Capstone: The what, why and how This capstone introduces you to researching and interpreting the voluntary disclosures of a publicly listed company to determine its governance and ethical outlook. The knowledge you have gained from modules 6–9 are of high importance to this exercise. These skills are highly valued by business specialists such as: Corporate governance practitioners and consultants Business and investment analysts Auditors Corporate accountants and Investment funds looking for companies to invest in. Remember that it is a company’s stakeholders who determine what is acceptable and not acceptable for that company to do. Therefore, to determine where a company is looking to for its guidance (for example, shareholders, powerful stakeholders, all stakeholders) is an important step in identifying a company’s likely ethical outlook. A bank that is focused upon its most powerful shareholders will talk to them directly in their voluntary disclosures, and this will manifest itself in how the company conducts itself in society. In contrast, a company that is vitally concerned about how society views its actions relating to the environment will disclose information suitable to that audience, and will probably conduct its affairs in a complementary manner. Investors seeking to invest in companies committed to sustainable operations may choose the latter company over the former (however, there are many other considerations such as the company’s return on investment record that cannot be ignored), while an investment fund that needs to grow its own return on investor funds might choose the former to invest in. This capstone project is not about making judgments concerning the likely ethics of a company; we simply do not have enough information on hand to make such a judgment. And remember that a company wholly focused on profits and returns to shareholders can be just a ethical (in the eyes of its stakeholders) as one who takes an interest in its environmental “footprint”. What is of interest to us is that each company is different and can be ethical in different ways. This capstone is about investigating and coming to a conclusion about a company’s likely ethical and governance outlook. You will read the company’s own disclosures, apply appropriate theories and come to reasonable conclusions, all of which you will report upon. The following steps are about how you will undertake this assessment. Requirements You have been provided with an ASX company code. You can go here to locate it. You should then go to this ASX site at https://www.asx.com.au/prices/company-information.htm to locate your company's name and further details such as the company's web address. You may even find the company's latest financial report located there. If you are studying ACCT20074 or ACCT20075 this term, you will notice that you have already been allocated the same company. Once you have your company, you are required to research and report on the company, its industry and its likely governance and ethical outlook. You are to provide a report in the following structure: Title sheet: Must contain your name and student ID, the Unit name and code and the assignment title. Executive summary: A brief overview of the report in no more than two paragraphs. The reader should understand the scope, reason and outcomes of the report by reading the executive summary. Introduction: Provide a more detailed “road map” of the report, including: The purpose of the report What research you have done What theories you have applied What the essential outcomes are. Report: Your responses to the following four requirements go here - 2,500 words. Conclusion: Your overall conclusion on the company’s likely governance and ethical outlook, and briefly how your conclusion was supported by evidence and theory. Reference list: Use APA. Every document and theory must be referenced. The four requirements for your report are as follows: 1. Introduce and summarise the company (500 words, 8 marks) In this section, please tell us about the company, the industry it is in, and its recent history. 2. Summary of corporate governance at your company (500 words, 8 marks) Please locate the latest annual report published by your company. Locate the following and provide a summary of what they say: Composition of the board, including the ratio of independent to non-independent directors. Is the Chairperson of the board an independent director? The reports from the Chairperson and the CEO The remuneration report—summarise how directors and executives are remunerated. Provide an overall summary of the report stating what immediate priorities of the company are and what plans might be in place to achieve them. You are not expected to provide a financial analysis of the company unless it supports any of the points above. 3. Board orientation (1,000 words, 16 marks) Review your company’s most recent annual report and its web site. You should also read any media releases it might show on its web site. Analyse what you find and determine the most likely orientation of its board. You will find the table on page 11 of the Module 7 Study Guide very useful, as well as the supporting discussion. Make sure you justify your conclusion with reference to whichever theories are most applicable. 4. Interpretation of company communications using Legitimacy Theory (500 words, 8 marks) You might want to start preparing for this section by locating and reading the three academic journal articles referenced on Page 7 of the Module 8 Study Guide. They are excellent examples of how you might look for evidence of a company concerned with its legitimacy. Assessment Criteria You will be assessed on: Quality of your report (80%) Quality of your English expression (10%) The readability (presentation) of your report (10%). Proper referencing is expected. Failure to accurately and consistently apply the APA referencing standard will result in up to 5 marks being penalised off your overall grade. If in doubt, you can find the APA standard here.