Trainers Assessment Resource FNSACC XXXXXXXXXXVersion 2.1 April XXXXXXXXXXPage 1 of 4 ASSESSMENT 1 – RESEARCH REPORT STUDENT INFORMATION This information is to be handed to each student to outline the...

Report on Corporate Governance –
· Corporate Governance defines the relationship between Management of the Company, Shareholders and Board of directors. The primary objective of Corporate Governance is to protect rights of investors and shareholders of the company. Corporate governance helps in bringing in transparency within the organization and for the auditors and shareholders providing them detailed understanding in respect of business profits and losses and any unusual activity in the organization. Good corporate governance will in time highlight any unethical practices taken place within the organization and timely restructure it to make sure all the practices are ethical within the organization.
· Principles of Corporate Governance written for ASX are as follows –
1. Lay solid foundations for management and oversight
2. Board should add value to the company
3. Decision making should be ethical
4. Integrity should be maintained in financial reporting
5. Make proper disclosure of books of accounts over time
6. Safeguard the interest of shareholders
7. Identify inherent risk to the organization
8. Remuneration should be fair and at arm’s length price
Company 1 – Macquarie Group
· Macquarie group is an investment banking and financial services company. Here, Company is provided with funds to investment as seed capital or a company wherein potential of being a big brand is seen. Here, Responsibility of the company is have a report on the source of funds and utilization of funds. In case any of this is not properly accounted for or reported for the same could put company in a legal punishable offence. It is also very important to look at the utilization of funds to make sure none of the directors or management are directly or indirectly interested or benefited to keep the independence of the organization safe. It should also be kept in mind that authority who brings in the business and the one who does bank dealings are different to make sure everything is documented in efficient manner. Power should not be vested in the hands of a single department.
· Practical application of Corporate governance requirements from relevant sources –
1. Macquarie group website –
a. Identify opportunity and convert the opportunity into business and report the same to the shareholders, community and other legal authorities on timely basis
b. Promote long term profitability at the same time managing various inherent risk to the organization within and outside the organization
c. Meet expectations of stakeholders of good corporate governance as part of our responsibility for them
d. To understand that independent directors have an important role in safeguarding the interest of shareholders and should act in their best interest.
2. per ATO ”Some private groups now have to consider the publication of their tax information as a factor in managing their reputation with stakeholders, customers and the broader Australian community as part of corporate transparency measures”
As per professional associations “Several scholars criticize the closed system approach within agency theory that implies a universal and direct linkage between corporate governance practices and performance and devotes little attention to the distinct context in which companies function”
As per ASC ”Public companies must obtain member approval to provide financial benefits to related parties (such as directors, their spouse and certain other relatives).”
· Internal control procedures followed by Macquarie group are as follows –
1. All the related party transactions should be identified and made sure that they are all compensated at arm’s length price and not above that. This would safeguard conflict of interest of related party.
2. All the decisions in connection with significant transactions with creditors for goods or services or expenses should be made independently.
3. The staff managing funds should not be dedicated with any other responsibility to safeguard delegation or dual responsibility in the hand of same person.
4. If any recommendation is received from board, the same should be reviewed by a staff independently and also should be given for review to a board committee developed for this specific purpose.
5. Anyone who invest in the assets or businesses should be independently reviewed by fund houses and a committee developed for this purpose.
6. Everyone who has specific information in respect of corporate finance and capital markets should themselves away from the trading market.
There is a special report on corporate governance submitted by the company and requirements and measures have been taken to make sure corporate governance is adhered to. Reasonable measures have been taken to ensure corporate governance is been taken care of in the company.
Company 2 – Telstra
Telstra is an Australian telecommunication company that builds and operates telecommunication networks and markets voice, mobile, internet access, pay television and other products and services. Telstra is committed to excellence in corporate governance, transparency and accountability. Company regularly reviews governance arrangements, to reflect developments in market practice, expectations and regulation as appropriate. Company complies with the ASX Corporate governance principles and recommendations.
Practical applications of corporate governance requirements –
1. The primary objective of the board is to monitor and implement T22 Strategy. T22 Strategy is a major transformation in the telecommunication industry and Testra is leading in this industry.
2. T22 is trying to bring in balance in the board in the form of combination between experienced directors and less experienced one but with potential to excel and bring in bigger change in the organization.
3. Company has developed an audit and risk committee to identify the risk within the organization and mitigate the risk with potential as well as pre defined solutions.
4. A separate committee formed to review the remuneration paid to the directors. Any remuneration paid should be in the interest of investors and should be at Arm’s Length price or at the current market price of the resource available in the industry.
5. The objective of the company is to ensure that the goals of the company and the entire is same and it is a right blend between the current culture and the values to work for the same goals and objectives in the ethical manner. We strongly promote ethical working culture within the organization.

Internal control procedures of the company
1. Once the company receives financial statements, it shall take a declaration from the CEO and CFO of the company that the books of accounts are free from material mis-statements. The books of accounts are of true and fair view. In the current financial year no frauds or pilferage has been reported in the organization.
2. The internal control team reviews and identifies any potential risk to the organization in the near future and be ready with a predefined solution to mitigate the risk quickly.
3. Board has decided to undertake internal review of the processes, strategies of the organization over a period of time...