Discuss about the Principles of Contemporary Corporate Governance System.
This assessment is demonstrated over the analysis of risk management portfolio in relation to the case study with relation to the Australian legal compliance. This report is focused on the development of reflection over the analysis of case base studies as Australian Wheat Board in order to managing the risk. In context to this, the legal framework and regulations are elaborated which are applied over the settlement of disputes among the parties. Along with this, the legal risks are also discussed in reference to the case study. The governance theories, liabilities, opportunities and threats are also assessed in context to the corporate governance. On the other hand, managing relationships is also elaborated in relation to the stakeholders of businesses. Apart from this, the management of obligation is also evaluated with related aspects as tort of law, negligence, due diligence and breach of contract. Moreover, the future proofing aspect is also reflected in context of strategic planning for the expansion of business such as new branches, takeovers, mergers, joint ventures and franchisees.
It is identified that there is a significant role of the laws and regulations established by the government for the businesses as businesses have to comply with the rules and regulations established by the government. The main reason behind it is that it affects the overall performance of the company. I have gained knowledge regarding different laws that affects the relationships of the businesses with its stakeholders such as contract law, agency cost, goods and services law and employment law. I have learnt that the companies are required to provide equal employment opportunities to the potential candidates. I have also learnt that the law of contract states that there is an existence of the agreement between two or more persons that can be enforceable by the law (McKendrick, 2014). I have also gained information related to the sources of law such as federal, state and common law. This lecture has also helped in attaining the information related to the components and elements related to the legal contract such as the parties entering into the contract should not be minor. Besides this, the contract should be formed with free consent, person with sound mind. Besides this, there should be an existence of an offer and agreement. This has also helped me understanding different types of offers that can be made for entering into a contract in a legal manner (Knapp, Crystal & Prince, 2016).
Managing legal relationship
It is essential for the businesses to enter into a contract that can be enforceable by the law as this may provide them the opportunity to sue the other party for not fulfilling the agreed terms and conditions in the court and receive compensation in return. In addition to this, the contract is valid if the intentions to the parties to contract are to form legal relations. It is also found out that the contract is considered as legal if it is not influenced by fraud, mistake, misrepresentation, duress and undue influence. I have get the in-depth understanding of the elements of the contract law by the relevant legal cases occurred in the past. I have also learnt that the owner of the company and the company itself are two separate entities and owners can sue the company in a legal manner (Adriaanse, 2016). Owners are the representatives of the company. The information gained from studying the employment law, I have gained the information that employer and employee owe duties to each other.
I have gained the information that there is a presence of different special kinds of contracts such as employment contract, agency contract, goods and services contract. All of these contracts are being made by the businesses in a common manner to carry out the trade activities which results in the inflow and outflow of the money from the business. Along with this, the implementation of these contracts in an effective manner helps in the attainment of maximum profits by the businesses (McKendrick, 2014). Thus, the in-depth understanding of the contract law is also helpful in carrying out economic transactions in the day to day life.
From the review of risk management portfolio, it is identified that the governance is a crucial aspect in which the processes are undertaken in order to manage the market, network and system of organizational structure through the norms and laws in the regulatory body. In addition to this, the governance is managed and controlled by the government, regulatory body with the support of community. It is also denoted that the corporate governance is value creating for the business to build the significant relationship with the internal and external stakeholders. It is also learned that the ethics and principle of ethical practices are also important for developing the corporate governance with following the duties and obligations with the compliance of rules and policies (GORTON, 2013). In addition to this, the core ethical values such as honesty, loyalty, integrity, pursuit of excellence, accountability and responsibility are also identified important for enhancing the reliability of corporate governance under the Australian corporate governance. In context to the corporate governance, several theories and the principles are also determined with the different perspective of theory developer. With relation to this, the theories such as Utilitarian theory which is concerned to the actions should be taken as what the things are wrong and right. The principles of utility theory are also elaborated with the support of several authors as Bentham and Mill.
Apart from this, the theories are also measured as the supportive approach for shaping of these theories towards corporate governance. In relation to this, I understand the stakeholder theory in which it is known that the management of organization should include the interest of stakeholders as shareholders, communities, customers, employees and suppliers so that the governance can also be implicit in regulatory manner (Du Plessis et. al, 2018). I also learned the institutional theory, stewardship theory, entity maximization and sustainability model and these theories are concerned to the governance scope, policy and practice. I also assess the legal definition of the corporate governance which consist the protection rules; internal effective monitoring and it also ensures the significant allocation of resources so that the desired objectives can be attained in productive manner (Lee, 2018). In reference to the case study of Australian Wheat Board, the corporate governance is also applicable to as the case is inclined to the poor governance, weak decision making and mismanagement of priorities while pursuing with the business operations. I also found the key governance issues such as level of delegation, reporting regimes, not following the appropriate policies and not handling the complaint of customers and stakeholders in appropriate manner.
