Importance of Corporate Governance and OECD Samples †MyAssignmenthelp

Question: Discuss about the Importance of Corporate Governance and OECD. Answer: Introduction The assignment focuses upon the importance of corporate governance within the context of a business organization. The organization for Economic Cooperation and Development (OECD) defines corporate governance as relationship among a companys board, management, shareholders and different stakeholders. It provides a structure for setting the objectives of the company and the means of attaining the objectives. The assignment further studies the importance of structural changes within the business context. For the current assignment, the Baby Bunting Group Company Limited (BBGCL) have been chosen which is an Australia based nursery retailer and one-stop baby shop. The company had been found and run as a family owned business organization. However, recently the majority shares of the company had been undertaken by the Government making it a public sector Company. The aim was to provide baby care products to the new born to 3 years of age at affordable prices. It further analyses the legislative requirements and the impact of the same upon controlling the internal procedures within the organization. Requirement of corporate structural changes The changes in the structures and policies of corporate governance helps in meeting with the business objectives of the organization such as protecting company assets from accidental losses, to ensure reliability of financial information, promote an environment where the staff and themanagement can maximize their productivity for the benefits of the organization (Ball et al. 2013). There are a number of reasons based upon which the corporate governance policies of a company or business organization are restructured. Some of these have been discussed within the context of the assignment such as change in management. In this respect, BBGCL have been changing its governance from that of a private retailer store to a public sector undertaking (Babybuntingcorporate 2017). Therefore, the change in ownership called for revision of the corporate governance policies of the company. In this respect, the reduction of the commodities sold by the retail group can incur sufficient amount of losses. Therefore, new policies need to be laid out where adequate resources and funds are provided by the government. The policies and pricing needs to be transparent which will prevent the overseas customer from paying more for the products sold (Too and Weaver 2014). The retail group therefore needs to clearly mention its pricing policies and terms of services and conditions over its w eb portals to prevent any forms of ethical breach. Purpose of corporate governance activities The corporate governance activities can help the board in understanding the overall organizational oversights and objectives. The attributes of the corporate governance helps in analysing the financial risks. The corporate governance framework helps in focussing upon the important issues and deal with them within limited time frame and resources (Tricker and Tricker 2015). The activities of corporate governance help to mitigate conflicts of interest and to ensure that the assets of the company are productively used in the best interest of the investors and stakeholders. The BBGCL may be facing a lot of conflicts within the international market owing to change of power. The governance activities help in upholding the organizational interests (Alexander et al. 2014). This further provides the company with an upper hand over its similar market players. Directors duties The responsibilities of the directors within the context of corporate governance could be described over here as follows. The Board of directors has the authority for resolving matters related to strategic decision making (Young and Thyil 2014). They are also responsible for monitoring the performance of the seniormanagement and employees within the retail outlet. The director plays a crucial role in planning andmanagement of the merger and acquisition activities. In the present context, the directors of the BBGCL need to daft the business objectives and present the governing objectives in front of the government. ASIC legislative requirements The Australian Securities and Investments Commission (ASIC) is an Australian government body that that acts as a corporate regulator that acts as a corporate regulator. Here, the ASIC is responsible for enforcing and regulating the financial resources of the company (Asic 2017). The goal of ASIC is to unite the corporate regulators across Australia. The following legislative requirements as established by ASIC could be followed by BBGCL such as- Promotion of informed participation by consumers and investors in the financial system Administration of law within the business establishments with procedure and hazards Make up-to-date information about the company available to the public Review of current internal control procedures The internal control procedures of the BBGCL have been discussed as follows. Some of these policies have been found to possess loopholes and gaps and needs to be reviewed or modified for the maximization of the organization productivity. Some of these are segregation of duties, implementation of authorisation procedures, maintenance of adequate records and documents, implementation of physical control for safeguarding the assets of the company, conducting independent verifications (Khan et al. 2014). However, there are issues arising with respect to implementation of the authorisation procedures and conducting of independent verification with respect to merger and acquisition. In this respect, BBGCL had been taken over by the government enterprises resulting in chaotic situations where the company cannot conduct internal verifications except in emergency situation. This becomes limitation on the part of the business organization where they cannot practise sufficient autonomy within their own operations. procedures for controlling handling of cash receipts and payments For preventing frauds and errors in the handling of cash receipts and payments a number of risk control methods could be followed. Some of the assessment tools which could be implemented over here are the Risk control Matrix. It serves as the audit plan and identifies the plausible risks that the organizations might be facing. Some of the test control results which had been applied by the BBGCL are use of electronically read barcodes indicating the specificities of the product along with the prices. It helps in accurate regirding of transaction data in much real time across large databases and prevents frauds. Conclusion The corporate governance consists of list of factors and attributes based upon which an organization is controlled and directed. The implementation of the governance policies ensures legal compliance and prevents unlawful activities or behaviour within the organization. The BBGCL follows a one-to-many relationship for establishment of a result between one control test and many control results by application of the control tests against multiple items. The multiple number of options taken into consideration which helps in focussing upon the long term strategies which could be used for mitigating the financial risks suffered by the company. References Alexander, J.L., Smith, K.A., Mataras, T., Shepley, S.B. and Ayres, K.M., (2015). A Meta-Analysis and Systematic Review of the Literature to Evaluate Potential Threats to Internal Validity in Probe Procedures for Chained Tasks.The Journal of Special Education,49(3), pp.135-145. Asic (2017), Asic , Available at : https://www.asic.gov.au/about-asic/ [Accessed on 26 Nov. (2017)] Babybuntingcorporate (2017), Babybuntingcorporate , Available at : https://www.babybuntingcorporate.com.au/about-us [Accessed on 28 Nov. (2017)] Ball, A., Grubnic, S. and Birchall, J., (2014). 11 Sustainability accounting and accountability in the public sector.Sustainability accounting and accountability, p.176. Drennan, L.T., McConnell, A. and Stark, A., (2014).Risk and crisis management in the public sector. Abingdon: Routledge, p.25. Khan, A., Muttakin, M.B. and Siddiqui, J., (2014). Corporate governance and corporate social responsibility disclosures: Evidence from an emerging economy.Journal of business ethics,114(2), pp.207-223. Too, E.G. and Weaver, P., (2014). The management of project management: A conceptual framework for project governance.International Journal of Project Management,32(8), pp.1382-1394. Tricker, R.B. and Tricker, R.I., (2015).Corporate governance: Principles, policies, and practices. Oxford University Press, USA, pp. 15-25. Young, S. and Thyil, V., (2014). Corporate social responsibility and corporate governance: Role of context in international settings.Journal of Business Ethics,122(1), pp.1-24.