funds form the Propertylink limited (Heinaman, 2018).
The strategy of the board is very clear and focuses on benefiting the shareholders as well as the community. The main focus of the board is on investment. The board has strategized in a manner that they invest in industrial properties that will bring stable income and raising capital growth (Holllerer & Hwang 2016). The board has set the objectives in line with global institutional investors. Another strategy is enhancing the growth of assets. Repositioning of assets, capital expenditure and the expansion of existing funds will position Propertylink on a global platform. The last strategy is maintaining the balance sheet and external funds which ranges between 30% and 40%. The board has strategized to allow ethics and good governance with the achievement of shareholders’ interests.
In conclusion, the board orientation determines the future of the Propertylink Limited. When the board focuses on investment, enhancing the growth of assets and maintaining the same capital expenditure will bring about the success of the company. The implementation of agency theory, makes the board realize that the interest of the shareholder is put in the priority (Pepper &Gore, 2015). The board should establish clear goals and objectives which focuses on utilizing the wealth of the shareholders. Kant’s deontological theory allows the board to focus on giving the services to the community. The society is an essential part of Propertylink limited, and the organization offers the tenants, customers, and partners. Therefore, the community is an integral part of Propertylink and as the director, Stephen Day helps in raising funds for the community by using cricket.
Legitimacy theory shows that there is a contract between the company and the society. The legitimacy theory assumes that the activities or action of an individual is desirable and useful within the community. This theory explains further the role of the individuals and organizations in providing services to the society (Zhang &Zhu, 2018). The beliefs and norms of the society should be upheld in the conduct of the company, how the public perceives an organization should be reported in a manner conforming to the community requirements. The society provides labour, transport infrastructure and other natural resources required by the company, and in return, the company produces products and services needed by the community (David & Chari, 2017).
In Propertylink Company Limited, the legitimacy theory has been well integrated into the company’s objectives. For example, Propertylink Limited is a significant contributor to St Edmunds College, which is a school for the disabled. The school has helped children with autism, sensory impairment among others. The actions of Propertylink Limited towards helping the needy in the society keeps them in an excellent position to do their business in the community. The members of the society are pleased with the work of Propertylink, and therefore they will become loyal customers. Propertylink have created a good reputation in its community by providing help and promoting education for the needy. Using the social and environmental reports, the company can be able to measure itself and the legitimacy of its operation.
According to Khan (2017), legitimacy theory has helped companies to be regulatory compliant. By offering quality services to the society, the company becomes compliant with the norms and beliefs of that society. Propertylink Limited have gain market benefits from the reputation of social and environmental reports. It worked with Bushlink group with Landcare Australia in cleaning Sydney’s beach environment. By doing so, Propertylink gain popularity in environment protection. Propertylink can gain an added advantage over its competitors due to the reputation it earned on the services offered to the community. Companies who do not uphold their social and environmental responsibility will not do well and might lose customers to their competitors. It is recommended that companies should keep good ethics and governance that helps in maintaining a healthy relationship with the society (Van, 2014).
Conclusion
To sum up, it is evident that ethics and governance play an essential role in the success of the company. For the case of Propertylink Group, the board has put great emphasis on the implementation of legitimacy theory on ethics and governance. Kant’s deontological theory suggests that everyone in service to the society should uphold ethical codes. Kant’s philosophy is implemented by the executive director, Mr. Stephen Day, who has put considerable work in support of the community by using cricket. When playing cricket, they help raise funds for the needy students and disadvantaged women in the society. The shareholder-centered interest is implemented, followed by the societal needs. The primary objective of Propertylink Company is to provide security holders and investors in our external funds with superior risk-adjusted returns from Australian industrial and office real estate.
References
Arjoon, S. (2000). Virtue theory as a dynamic theory of business. Journal of Business Ethics, 28(2), 159-178.
Bowen, S. A. (2000). A Theory of Ethical Issues Management: Contributions of Kantian Deontology to Public Relations’ Ethics and Decision-Making.
Bosse, D. A., & Phillips, R. A. (2016). Agency theory and bounded self-interest. Academy of Management Review, 41(2), 276-297
Chari, M. D., David, P., Duru, A., & Zhao, Y. (2017). Bowman’s risk-return paradox: An agency theory perspective. Journal of Business Research.