From the analysis of case study and the assessment, it was stated that the management of relationship is one of the crucial aspect for the business entity and another party to maintain the long term relationship with its stakeholders. From the evaluation of managing the relationship, I have learnt the law of contract and the managing contract with its essential characteristics of agreement between two or more parties (Hay et. al, 2017). Along with this, the contract related information is also attained with the requirement of offer while engaging into a contract. In context of the examples of nature of the offer is also acclaimed as Pharmaceutical Society of GB v Boots Cash Chemist Carlill v Carbolic Smokeball and Harvey v Facey. The nature of acceptance is also identified as it contains the request for information, counter offer and an effort to impose the conditions over counter party (Mayorga, 2013). The case related to the acceptance can be learned as Felthouse v Bindley and Masters v Cameron case. On the other hand, other requirements of a valid contract are also assessed so that the legal relationship can be maintained for long time. In relation to this, it is known about the requirements as intention to create legal relation and the practical evidences are as Balfour v Balfour and Carlill v Carbolic Smokeball. Along with this, it is also identified that the consideration is also valuable while coming into an agreement and it is also determined that the agreement is a formal contract in between the two parties. In order to carry out the rules and regulations of a contract, agreement also enforces to the engaged party to come into the contract and act according to the conditions of a contract (PWC, 2018). I also got the information in relation to the capacity of parties as it is also known that many parties are limited in concern to the public policy, nature or corporation and the protection of business for minors, insane and influence under the void contract implication.
I also recognized the terms of capable enforcement as the terms can be implied or expressed and warranties or conditions. In context to the contract enforcement, the cases have replicated as Tramways Advertising Pty Ltd v Luna Park (NSW) Ltd, Nordenfelt v Maxim Nordenfelt Guns and Ammunition and Thornton v Shoe Lane Parking. On the other hand, the legality aspect of contract is also understood as the enforcement in the contract with Australian Wheat Board might not be applied if the contract is not performing the characteristics of a legal and valid contract. As in this case study, it is reviewed that the Coles Commission paid the bribe to Iraqi government by the Alia, a Jordanian trucking Company. The bribe is not the legal way to protect or perform the conditions of this contract or agreement in between the UN wheat supply contractor and foods for oil agreement (Australianbusiness, 2014). Moreover, I also get introduces with the duress, undue influence and unconscionable conduct which is pertained with the physical threat, emotional pressure and taking the benefits of relationship with the external parties.
I also got familiar with the kind of remedies for managing the contract illegality and non- performance of contract conditions in whit it is also found out that the common formal court is a solution and the alternative dispute resolution is also a remedy for resolution of a dispute in between the two or more parties. I also learn about the system of Australian tribunals Victorian Civil and Administrative Tribunal and Dispute Settlement Centre Victoria so the contract can be performed accordingly. In extent to this, I also identified the difference in between the employee and independent contractor. With reference to the case of American Wheat counsel, it was also helpful for me to understand the implications of Corporation Act 2001 which obliged the director of Company to perform the job in faith and best interest of Company (Austrade, 2018). In relation to the Corporation Act 2001, the applicability of employee and employer are also demonstrated with the common law and statutory laws in the Australian legal compliance.
In context to this, the risk management portfolio also introduces about the supplying goods and services under the competition and consumer act. Furthermore, this unit was also supportive which gave me knowledge about the insurance and its different types as indemnity, life, property, fire and theft, income replacement and public liability. With this the insurance law principles are assessed in the cases as Australian Associated Motor Insurers v Ellis and Ellis and Orb Holdings v Lombard General insurance. In context to managing the relationship in between the legal portfolio, I also learnt the risk management strategies so the relationship can be maintained through resolving the conflicts (Capi?ski and Kopp, 2014). I got familiar with the strategies such as written contracts, disclaimers, exclusion of liability, dispute resolution process and the policies, procedures so that the agreement can be settled in between the parties and the relationship can be improved in satisfactory manner.
In relation to risk management portfolio, I learnt about the managing obligations in the consideration of contract so that the law can be implied in a contract settlement. In relation to the assessment, I also found that the tort is an act of civil wrong which might be resulted into the reason of issue and suffer for losses to the claimant that directly resulted into the legal liability. It is also learnt that the tort is occurred when all the negligence are considered wrong while all the acts have been done with the intension. I also found that the civil wrong takes place in the absence of a legal contract in between the two parties. Along with this, the essentials of tort laws are also determined as trespass, assault or defamation. In this portfolio, I also learnt about the foundation of law of tort in the regulatory body (Baker and Filbeck, 2013). In relation to this, the two types of laws are determined as common law cases and the statute law cases in which most of actions per se tort covers the boundaries with the local authority by law, defamation act, assault legislation and trespass to land.
