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CGRM4000 Corporate Governance, Sustainability and Ethics Case Study Sample

Your Task

You are required to write a report to a corporate board summarising your views on corporate governance, sustainability and risk management practices.

Assessment Description

• On Monday of Week 10 at 9 am, you will get access to a case study on MyKBS under the assessments tab. This document will have all the necessary case facts and the specific questions which you are required to answer for this assessment.

• This assessment examines two learning objectives:

• LO4: Analyse the role of the board in the assessment of strategy and risk and the way in which this expertise can be better utilized.

• LO5: Analyse the sustainability initiatives practised within organisations and determine their effectiveness in meeting corporate and ethical objectives.

Assessment Instructions

• You are required to prepare a report and submit it via Turnitin via MyKBS.

• You should adhere to KBS’s referencing and Academic integrity requirements.

• Please refer to the assessment marking guide to assist you in completing all the assessment criteria.



Corporate governance pertains to the structure of the organization that helps in defining the rules, system, as well as process through which the authority is implemented with the company. Good corporate governance ensures that the stakeholder’s interests are properly balanced and this assists in attaining the organizational objectives (Barman and White 2014). For Assignment Help, It pertains to the process that enables identification, evaluation and the control of the threats that might impact the return of the capital investment and total earnings. The current report aims to discuss the implementation of corporate governance for Focus Logistics Pty Ltd. The report discusses about the importance of good corporate governance followed by the importance of the maintenance of sustainability report. Lastly, it deals regarding the practices of sound risk management for Future Logistics.

1. Good corporate Governance practices

For a large private company such as Focus Logistics, it is imperative to have sound corporate governance as it is about to transform into a listed company and comprises of different stakeholders (Burke and Tomlinson 2016). Hence, it needs to ensure that the governance is intact which would allow better conduct and ethical practices.

The importance of good corporate governance for Focus Logistics is as follows:

Preservation of the stakeholder’s confidence – If the stakeholders lack confidence then it might distract the entire goal of the organization. As noted from the discussion, Focus needs to expand and hence looking forward to the expansion plans. The investors are concerned regarding the proper governance structure and hence are a cause of concern. Thereby, for gaining the maximum support it is important for Focus to have a sound corporate governance system to attain success (Burke and Tomlinson 2016). Once the investors find sound corporate governance, the same can provide company with social, as well as emotional support.

Foundation for high performance - The attainment of sustainable success needs input, as well as support from all sphere of the organization. The Board by way of strong corporate governance practices provides a strong framework for the process of planning, implementation and evaluation of performance without this foundation it becomes difficult for the attainment of the goals (ASX 2020). Attainment of the best performance, as well as result within the present capacity should be the sole aim of the organization. Good corporate governance should support the management and staff to the best of their ability

Ensuring organization is properly placed to change in the external environment - Business operates in a vulnerable situation and with the aid of technology there has been a major transformation. Good governance ensures that threat of safety is minimized as it leads to transparency and the stakeholders are able to get the proper information and operational structure (Fiolleau and Kaplan 2016). Hence, it frames a proper balance between the policy makers and the body that enforces it. The stakeholders can access the information on different policies and the implementation of the same.

• Four good corporate governance practises are as follows:

It is imperative for a listed company to have a strong and effective board as it will lead to better governance.
Principle 2 - Adequate Board composition

The Board should ensure a balanced number of independent non-executive directors that will challenge the management and make them accountable and even project the best interest of the listed entity and security holders in total instead of the specific security holders (ASX 2020). The board is needed to have a sufficient size because the requirement of the business can be adhered to and the changes can be managed without any hassle. Renewal of board is essential to the performance of the company (Schwartz 2016). To ensure a proper facilitation of the board, investor confidence needs to be promoted. There must be a transparent process for that will reflect transparency in terms of appointment and reappointment of the board. A separate nomination committee can bring high efficiency to the board thereby ensuring better decision making.

As seen from the case of Focus, the management position especially the executive position is occupied by the members and close friends. Hence, appropriate performance review and succession planning is missing. As the board committee is absent the investors are worried about the same. For instance, the candidates for directors must possess the relevant factor comprising of the past performance and skills.

As per the principles of good corporate governance, a separate nomination committee will be an efficient one as it will bring independence, transparency and judgment to the board thereby ensuring enhanced decision making (Stephenson 2016).

Principle 4: Safeguarding the integrity of annual reports

The main responsibility of the listed entity is to have a strong board, separate audit committee and to ensure transparency so that the corporate reporting process can be seen. The role of the audit committee is to ascertain and make recommendations to the board in tune to the entity’s reporting mechanism of the company and internal control mechanism. Investors are depending on the periodic reports so that investment decision can be undertaken (Kowaleswski 2016). This comprises of the director’s report, cash report and the integrated report. It is important for a listed entity to provide disclosure of the matter and ensure integrity of the corporate report.
In lieu to this, Focus logistics can undertake financial delegation, planning and reporting that will enable internal control and hence the integrity and accuracy of financial reporting can be maintained.

Principle 5: Timely and balanced disclosure

It is important for a listed entity to have a written policy for the compliance with the regular disclosure obligations as per the listing rule 3.1. Listing rule 3.1 needs that the listed entity should disclose to ASX regarding any event that might impact the price of the securities. Written policy ensures that proper compliance is done so that every investor must have proper and timely access to the material information regarding the entity that includes the financial position, ownership and the governance (ASX 2020).