Glinkowska, B., & Kaczmarek, B. (2015). Classical and modern concepts of corporate governance (Stewardship Theory and Agency Theory). Management, 19(2), 84-92.
Gotsis, G., & Grimani, K. (2015). Virtue theory and organizational behavior: an integrative framework. Journal of Management Development, 34(10), 1288-1309.
HÖLLERER, M. A., Hwang, H., & LOK, J. (2016). “Managers to the Rescue!”: Evaluating the Legacy of Stewardship Theory from an Institutional Perspective. In Advancing Organizational Theory in a Complex World (pp. 134-149). Routledge.
Hutchinson, D. S. (2015). The virtues of Aristotle. Routledge.
Heinaman, R. A. (2018). Aristotle and moral realism. Routledge.
Harris, L., & Monaghan, R. (2018). Ethics and human rights in counterterrorism. Routledge Handbook of Terrorism and Counterterrorism, 509-518.
Hilgartner, S., Prainsack, B., & Hurlbut, J. B. (2017). Ethics as governance in genomics and beyond. The handbook of science and technology studies, 823-851.
Khan, H. A. (2017). Globalization and the Challenges of Public Administration: Governance, Human Resources Management, Leadership, Ethics, E-Governance and Sustainability in the 21st Century. Springer.
Nevo, S., Nevo, D., & Pinsonneault, A. (2016). A Temporally Situated Self-Agency Theory of Information Technology Reinvention. Mis Quarterly, 40(1), 157-186.
Pepper, A., & Gore, J. (2015). Behavioral agency theory: New foundations for theorizing about executive compensation. Journal of management, 41(4), 1045-1068
Rush, A., Ling, R., Carpenter, J. E., Carter, C., Searles, A., & Byrne, J. A. (2017). Research governance review of a negligible-risk research project: Too much of a good thing?. Research Ethics, 1747016117739937.
Soltani, B., & Maupetit, C. (2015). Importance of core values of ethics, integrity and accountability in the European corporate governance codes. Journal of Management & Governance, 19(2), 259-284.
Solomon, R. C. (1992). Corporate roles, personal virtues: An Aristotelean approach to business ethics. Business Ethics Quarterly, 2(3), 317-339.
Shi, W., Connelly, B. L., & Hoskisson, R. E. (2017). External corporate governance and financial fraud: Cognitive evaluation theory insights on agency theory prescriptions. Strategic Management Journal, 38(6), 1268-1286.
Van Hooft, S. (2014). Understanding virtue ethics. Routledge.
Zhang, F., Wei, L., Yang, J., & Zhu, L. (2018). Roles of relationships between large shareholders and managers in radical innovation: a stewardship theory perspective. Journal of Product Innovation Management, 35(1), 88-105.
Property link Group is a large corporation in Australia, and it is one of the largest companies formed in the year 2016. Property link Group consists of three branches in one, that is Property link Holdings Limited (PHL), Property link trust (PT), and Property link Australian Industrial Partnership (PAIP). In the year 2016, shares in Property link holdings and Property link trust were merged into one. The Property link Investment Management Limited is the responsible entity that is in charge of managing the property link group. The units in Property link trust and Property link Australian industrial partnership cannot be treated as separate entities. They all form the shares in Property Link Group and can only be traded as one. This company deals in Australian industrial and office real estate.
The report of property link Group shows how the management have interlinked the objective of the company regarding ethics and governance. The company’s primary purpose is to provide to the investors the external funds from the office of real estate. The strong corporate governance which upholds the attainment of strategic goals is very crucial to the success of Property link. The Stakeholder theory, agency theory, and the stewardship theory were used by the administration of Property link to develop objectives which are in line with ethics and governance. The stakeholder theory allowed the management of the company to have a strong relationship with the employees and the suppliers. The network of associations with numerous gatherings can influence necessary leadership forms and decision making in the company. The stakeholder theory focuses on the administration decision making and foresees that all the interests of the shareholders are put into consideration (Soltani & Maupeti, 2015).
