Discussion: Issue to be investigated-Corporate governance
Good corporate governance promotes investor confidence. The Australian Securities Exchange (ASX) Corporate Governance Council released its Corporate Governance Principles and Recommendations (the "Principles and Recommendations") in 2003, with the third edition released in 2014. The Council is currently consulting on proposals to update and issue a fourth edition of these Principles and Recommendations. Whilst a number of changes have been put forward, we would like you to consider whether a further change in relation to the composition of an entity's Audit Committee is warranted and whether it will complement Principle 2: Structure the board to be effective and add value.
Specifically, Recommendation 4.1 of Principle 4: Safeguard integrity in corporate reporting requires a board of a listed company to have an audit committee, and identifies the composition of that audit committee including, for example, the number of independent directors. In the USA, it further identifies that at least one of the independent outside directors needs to be a financial expert.
You have recently been appointed as a graduate accountant in a company listed on the Australian Securities Exchange Top 300 (ASX300), and are currently reporting to the Chief Financial Officer (CFO).
The CFO of your assigned company has been asked to consider whether the current board structure and composition is meeting the elements of good corporate governance practices, and whether the gender and cultural/ethnic mix of directors together with the inclusion of a financial expert, such as an accountant, on the Audit Committee would be of benefit to the entity and whether it will enhance financial reporting.
You are to research and provide advice to the CFO on whether the gender and cultural mix together with the inclusion of a financial expert would improve corporate reporting for your entity.
You need to present your findings
1. A business report to update the CFO and the board of directors on your company's current board structure and composition including the audit committee composition specifically relating to gender and cultural diversity and whether Australia should follow the USA requirement of including a financial expert on this committee.
*Compare with Australia
Your business report needs to be concise and informative. In preparing your report, you should investigate a range of issues:
(i) explain your position with support and reference to theories covered in this unit and academic journal articles, and, where relevant, high quality newspaper and professional articles.
COMPANY: DOMINO'S PIZZA ENTERPRISE
700 words (EXCLUDE ALL REFERENCES).