Sample Corporate Governance of Hyper Energy Ltd Assignment

Corporate Governance of Hyper-Energy Ltd Assignment Sample

Instructions

1 Your assignment should address the question(s) and stated learning outcomes by drawing on appropriate learning from Modules 1 to 6 of the subject materials.

2 The assignment is an opportunity to demonstrate your learning, including theory and its practical application. To address the question(s) in this assignment, you are to draw from the core materials in the subject notes, prescribed readings and textbooks, and the resources provided in the Governance Institute Learning Management System but should not be limited by these materials.

3 The assignment counts for 30 per cent of your total mark in this subject.

4 The total word limit for this assignment is 3,000 words. You are cautioned that there are penalties for exceeding the word limit, namely a deduction of marks. There will be no penalty if the assignment exceeds this word limit by 10 per cent or less.

However, for every 500 words or part thereof beyond the stipulated assignment word limit of 3,000 words, ten marks will be deducted from the total of 100 marks available for the assignment. You must declare the total number of words (excluding footnote references) in your assignment.

5 The Assignment Assessment Rubric provides guidance on the criteria and performance indicators against which your submission will be assessed.

6 Answers must contain original thought and ideas. You must acknowledge, through accurate in-text citation and referencing, any idea supported by or contrasted with the work of another author. Note that academic work created by the use of Artificial Intelligence (AI) online software or a contract cheating website service (a website posing as a ‘study support’ or similar service) and claiming it as your own work, will be subjected to an allegation of academic misconduct investigation per the Student Academic Misconduct Policy.

7 The date for submission is Tuesday, 2 May 2023.

Objectives

This assignment is designed to:

- Review your knowledge of the relevant principles of corporate governance as found in the ASX Corporate Governance Council Corporate Governance Principles and Recommendations, 4th edition (Principles and Recommendations) and test your understanding of these principles and how they might be applied to a particular organisation.

- Assess your capacity to identify and analyse the elements of good corporate governance for companies that operate in particular circumstances and are planning to undergo change. In particular, you should identify and apply the following aspects:

− the role of the board and its relationship with management, including how the board can be as effective as possible during a time of change

− risk management issues arising in the particular industry

− the role of the board in ensuring timely disclosure to the market

− the membership and structure of the board, including the composition of the board and the role of any committees that should be established, and

− the role of the board to produce a system of governance which will assist the company to successfully navigate through a period of change.

Solution

Question 1:

1.1 The important functions of the board of Hyper

The board of Hyper performs crucial roles amidst a period of notable transformation, which entails supervising and directing the enterprise's strategic trajectory, mitigating risks, and guaranteeing that the company conducts its operations in a conscientious and principled manner. For Assignment Help, in the specific context of the company's plan to augment its retail operations by incorporating compact 'supermarket-type' stores into its current distribution centres, the board ought to take into account the subsequent factors:

Strategic oversight: The governing body of Hyper assumes a pivotal function in establishing the enterprise's strategic trajectory and overseeing its execution. When contemplating the expansion of its retail stores, the company's management team ought to consider various factors, including but not limited to the magnitude of the market opportunities, the competitive environment, and the company's current capabilities and resources (Nili, 2022, p.92). It is recommended that the board oversee the evaluation of advancements made towards the strategic objectives and goals and make modifications to the strategy as deemed appropriate in light of evolving circumstances (Nguyen, 2021, p.78).

Risk management: As Hyper seeks to broaden its business activities, the board must exercise caution in recognising and regulating the hazards linked to the expansion. The potential risks involved in a business operation may encompass operational risks, financial risks, and reputational risks. Operational risks may arise from supply chain disruptions, while financial risks may stem from price hikes or pricing pressures (Wang et al. 2020, p.36). Reputational risks may manifest in the form of adverse publicity or dissatisfaction among consumers. It is imperative that the board guarantees the implementation of suitable risk management procedures and mechanisms and that these are periodically assessed and revised as required (Nili, 2022, p.79).

Corporate responsibility: Hyper bears the obligation to conduct its operations in an environmentally and socially conscious fashion while considering the concerns of all stakeholders (Dhar et al. 2022). It is recommended that the board of directors take measures to make sure that the company has established suitable policies and procedures to regulate its conduct and that these are efficiently disseminated and executed across all levels of the organisation. This could encompass domains such as ecological sustainability, corporate social responsibility, and moral business conduct (Beji et al. 2021, p.150).