Along with this, I also got familiar with the negligence and it is also understood the limitations of the negligence in which the loss can be covered as social changes case, participation in dangerous activities and financial and funding issues. Apart from this, I also knew about the defamation which is defined as the action of ruining the reputation of other people in the market. At the same time, Defamation Act 2005 is also revealed in this assessment which embodied to abolish the distinction, to remove the exemplary damages. In addition to this, the negligence is also learnt in the management of obligation aspect as negligence is determined as the careless cause which is about to harming the others by mental, physical and financial aspect. In context to this, the salient features are also known as the nature of hazard with the knowledge of defendant along with the preventive action and vulnerability.
The obvious risk related to the negligence, the cases are as Fallas v Mourlas case. About the public policy aspect the case is also excursed as Graham Barclay Oysters v Ryan and Sullivan v Moody. Moreover, I also understand about the breach of the duty by any party and do not want to perform the act as per the contract but the statutory changes are also applicable to support the victim behind not performing the task due to the seriousness of injury, obvious risk, common practices and the rules and the codes. In relation to this, the cases are as Scott v CAL Number 14 t/as Tandara Motor Inn 2009 (McKendrick, 2014). Under the statutory limit of personal injury to claim for the economic loss, I found that there should be 5% permanent for physical and 10% for psychiatric injury. On the other hand, I also got familiar with the obligation which is not related to the tort such as privacy and it is treated under the privacy act 1988 and Information privacy act 2000. I also found that the misleading activities for theft of information is increasing widely so these types of risk can be managed by training, educating and the implementation of policies to control and secure the private information. Further, this portfolio is also supportive for me to provide information about the discrimination so as to Equal Opportunities Act 2010 and Racial Discrimination Act 2002 is also investigated.
In relation to the future portfolio, I found the information related to the different types of risk that might occur in near future and the performance of company can be distorted. In context to this, I also determined that the risk might occur in the different types as project risk and the business risks. I assessed that the project risk might be adverse for the business to carry out the operational activities of business in the case study as American wheat and coal commission with reference to the case study. From the case study analysis, I also got familiar with the risks such as planning issues, project scheduling challenges, quality issue, budget issues and risk related to the resource for performing the task of company. In addition to this, I also understood the business related risk such as market risk, strategic risk, revenue, management and financial risk might occurs in the future operations of business. In context to the strategic risk, the bribe given company as Coles Commission Company and the Alia which is a Jordan based company (Knapp et. al, 2016). I also found the strategic risk that might affect the companies in the case of American wheat board as the impact on the business strategy execution, if the Coles commission wants to expand the business in diverse market than the happened cases can distort the business strategy for the market development and the reputation related risk might also occur along with the issue of compliance or regulations.
I also found out the expansion strategies as new branches, mergers, franchise and the joint ventures. In addition to this, I also understand the characteristics and the nature of all the business expansion strategies in another market. In addition to this, the Australian national laws are also introduced as Patents Act 1990, Copyright Act 1968, Designs Act 2003, and Trade Marks Act 1995 in which the usefulness of patents copyrights and patents are also introduced in –depth manner (Baker and Filbeck, 2013).
Over the analysis of this risk management portfolio, it can be said that it is relatively important for exploring the knowledge with respect to the legal environment and compliance, managing the relationship in a contract, managing the obligations and future proofing in which the future risk with related to the case of American wheat board is elaborated and the act in the Australian government for doing business are also understood
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Capi?ski, M. and Kopp, E. (2014). Portfolio Theory and Risk Management. London: Cambridge University Press.
Du Plessis, J. J., Hargovan, A., & Harris, J. (2018). Principles of contemporary corporate governance. Cambridge University Press.
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Lee, J. (2018). Former AWB Chairman Trevor Flugge banned for five years over oil-for-food scandal. Retrieved from https://www.smh.com.au/business/former-awb-chairman-trevor-flugge-banned-for-five-years-over-oilforfood-scandal-20170410-gvhisp.html
Mayorga, D. (2013). Managing continuous disclosure: Australian evidence. Accounting, Auditing & Accountability Journal, 26(7), 1135-1169.
McKendrick, E. (2014). Contract law: text, cases, and materials. UK: Oxford University Press.
PWC, (2018). Regulatory Risk Management. Retrieved from: https://www.pwc.com.au/risk-controls/regulatory-risk-mgt.html
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