Company Characteristics Compliance With ASX-Myassignmenthelp.Com

Question: Discuss About The Company Characteristics Compliance With ASX? Answer: Introduction Corporate Governance is regarded as the set of framework of rules, regulations, systems and processes within which the authority exercises and controls the entities. The purpose of corporate governance is to persuade how the objectives of the companies are achieved and set. It also focuses on how the risk of a company are assessed and controlled. The structures and practices of corporate governance play a significant role in establishing the cost of capital in global capital market (Evans, Carlon and Holland 2016). The ASX corporate governance council encourages the companies to use the guidance for examining the practices and to verify what will benefit the companies. The principles provide an outline for considering the unlisted companies of Australia. Corporate Governance sets up policies for itself. It is a way of governing the employees of a company. The aim of corporate governance is to increase the accountability of the company and ignore problems and disasters before it occurs. Corporate governance is significant as it lays down the framework for creating a long-term trust between the companies and the external providers of capital (H?eb?ek et al. 2014) Corporate governance also helps in improving the strategies by making directors independent who are experienced. It diminishes the monitoring and managing risk that a firm goes through globally. Corporate governance also limits the liability of the management and the directors by expressing the process of decision-making. Good governance is essential as it strengthens and boosts up the confidence by ensuring the commitment of the company to higher profits and growth. The Principles and Recommendations are set out to recommend the concept of corporate governance that practices for the listed companies on the ASX. These companies are said to have achieved good governance results that meets the reasonable anticipation of the maximum number of investors in most of the situations. They are structured to promote the basic principles (Shimeld, Williams and Shimeld 2017). Structuring the board to add value, laying down proper foundation for the management, acting ethically, making balanced disclosure and recognizing and managing the risk occurring in the companies. The Council recognizes that different companies legitimately adopts and follows various kinds of government practices. Especially on the factors that consists of the history, size, complexity and the corporate culture. However, due to these factors or reasons, the recommendations and principles are not necessary and they do not look for to stipulate the corporate governance practices that the listed companies should adopt. Therefore, the principles are structured in two phases. A proper framework of governance represents framework that can be applied to various kind of unlisted entities not considering the level of complexity or size of it. In the second phase, governance evaluates that kind, which are more significant to complex and larger entities specially the ones that prepare for future listings. The origin of the principles and recommendations is the if not, why not approach. This governance practices listed companies to approve a matter or scheme for the board of directors, the head over viewing the legal responsibility for managing the business and to make sure that the companies have suitable governance arrangements (Hay, Stewart and Botica Redmayne 2017). According to the recommendations and principles, if the board of a listed company believes that the recommendation of a Council may not be appropriate to the particular events, it is not bound to adopt. However, this explains the reason as to why it did not adopt the recommendation of if not, why not approach. Due to this, the market gets information about the companys governance so that it can arrange investors that can factor the information into their decision, security holders and stakeholders that can have a discussion with the board and management on governance issues and the security holders who can factor that i nformation into their decision as to how to vote on particular resolutions. Therefore, the approach of if not, why not is fundamental to the procedure of the principles and recommendations (Lama and Anderson 2015). The AXS Corporate Governance Council needs to continue reviewing the principles and recommendations to ensure that they remain pertinent, takes into account the local and international developments, and choose to reflect it in the best international practice (Klettner, Clarke and Boersma 2014). Investors and companies are persuaded to offer feedback about monitoring the completion and collision of the recommendations to the ASX corporate governance council to the member bodies (Lama 2014). The ASX corporate governance will still review the impact of these recommendations and principles by examining the disclosures made in the annual reports and deliberation of the opinion. ASX organized the Corporate Governance Council in August, 2002. In this scenario, the Council had brought together a large range of industry groups and business shareholders. Each of them generally offers their individual opinions and perspectives on the issues of governance. This method started operating the charter thst was adopted in November, 2002. The basic or essential role of the Council is to form and develop the issue principles that are based on the recommendations of the corporate governance practices that were adopted by the listed companies of ASX (Dumay 2017). The purpose of the recommendations is to promote the confidence of the investors and to assist the listed companies to meet the expectations of the stakeholders to their governance. The listed ASX companies needed to benchmark their corporate practices against the recommendations of the Council. The listed companies have the flexibility to adopt the alternate corporate governance practices only if the board agrees those to be appropriate in those situations. The present edition of the Councils corporate governance principles and recommendations was released on March 27, 2014. This version came into force and affected the list of companies on July 1, 2014. The Listing Rules provide the interests of the listed companies and investors, both of whom have an essential interest in maintaining consistent reputation of the market in ASX listed securities and ensure that there are efficient facilities for capital rising. The connection between ASX and listed that an entity should gratify the minimum standards of quality and size and must