The decision regarding if the board should modify its role to align with the evolving business landscape is contingent upon the unique circumstances of the organisation and the characteristics of the transformations. Nevertheless, certain overarching principles and guidelines may prove beneficial in facilitating this determination.

The ASX Corporate Governance Fundamentals and suggestions can offer a valuable framework for implementing appropriate corporate governance measures. According to Principle Two of the ASX Principles, the composition and responsibilities of the board should be such that it comprises a suitable blend of abilities, expertise, and diversity, thereby facilitating the effective discharge of its duties (Czernkowski et al. 2019, p.720).

In general, it is recommended that the board of Hyper adopt a proactive and strategic stance towards overseeing the company's expansion efforts while simultaneously upholding rigorous standards of corporate governance and adhering to ethical and responsible business practices. Through this approach, it can facilitate the attainment of enduring prosperity and viability of the enterprise, concurrently engendering worth for every concerned party (Cooke et al. 2019, p.78).

Moreover, regarding the potential modification of the board's role to align with the evolving nature of its business, those crucial factors need consideration, and these are discussed widely in the following:

Board compositions: As previously stated, it is imperative that the board of Hyper possesses a suitable combination of competencies, expertise, and inclusivity to facilitate proficient supervision of the organisation's broadened retail endeavours. The implementation of this strategy may necessitate the enlistment of novel directors possessing pertinent proficiency or the formation of consultative committees to furnish direction on particular matters (Merendino & Melville, 2019, p. 75). Given the growing popularity of its retail business, it may be necessary for the board to consider the recruitment of new directors who possess specialised knowledge in retail-related areas, including but not limited to retail design, retailing, and customer experience.

This would aid the board in gaining a more comprehensive comprehension of the challenges and prospects associated with the new enterprise, thereby enabling them to deliver efficient supervision (Fernández-Temprano & Tejerina-Gaite, 2020, p.67). As Hyper allocates resources towards the establishment of new stores and broadens its operational scope, the board will be required to evaluate the financial ramifications of these strategic choices. The task at hand may necessitate the involvement of directors possessing specialised knowledge in the areas of finance, accounting, and handling risks (Merendino & Melville, 2019, p.78). It is imperative for the board to endeavour towards achieving diversity in its composition to facilitate the consideration of a broad spectrum of experiences and points of view. Those mentioned above may encompass diversity with regard to race, ethnic background, age, and professional experience (Fernández-Temprano & Tejerina-Gaite, 2020, p.65).

Board procedures: It is possible that the board will have to make modifications to its procedures and processes to accommodate the alterations in the organisation's operations. As an illustration, it could be imperative to convene meetings more frequently or obtain more comprehensive progress reports from the management regarding the expansion. It is recommended that the board consider implementing novel reporting procedures to guarantee the prompt and pertinent dissemination of information regarding the efficacy of the recently established retail operations (Kao et al. 2019, p.190).

Those, as mentioned earlier, may encompass periodic assessments pertaining to the performance of the store, prevailing sales patterns, and feedback from customers. It is recommended that the board convene more regularly to ensure effective monitoring of the company's advancement and to deliberate on matters pertaining to its expansion (Baker et al. 2020, p.236). As an alternative course of action, the board may institute a subcommittee that would be responsible for supervising the retail operations.

At the same time, this subcommittee would convene independently from the primary board. As previously mentioned, the board must exercise caution in recognising and controlling potential hazards linked to the expansion. In order to guarantee efficient risk management, it may be necessary for the board to institute novel risk management procedures and safeguards and continuously assess the efficacy of said procedures (Kao et al. 2019, p.191).

Ultimately, the board must engage in routine evaluations of its own performance in order to ascertain whether it is furnishing proficient supervision and direction to the organisation. The process may encompass self-evaluations, evaluations by peers, or evaluations conducted by a specialist in corporate governance. The outcomes of these assessments ought to guide any modifications to the board's structure, procedures, or ethos (Baker et al. 2020, p.240).

Board cultures: The board should also cultivate an environment that promotes transparent communication, wherein board members are motivated to inquire, contest presumptions, and express their viewpoints. This measure will facilitate the board's ability to make well-informed decisions regarding expanding retail operations while promoting inclusivity and mutual respect among all board members (Newman & Ford, 2021, p67).

The governing body ought to assume responsibility for its determinations and conduct. This entails guaranteeing that directors possess comprehensive knowledge of the firm's performance and hazards and undertake suitable measures to tackle any emerging challenges. In addition, it encompasses the responsibility of being responsible to investors and other stakeholders and ensuring transparency in the board's decision-making procedures (Bilan et al. 2020, p.70).
The board must put an emphasis on doing the right thing and making choices that are consistent with the company's principles. That means running an honest and open business in accordance with all applicable rules and regulations.

