Governance and Fraud
Word Limits: 2,000 words (not including reference list).
Some companies appear to perform well despite not following all of the ‘ASX Corporate Governance Council Principles and Recommendations of Corporate Governance’. You are allocated with two ASX companies (INTERNATIONAL EQUITIES CORPORATION LIMITED - ASX CODE – IEQ & AVEO GROUP - ASX CODE – AOG).
(1) For the year ending 2016 and using the ASX Principles and Recommendations (2014) version, provide response to the followings:
i. Critically evaluate the depth of each company in their adoption of ASX CGC principles and recommendations (2014);
ii. Discuss the link between corporate governance and performance. In your discussion, you are expected to analyse the underlying theoretical underpinning; and
iii. Do you think the adoption of ASX principles and recommendations have made an impact on companies’ performance? Discuss.
(2) For the two companies you are allocated, provide response to the followings:
i. Use a table to summarise the short term and long term salary, board composition/ gender diversity and performance benchmarks of the executive directors over the 5 year period (June 30, 2012 to June 30, 2016).
ii. With reference to your table of summary in 2(i) above, discuss as to whether the performance benchmarks for remuneration are clear and appropriate; and
iii. Discuss as to whether there is a link between gender diversity of boards and performance.
(10 + 10 = 20 marks)
All reports have to be available in the announcements page from ASX.
1 - Access the Announcements at: http://www.asx.com.au/asx/statistics/announcements.do
2 - Type the company ASX three letter code.
3 - Select the year 2016 on the time frame button.
4 - Search for the company's annual report (Ctrl+F and type 'Annual' or 'Report').
• Provide a table of contents (not included in word count) and ensure all questions are clearly labelled.
• Harvard style of referencing to be employed (reference list is not included in word count).
• Written in font size 12 for body writing; headings and block quotes may have different sizes
• Include page numbers
• Line spacing of 1.5 or double spacing
The very good students apart from knowing their subject matter, also had excellent structure in their assignment, very good presentation and layout using tables and/or graphs and saving their words in the narrative for argument and conclusion.
Some students were careless in their presentation with several spelling errors and poor grammar. Referencing by them was generally poor or non-existent, with a few extracting large chunks from the annual reports or the internet with no acknowledgement at all. Headings were rarely used by some and all parts of the assignment were combined in a general discussion. This resulted in a loss of focus and some parts were neglected.
Question 1: The ones who had difficulty did so because they had poor essay answering technique or did not properly read what was asked or did not understand what was required. By way of example too many wasted too many words in their narrative to list all the ASXCG principles and then make comments on the adoption by their selected companies. A better way would have been to show a simple comparative table of the Principles for each company and then a comment on the degree of alignment. A common shortfall was the absence of either, any theoretical discussion and /or, use of suitable empirical references. The students who did well had all parts of the Rubric covered. Some students did not refer to either theory or empirical evidence in answering part 2. Part 3 required an examination of the chosen companies’ performance not other organizations that they wanted to mention. Again, this could have been placed in a table or chart to illustrate.
Question 2: The same comments apply here as for Q1 in relation to the way the layout of the answer was tackled. Many students did not include any simple tables or graphs either summarised or extracted from the annual reports in support of their arguments and conclusions making it very difficult to assess how well, if at all, they had analysed the data being reviewed. Some made assertions as conclusions without evidence to support the argument. Part 1 was particularly conducive to use of tables. Part 2 was generally well handled although supporting evidence was sometimes omitted. Part 3 was an opportunity for your opinion and some students were too brief in simply agreeing or disagreeing with the statement without any justifications or arguments.