Principle 7: Recognition and management of Risk

The main responsibility for the entity’s risk management is with the board having a proper risk committee. It is effective as well as efficient for bringing transparency, focus and judgment of independent nature to ensure that the risk management framework of the entity is intact (ASX 2020). The risk committee framework should be of proper size and independence and the members should have the desired technical knowledge for the proper understanding of the industry in which it operates so that the desired role is discharged with efficiency (Kowaleswski 2016). The main role of the risk committee is to evaluate the performance of the management against the risk management framework that comprises the risk appetite set by the board and evaluation of the material incident such a disturbance in the risk control of the entity.

2. Benefits and challenges of producing a sustainability report


Sustainability reporting is an overview and a complete coverage of the company’s external environment that is caused by the day to day activities. This reporting enables to project the commitment of the company to a sustainable global economy. Sustainability reporting combines the financial and non-financial parameters (Atkins et al 2015). As per the case study, Focus carbon footprints are huge and the lack of sustainability reporting is a major disadvantage. Mr. Rose is aware that banks do not entertain companies that do not have a sustainability plan and target. The value of sustainability reporting is huge as it leads to consideration of the impact on sustainability issues and thereby provides greater transparency of the risk and opportunities that is faced. In this manner, the organizations are able to build trust among the stakeholders and this influences the bottom lines. Reporting sustainability ensures that the company actively supports the employees to remain healthy and the focus is on the prevention. Additionally Focus logistics can even provide individual option for the reintegration process.

Companies are able to create value through sustainability and thereby enhance the returns on capital. This indicates that the operational costs are reduced through the enhanced management of natural-resource. Furthermore, companies are able to reduce the cost by systematic management of the value chain. Additionally, companies are adding value though the improvement of the employee retention and motivation through sustainability activities by increasing the prices or through attainment of better market share. For Focus Logistics, sustainability reporting will aid in better risk management. Stakeholders correlate financial performance with the ESG and this sends a positive signal. The logistic industry provides services near to production and acts as a link between the producers. Such services increases the strength of the company.

Herein, the presence of sustainability reporting will help in attracting investors for Focus Logistics and will help in the bank loan procedure (Atkins et al 2015). Since the bank considers the sustainability plan and report, the same will enable Focus logistics to avail the loan as it will give signal of a responsible company.
However, the sustainability reporting is not free from challenges. Some of the major challenges are:

Absence of universal comparability

The GRI has provided enhanced sustainability reporting by providing the information that every firm must provide on the economic, social and environmental performance. However, such guidelines are followed by 70% of the worlds firms with certain exceptions. A firm that claims a required disclosure is not applicable then the information can be hidden or unavailable. Such exceptions are hard while comparing the sustainability performance of the firm or over a period of time for any company (Atkins et al 2015). Moreover, sustainability report are a major source for sustainability indices the exceptions even limit the indices value.

Deficiency in transparency

Another challenge that arises in sustainability reporting is transparency. Some indicators are easy. For instance, a firm can provide reporting in terms of high local community engagement by considering the operation even when not effective. The auditor can certify only the effectiveness not the programs. Standards and frameworks play a positive role in increasing the quality and decision. But, every reporting framework contains own purpose and rationale and hence, framework can appear to be confusing and conflicting (Atkins et al 2015). Practitioners fails to reconcile such fragmentation and increase the reporting efficiency. Practitioners might be having a fear that material information might be selective revealed to some investors and not to others. In this case, practitioners are challenged to evaluate the credibility and significance of the various ratings.

3. Benefits and challenges of sound risk management practices for Focus Logistics

Forecasts Probable Issues

One of the major advantages of risk management is to change the culture of the business entity. Companies that focus on the risk management concept is more proactive in comparison to the companies that are reactive. Risk management influences the companies to ensure a sharp look because of the business process and then deciding what can go wrong (Murphy 2015). Another major benefit for the Focus logistics would be that it would have lesser number of disruptions. This would helps in tackling the issue and taking care of the issue at an early stage. The proactive approach is very beneficial because it will help companies to identify the failed task at an early stage. Such continuous feedback would allow the company to decide whether investment should be done in a failed project or the money would be gone for bad.

Avoiding dangerous events

Risk management will help Focus Logistics to prepare the company for all kind of shocks. With a proper risk management the company will be able to predict and apprehend the shocks that impact the daily operations of the firm (Kaveh et al, 2014). Moreover, it also try to focus on the events that are catastrophic in nature. Such events tend to have a low occurrence probability. However, if they happen then the company have the means and the resources to deal with them. Such events are termed as black swan events. This will aid Focus logistics as it is transforming into a listed company and hence risk management would be of utmost importance.

However the risk management process is not free from challenges. If the company has a deficit in terms of decision making then the risk management might not happen appropriately. When team is not incentivized properly then it might lead to improper decision making that might hamper the risk management process. For instance at Focus, the manager might come to a different conclusion but the executive in charge might take a different decision.


The aim of the report was to reflect upon the practises of corporate governance at Focus Logistics. The report gives an insight into the operations of the company and the practises followed by it. There are few shortfalls of the company which the company should correct as it is about to be listed. Focus Logistics should have a sound corporate governance policy that will enable to gain the investors confidence followed by a proper suitability report. This would promote transparency and help the company in attaining the desired result. Moreover, sustainability reporting will help the company to have a positive front in the bank’s book to avail the loan. Lastly, the risk sound risk management will help in undertaking valid decision that will ensure a proper safeguard to the company.


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