Finally, the board should prioritise improving itself and the firm. If the board is to manage the business's operations and strategy properly, it must frequently assess its own makeup, methods, and culture, making adjustments as necessary (Newman & Ford, 2021, p.198). The process also involves polling shareholders, customers, and workers for their input to determine where the firm is falling short and where it is succeeding.

In conclusion, it can be said that Hyper's board of directors plays a crucial part in the company's overall strategy for growing its retail presence. In order to ensure that Hyper continues to grow in a sustainable and ethical way, the board of directors should adopt an anticipatory and proactive strategy for managing the company's development (Bilan et al. 2020, p.243).

Question 2

2.1 Determination of Hyper’s appropriate mix of skills and diversity:

To determine whether Hyper’s board has the perfect mix of diversity and skills, the following steps can be useful:

Conduct skills audit: The audit of skills is a systematic evaluation of the competencies, knowledge, and proficiencies of every board of directors member. The implementation of a skills matrix can facilitate the identification of both the existing proficiencies and expertise within the board, as well as any potential gaps in these areas (Duchek et al. 2020, p. 389). The skills audit should take into account the proficiencies and knowledge necessary to facilitate the organisation's strategic trajectory, encompassing the foray into the retail sector. The board may consider the proficiency and knowledge of the recently designated managers with prior experience in the retail industry to discern any deficiencies that require attention (Amyar et al. 2019, p. 389).

Assess diversity: The evaluation of diversity entails an examination of the board's makeup with respect to various diversity dimensions, such as race, age, gender, and other related factors. A diversity matrix can be utilised by the board to evaluate the extent of diversity and pinpoint any potential areas that require enhancement (Duchek et al. 2020, p. 390). It is recommended that the board of directors take measures to ensure that it accurately represents the variety of the stakeholder group, including consumers, staff members, and shareholders. This measure will aid in guaranteeing that the decisions made by the board are comprehensive and considerate of the concerns and viewpoints of all parties involved (Gomez & Bernet, 2019, p.390).

Consider the impact of retail growth: The firm’s board should consider the potential effects of retail development on the composition of the board of the firm in relation to diversity and skill. The maximisation can require the board of Hyper’s directors who have skills in retailing, activities of promotions, supply chain systems, and logistics. The firm’s board can also deliberate on the possible influence of the development on the risks of the business and the importance for the directors to have knowledge of risk management (Fountaine et al. 2019, p. 89).

Review board policies: To ensure that the board's policies are consistent with the values of diversity and inclusion, a review should be conducted. The board may want to examine its hiring practices to make sure they are welcoming to all kinds of applicants. To ensure that directors are afforded enough chances for learning and development that foster diversity and inclusion, the board may choose to reevaluate its policy on education and training (Fine et al. 2020, p.70).

Involvement with stakeholders: The process of engaging stakeholders comprises asking for feedback from those with a vested interest in determining the best composition of board members in terms of skills and diversity. The board may consult with employees, customers, and stockholders via surveys, focus groups, and other means of communication (Song et al. 2020, p.1029). Incorporating the viewpoints and perspectives of stakeholders is crucial to inform the board's decision-making process and to ensure that the goals and principles of stakeholders are represented.

At the same time, the board should seek feedback from various stakeholders, including customers, shareholders, and employees, to gain insight into their viewpoints regarding the composition and structure of the board. Conducting an assessment of the board's performance can facilitate the identification of areas that require improvement (Pucheta Martinez and Gallego Alvarez, 2019, p. 89). Additionally, such an assessment can enhance the board's reliability and credibility with participants. The board may consider implementing various methods, such as conducting surveys, organising focus groups, or utilising social media or other communication channels to engage with stakeholders (Song et al. 2020, p.1022).

Regularly evaluate the board performance: The board must engage in consistent evaluations of its own performance in order to ascertain whether it is furnishing proficient supervision and direction to the organisation. The process may entail various methods such as self evaluations, peer assessments, or external evaluations conducted by a specialist in corporate governance. The outcomes of these assessments ought to guide any modifications to the board's structure, procedures, or principles (Gomez & Bernet, 2019, p.27).

Overall, it can be said that by adhering to the prescribed procedures, the governing body of Hyper can guarantee that it possesses a suitable blend of competencies and inclusivity to bolster the organisation's strategic pattern, at the same time it can ensure that the board of Hyper resolutions are comprehensive and considerate of the concerns and viewpoints of all parties involved.