disclose relevant information before it is submitted to the list. Secondly, there must be enough interest of the investor in an entity and securities should be exhibited they are quoted (Kent et al. 2016). Thirdly, securities must be issued in situations, which are fair to the existing security holders. Fourthly, disclosure must be made on time since that will have effect on the value of the entitys security. Information are generally disclosed in order to enable investors for assessing an entitys corporate governance practices. Disclosure is significant since reporting about the information is widely viewed as the most efficient measure that regulates and encourages better corporate governance. By this way, the market receives all the information needed. Investors and markets make investment decisions based on the provided information. The market can operate properly and diligently when they have access to the required and sufficient information to assess the governance properly. It helps them to ascertain the degree according to which companies reply to the needs of the shareholders (Abraham, Marston and Jones 2015). It also discloses and shows the quality of the future cash flows. Therefore, a listed company should have a written policy for conforming to the continuous disclosure and obligations under the Listing Rules. The entity must disclose the policies. This helps in the improvement of the corporate governance. Listing Rules discloses information and makes a company aware of the information. ASX does not monitor the corporate social responsibility. It should be delegated to ASX by amending the list of governing principles. Corporate governance contributes to the long term success and value of unlisted companies. It is specifically important for the unlisted companies. ASX should amend the list of principles so that shareholders can introduce a suitable constitutional framework for the company (Corkery, Mikalsen and Allan 2017). According to the principles, every company must have an effective board that is responsible for long term success of the company. The size and composition of the board must reflect the activities of the company. Enough duties need to be discharged and supplied regularly with suitable information. Sufficient remuneration should be present to attract and motivate employees. As per the principles, the board will be liable for the oversight of risk and should maintain a sound system of internal control to secure the shareholders investment and the ass ets of the company. Every director of the company should receive induction on joining the board and must be updated regularly to refresh their knowledge and skills (Golden 2014). Board committees must be set up to discharge the duties. Therefore, ASX must amend the list of these governance principles to maintain the governing process. Investors of an externally managed listed entity invest based on the expertise of the management. The principles are applicable to ASX listed companies. They can also be applicable to non-listed public companies. The non-listed entities follow the principles since it will benefit individual contribution made by the industry associations and corporate governance experts. It is essential for them to follow the principles and recommendations since it will be help in the growth and development of the business. Therefore, the eight core principles should be applicable to the unlisted public entities. The main principles represent a sound framework for considering by the Australian companies. However, not all the principles may be applicable for some of the companies. Corporate governance has become very effective for the existing companies. There are plenty of corporate government structures that are available globally. The environment in which companies operate also changes because of the principles. The effectiveness of the corporate governance system cannot be legislated by law. The recommendations made by different committees will help in raising the level of corporate governance in the companies. It will attract the local and global capital. The recommendations and principles form the structure of corporate governance with the high level of alterations in the industrial and economical environment in the country. To improve the effectiveness of corporate governance, disclosures and regulators should be maintained. Regulators and investors must follow the methods provided in t he guidelines on the mentioned corporate governance disclosure requirements. The ASX corporate governance will remain reviewing the force of these recommendations and principles by examining the disclosures made in the annual reports and deliberation of the feedback. References: Abraham, S., Marston, C. and Jones, E., 2015. Disclosure by Indian companies following corporate governance reform.Journal of Applied Accounting Research,16(1), pp.114-137. Corkery, J., Mikalsen, M. and Allan, K., 2017.Corporate social responsibility: The good corporation. Centre for Commercial Law. Dumay, J., Bernardi, C., Guthrie, J. and La Torre, M., 2017. Barriers to implementing the International Integrated Reporting Framework: A contemporary academic perspective.Meditari Accountancy Research,25(4), pp.461-480. Evans, C., Carlon, S. and Holland, K., 2016. Tax knowledge in large corporations: Insights and analysis. Golden, J.B. ed., 2014.The International Capital markets Review. Law Business Research. Hay, D., Stewart, J. and Botica Redmayne, N., 2017. The Role of Auditing in Corporate Governance in Australia and New Zealand: A Research Synthesis.Australian Accounting Review. H?eb?ek, J., Soukopov, J., tencl, M. and Trenz, O., 2014. Integration of economic, environmental, social and corporate governance performance and reporting in enterprises.Acta Universitatis Agriculturae et Silviculturae Mendelianae Brunensis,59(7), pp.157-166. Kent, P., Kent, R.A., Routledge, J. and Stewart, J., 2016. Choice of governance structure and earnings quality.Accounting Research Journal,29(4), pp.372-390. Klettner, A., Clarke, T. and Boersma, M., 2014. The governance of corporate sustainability: Empirical insights into the development, leadership and implementation of responsible business strategy.Journal of Business Ethics,122(1), pp.145-165. Lama, T. and Anderson, W.W., 2015. Company characteristics and compliance with ASX corporate governance principles.Pacific Accounting Review,27(3), pp.373-392. Lama, T., 2014. Board Subcommittees: If Not, Why Not?.Accounting and Finance Research,3(3), p.117. Shimeld, S., Williams, B. and Shimeld, J., 2017. Diversity ASX corporate governance recommendations: a step towards change?.Sustainability Accounting, Management and Policy Journal,8(3), pp.335-357.