The stewardship theory as proposed by Donaldson (1997) focuses on how the stewards utilize shareholders wealth through proper organization performance. The top management, as the stewards, works on behalf of the shareholders and should integrate their objectives as part of the company Glinkowska & Kaczmarek, 2015). The Agency theory, on the other hand, is an economic theory. The relationship between the stakeholders and the agents (top management) shows that there is a difference between ownership and control of the company. The agents are hired to work on behalf of the shareholders in running the company. In this case, the owners of the company should not be involved directly in the control of the company because it can bring about a conflict of interest. The agent should focus on projects that bring high profits and earn a fixed income without any incentive component.
The essential outcome of this research is the focus on proper utilization of stakeholder’s wealth. The top management of the property link group should not use their position for individual benefit. A manager with outstanding ethics and good governance will ensure effective utilization of capital for the interest of shareholders (Arjoon, 2000). The report gives an insight on how the wealth is distributed and the process of formulating the objectives of the company. The goals of the property link group give shows how the top management works in line with the wants of the stakeholders. The report is useful to the auditors when checking the financial statements of the company (Hilgartner & Hurlbut, 2017)
The board of directors of Propertylink Group is chaired by Peter Lancken, who is an independent director. He chairs the board of directors, but he is not involved in the company’s day to day activities. Stuart Dawes is the company’s managing director and also a member of the board of governors. Ian Hutchinson, Sarah Kenny, Cristopher Ryan, and Anthony Ryan are members of the committee who also are non-executive Director. Stephen Day is an executive director, and he is the member of the board as well as the member of the executive team. The non-executive director is an independent director, Propertylink board of directors have five Non-executive directors and only two executive directors. Only two members of the committee are involved in the day-to-day running of the Propertylink Company (Rush &Carpenter, 2017).
The chairperson, Mr Peter Lancken, is very positive about the growth of the company. The investor demand is very high, and when this is added to the strategies set by the board on the market trends, the company will be in an excellent position to do profitable business. The urbanization and e-commerce have brought in new investment which when added with the current financing will bring huge profits (Solomon, 1992). The chairperson praised the position of their industrial portfolio because they are well positioned to urban areas, e.g., Sydney where the demand is very high. The strength to do business within our existing assets is the most significant part in the currency markets because of stiff asset pricing. The Propertylink Group is proud to own $800 million worth of assets. The chief executive officer also commented on the skilled and professional set of employees they have. On behalf of the board and the top management, we thank everyone for their contribution and hard work throughout the year.
The remuneration of the board of directors and the executive is well stated and designed to help in building the strategic objectives. The remuneration policy of Propertylink is developed by Propertylink board and the remuneration and nomination committee. The immediate priorities of the organization are the setting up of a solar plant in the industrial portfolio. The company is focusing on how to utilize water and energy efficiency without wastage. The board of directors has put in place measures and policies to implement the setting up of the solar plant to help in saving of energy. The company realized that it lost a lot of money due to wastage of resources, the executive members formulated policies on how to utilize water and energy without wastage.
|
Directors |
Securities |
|
Peter Lancken |
1,881,892 |
|
Stuart Dawes |
3,750,593 |
|
Stephen Day |
6,066,052 |
|
Ian Hutchinson |
72,191 |
|
Sarah Kenny |
– |
|
Anthony Ryan |
499,719 |
|
Cristopher Ryan |
1,006,499 |
|
Total |
13,276,946 |
This are the securities of all the directors of Propertylink as at 30 June 2018
The key management personnel covered by this report considers that the current framework should provide a balance between fixed and variable remuneration components. The board considers the feedback that is received from investors and other company stakeholders and reviews the appropriateness of the Propertylink remuneration framework on the ongoing basis.