2.2 Steps to deal with challenges:

To ensure that Hyper’s composition and structure allow it to deal appropriately with the challenges it faces, the firm must take the following eight steps:

Review the strategic direction and challenges: It is recommended that the board undertake a comprehensive evaluation of the organisation's strategic orientation and ascertain its obstacles. This will help the board in finding the essential experience and skills required to manage such issues effectively. For example, if a company tends to broaden its activities into the markets, this can be important for the board to appoint new directors who have the expertise in global business and marketing (Benbya et al. 2020, p.37).

Evaluate the board’s structure and composition: The board of Hyper also must evaluate its composition and structure to discover its appropriateness for achieving its organisational objectives. The evaluation should consider the competencies, professional background, and proficiency of every director and assess whether these are congruent with the organisation's strategic orientation and predicaments. Suppose a company is seeking to expand its operations into retailing. In that case, it may be necessary for the board of directors to seek out individuals who possess a background and skill set in retailing or marketing (Wessel et al. 2021, p.128).

Find gaps in experience and skills: After assessing the composition and structure of the board, it is recommended that the board identifies any potential deficiencies in abilities or previous experience. This approach will assist the board in identifying the requisite skills and experience necessary to address the gaps, as mentioned earlier. In the event that a company intends to expand into a new market, it may be necessary for the board to seek out directors who possess relevant experience in the declared market (Grimes et al. 2019, p.840).

Review the appointment procedure: The process of appointing board members is crucial in guaranteeing that the board of directors comprises individuals possessing the necessary expertise and knowledge to tackle the obstacles confronting the organisation effectively. It is recommended that the board undertake a review of its selection process to ascertain its suitability and ability to attract a varied pool of candidates. Job descriptions, hiring practices, and selection criteria all need to be assessed for accuracy (Kulkarni & Anantharama, 2020, p.56).

It is advised that the job title be reviewed carefully to ensure that it accurately represents the qualifications for the position. Reviewing the hiring procedure may help determine whether or not it is successful in drawing applicants from all backgrounds, especially those from underrepresented groups (Benbya et al., 2020, p.204). It is suggested that the criteria for selection be carefully examined to ensure that they are objective, transparent, and well-defined.

Consider the firm’s risk profile: The firm’s board of members should check that it has enough resources to cope with any risks. Involving a risk panel or knowledgeable board members might be helpful here. Depending on the nature of the company's risks, the types of knowledge and experience that should be represented on the board will change. For instance, in a highly regulated business, the board may benefit from having directors with experience in safety and regulatory affairs (Wessel et al. 2021, p.110). A similar requirement for directors skilled in financial risk management may arise if the firm operates in a particularly unstable market.

Review the board committee: To make sure the readiness for the business's strategic direction and difficulties, the board should examine its committee structure. In certain cases, this may call for the dissolution of existing committees and the formation of new ones.

The strategic focus and problems facing the business should inform the board's committee set-up. For instance, if the firm is venturing into retail, the board may have to form a separate committee to manage the retail division (Grimes et al. 2019, p. 192). Similarly, the board can have to form an oversight committee to manage regulatory matters if the firm operates in a highly regulated sector.

Implement a program for director growth: To guarantee that board members get the education and experience they need to do their jobs well, the board should institute a director development programme. Governance, handling risks, and other related courses may be included.

It is possible to increase confidence in directors' abilities and performance by investing in a director development programme. The programme should cater to the board's unique requirements and incorporate formal and casual learning settings (Kulkarni & Anantharama, 2020, p.89). Directors may improve their abilities and expertise by, for instance, participating in conferences, seminars, and workshops.

Regular review and refresh of the board: The board's composition should be evaluated and updated on a regular basis to ensure it continues to serve its function effectively. This may call for the resignation of current board members or the selection of new ones.

The board's continued relevance to the strategic direction and issues facing the organisation may be ensured by periodic reviews and renewals of its membership. Assessing the knowledge, abilities, and experience needed to meet the issues facing the organisation should be part of an open and impartial evaluation process (Benbya et al. 2020, p.89). This might entail the resignation of current board members or the appointment of fresh candidates to fill vacancies.

In conclusion, Hyper will be able to fill its board with directors who have the knowledge, experience, and competence to help the firm overcome the obstacles it confronts. The board will be better able to make choices in line with the business's overall strategy and strengthen the company's position to achieve its goals. Let's go through each stage in further depth.

References