Attention in the media has once again focused on corporate governance, that is, how companies are regulated by governments and how they are managed internally.
With reference to corporations registered in Australia, critically discuss whether better governed corporations outperform poorly governed corporations in Australia (Hint: as a starting point, read Treasury Working Paper 2009 - 02 March2009).
Your discussion is expected to include explanation and analysis of
o what is good corporate governance, what mechanisms play a role in corporate governance in Australia and why good corporate governance is relevant for key stakeholders generally
o key financial measures that generally determine the performance of a corporation's governance; with an evaluation of the performance of Australian corporations' boards of directors in the light of these measures
o whether current Australian legal regulation of directors duties is adequate to protect corporate directors
Part B
A continuing debate in corporate governance is whether there is a positive correlation between an 'independent board' (ie a board consisting of a majority of independent directors) and good corporate performance.
Task:
Identify arguments that support the proposal that there is such a positive correlation, and arguments that refute the proposal. Limit your discussion to corporations registered in Australia.
(Hint: as a starting point, read the commentary by Professor Peter Swan reported in Australian Financial Review p6 and Bob Austin p55 31 July 2014).
Your discussion is expected to include explanation and analysis of
o what makes a director an 'independent director' of an Australian corporation,
o the primary role of a board of directors
o what is meant by good corporate performance and how it should be measured (if you have discussed this in Part A you may refer to that discussion