|
Executive KMP |
Fixed remuneration |
Increase/decrease |
Fixed remuneration |
Percentage change |
|
Stuart Dawes |
550,000 |
75,000 |
625,000 |
14% |
|
Stephen Day |
525,000 |
139,125 |
385,875 |
27% |
|
Peter McDonald |
525,000 |
25,000 |
550,000 |
5% |
|
Tony Groth |
240,000 |
60,000 |
300,000 |
25% |
|
Total |
1,840,000 |
20,875 |
1,860,875 |
Board orientation refers to a process for helping new directors contribute fully, and as early in their tenure as possible, to the governing work of the board. The Propertylink orient the board members during the regular meetings. However, the board members might choose to go for a retreat to guide and welcome the new members into the company. The discussion might include the objectives of the organisation and who should lead the process and how an orientation program might be structured. Board orientation is not just about the transfer of information the guide of how to work as a director. As a result of their orientation, new directors will understand their roles and responsibilities in the office. The new members are made aware of the goals and objective of the company. They are also made aware of the main stakeholders of the organisation and how the decision are made in the company. On 30 June 2017 Peter McDonald and Derek Nix resigned from the board of directors and paved way for Sarah Kenny who was appointed as the new member of the board. The orientation of Sarah was done during the regular meetings held by the board.
The decisions of the board of directors and their focus determines the future of a company. The board with shareholder-centred governance provides a platform to base their proposals on the individual property rights paradigm. As the owners and givers of the capital, shareholders always prefer to showcase their interests over those of the stakeholders. It is contended that as the sole owners of the company, shareholders should hold the top administration accountable to the primary objective of maximizing shareholder wealth (Gotsis & Grimani, 2015). The shareholder corporate governance is there to provide maximum profits to the owners of the company. The Propertylink Group boards have focused primarily on benefiting the shareholders by making all the necessary adjustment to ensure maximum profits to the shareholders. As per the agency theory, shareholders employ the boards of directors to work as their agents and allow the smooth running of the organization. The directors are expected to work on behalf of the shareholders (Bosse &Phillips, 2016). The chairman of the board gave a direction on how the company will realize its primary objective.
The most recent report was for the financial year 2018 which ended on 30 June 2018. The income rose from $87,123 million to $142,839 million, and this is such a vast improvement from the financial year 2017. The total comprehensive income is as a result of quality management and strong leadership of the board. The shared profit was $19.8 million compared to $8.5 million of the previous years. The strategic board decision on how to conduct their business has paid off. Following this great achievement, the board will have a big challenge when formulating the objectives for the financial year 2019. The returns for the fiscal year 2019 should not come below the profits for the year 2018. The chairman of the board, Peter Lancken, has promised to improve the current financial position of Propertylink Group to a higher level. Mr. Peter wants to implement the use of good and quality governance in attaining the goals of the fiscal year 2019.
The Kant’s deontological theory states the objectives of ethical standards which should be upheld and respected by everyone. The actions of an individual should not be influenced by their instincts or their personal needs but rather what the society expects from them. The ethical focus should come from the degree of ethical behavior and the need to give back to the organization (Shi & Connelly, 2017). The board of directors recognized the importance of the community and decided to set up several charities that give back to the disadvantaged people in the society. For example, Stephen Day, the executive director is a cricket player and have supported the use of cricket to funds for schools and the needy in the society. He supports the use of sports in raising funds to help the less fortunate in the community.
Batting for change is another organization associated with Propertylink which helps the needy in the society and empower women through education. The Aristotle’s virtue theory states that integrity of person’s character depends on ethical behaviour (Hutchinson, 2015). The conduct of a board member should be in a manner that it upholds the integrity of the office he holds. Aristotle’s virtue theory is applied in the Propertylink Group by the board members who chose to help people in the society rather than enriching themselves. Propertylink limited is a primary partner that help batting for change raise money for young women in Sri Lanka and India. Bear Cottage children’s Hospice is another prime beneficiary of the Propertylink generosity. The employees spent a day cleaning and hanging out with the families in need. The children received food, clothes, and funds form the Propertylink limited (Heinaman, 2018).
The strategy of the board is very clear and focuses on benefiting the shareholders as well as the community. The main focus of the board is on investment. The board has strategized in a manner that they invest in industrial properties that will bring stable income and raising capital growth (Holllerer & Hwang 2016). The board has set the objectives in line with global institutional investors. Another strategy is enhancing the growth of assets. Repositioning of assets, capital expenditure and the expansion of existing funds will position Propertylink on a global platform. The last strategy is maintaining the balance sheet and external funds which ranges between 30% and 40%. The board has strategized to allow ethics and good governance with the achievement of shareholders’ interests.
In conclusion, the board orientation determines the future of the Propertylink Limited. When the board focuses on investment, enhancing the growth of assets and maintaining the same capital expenditure will bring about the success of the company. The implementation of agency theory, makes the board realize that the interest of the shareholder is put in the priority (Pepper &Gore, 2015). The board should establish clear goals and objectives which focuses on utilizing the wealth of the shareholders. Kant’s deontological theory allows the board to focus on giving the services to the community. The society is an essential part of Propertylink limited, and the organization offers the tenants, customers, and partners. Therefore, the community is an integral part of Propertylink and as the director, Stephen Day helps in raising funds for the community by using cricket.
Legitimacy theory shows that there is a contract between the company and the society. The legitimacy theory assumes that the activities or action of an individual is desirable and useful within the community. This theory explains further the role of the individuals and organizations in providing services to the society (Zhang &Zhu, 2018). The beliefs and norms of the society should be upheld in the conduct of the company, how the public perceives an organization should be reported in a manner conforming to the community requirements. The society provides labour, transport infrastructure and other natural resources required by the company, and in return, the company produces products and services needed by the community (David & Chari, 2017).
In Propertylink Company Limited, the legitimacy theory has been well integrated into the company’s objectives. For example, Propertylink Limited is a significant contributor to St Edmunds College, which is a school for the disabled. The school has helped children with autism, sensory impairment among others. The actions of Propertylink Limited towards helping the needy in the society keeps them in an excellent position to do their business in the community. The members of the society are pleased with the work of Propertylink, and therefore they will become loyal customers. Propertylink have created a good reputation in its community by providing help and promoting education for the needy. Using the social and environmental reports, the company can be able to measure itself and the legitimacy of its operation.
According to Khan (2017), legitimacy theory has helped companies to be regulatory compliant. By offering quality services to the society, the company becomes compliant with the norms and beliefs of that society. Propertylink Limited have gain market benefits from the reputation of social and environmental reports. It worked with Bushlink group with Landcare Australia in cleaning Sydney’s beach environment. By doing so, Propertylink gain popularity in environment protection. Propertylink can gain an added advantage over its competitors due to the reputation it earned on the services offered to the community. Companies who do not uphold their social and environmental responsibility will not do well and might lose customers to their competitors. It is recommended that companies should keep good ethics and governance that helps in maintaining a healthy relationship with the society (Van, 2014).
Conclusion
To sum up, it is evident that ethics and governance play an essential role in the success of the company. For the case of Propertylink Group, the board has put great emphasis on the implementation of legitimacy theory on ethics and governance. Kant’s deontological theory suggests that everyone in service to the society should uphold ethical codes. Kant’s philosophy is implemented by the executive director, Mr. Stephen Day, who has put considerable work in support of the community by using cricket. When playing cricket, they help raise funds for the needy students and disadvantaged women in the society. The shareholder-centered interest is implemented, followed by the societal needs. The primary objective of Propertylink Company is to provide security holders and investors in our external funds with superior risk-adjusted returns from Australian industrial and office real estate.
References
Arjoon, S. (2000). Virtue theory as a dynamic theory of business. Journal of Business Ethics, 28(2), 159-178.
Bowen, S. A. (2000). A Theory of Ethical Issues Management: Contributions of Kantian Deontology to Public Relations’ Ethics and Decision-Making.
Bosse, D. A., & Phillips, R. A. (2016). Agency theory and bounded self-interest. Academy of Management Review, 41(2), 276-297
Chari, M. D., David, P., Duru, A., & Zhao, Y. (2017). Bowman’s risk-return paradox: An agency theory perspective. Journal of Business Research.
Glinkowska, B., & Kaczmarek, B. (2015). Classical and modern concepts of corporate governance (Stewardship Theory and Agency Theory). Management, 19(2), 84-92.
Gotsis, G., & Grimani, K. (2015). Virtue theory and organizational behavior: an integrative framework. Journal of Management Development, 34(10), 1288-1309.
HÖLLERER, M. A., Hwang, H., & LOK, J. (2016). “Managers to the Rescue!”: Evaluating the Legacy of Stewardship Theory from an Institutional Perspective. In Advancing Organizational Theory in a Complex World (pp. 134-149). Routledge.
Hutchinson, D. S. (2015). The virtues of Aristotle. Routledge.
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