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MBA402 Corporate Governance, Sustainability and Ethics Assignment Sample

Word Count: 2,000 Words (+/-10%)
Weighting: 40 %
Total Marks: 40
Submission: Via Turnitin on MyKBS
Due Date: Monday of Week 13

Your Task

You are required to write a case study report to a corporate board summarizing 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 which is due to be submitted in week 13.

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.

Word Limits for Written Assessments

Submissions that exceed the word limit by more than 10% will cease to be marked from the point at which that limit is exceeded.

Study Assistance for assignment help

Students may seek study assistance from their local Academic Learning Advisor or refer to the resources on the MyKBS Academic Success Centre page. Click here for this information.

MBA402 – Assessment 3 Case Study

Focus Logistics Pty Ltd (Focus) has engaged you as an independent consultant, and they are seeking your advice on several corporate governances, sustainability and risk management issues. You have just returned from a board meeting with Jennifer White (company’s founder and the current Chair), Geena Rose (CEO), Jacob Rose (COO) and David Rose (CFO). You have gathered the following information about this company:


Mrs. White Established Focus Logistics in 1965 in Horsham, Victoria, providing state-widem logistics services to local businesses. The community supported Focus because of Mrs. hite’s slogan “Go Local”. The company grew steadily for the next 30 years and expanded its operations into VIC, NSW, and TAS.

Mrs. White retired from day-to-day operations in 1997 and assumed the role of board’s Chair. Mrs. White’s daughter Geena took on the company reins and, since then, has completely transformed the business. Focus now has 19% of the total market share and is Australia’s fifth-largest private logistics company. Focus has grown from 28 customers in 1970 to 650 customers in 1997 to more than 11,000 customers today (including a few ASX listed companies).

Current plans: expansion

Now, Focus needs additional capital to fund its expansion plans, and Mrs. Rose has met with several potential investors and private equity groups over the last six months. The senior management team has prepared a very impressive prospectus highlighting all of Focus’s recent achievements and a business forecast for the next ten years. However, these investors are concerned that Focus doesn’t have the proper operation and governance structure to justify the additional funding and expansion plans.

Investor concerns:

They have criticized that even though Focus is a large company, the business is still run like a family-owned business with limited oversight over management and a lack of operational controls and reporting. In addition, the various management positions, especially the executive positions, are held by family members and close friends. Therefore, there seems to be a lack of appropriate performance reviews and necessary succession planning. The investors also highlighted that Focus doesn’t have any board committees.

The board unanimously agrees that since they own most of the company, there is no need to spend any money on non-value adding reporting like a sustainability report. The board acknowledges that the company might benefit from some regular reporting and performance reviews. Still, it is concerned about its impact on the family members – after all, trust and patience are the most important traits of a family-run business. Plus, it is the boards view that there is a reason why such reporting is optional and not mandatory at all. Mrs. Rose has already notified these investors that Mrs. White will soon retire from the board, and Mrs. Rose will nominate herself as the next Chair. She believes that the board will benefit immensely if the Chair and the CEO is the same person – that’s because this person will have a lot of knowledge about the company’s operations and, therefore, will be able to question and oversee the management more meticulously.

The potential investors are also apprehensive about the lack of sustainability reporting by this company. Focus’s carbon footprint is enormous – their B-Double trucks alone consume almost a million litters of diesel a year. It is anyone’s guess how much fuel the company consumes in total because, along with its own fleet of trucks, the company also has hundreds of sub-contractors. Mrs. Rose is aware that all national banks oppose supporting a business that does not have a sustainability plan and target.

The last primary concern of these investors is the lack of risk management initiatives at Focus. Recently, Focus has taken on a lot of debt (by using their Victorian fleet as security), and therefore the board must constantly monitor Focus’s exposure to financial risk. The investors acknowledge that even though Focus’s operations were not affected by COVID-19 (because the business is classified as an essential service), Focus needs to prioritise operational risk management and urgently draft a business continuity plan.

Board/Management opinions

Mrs. White completely dismissed the investor’s views on operational risk. She stated, “Trucks are the backbone of Australia and will continue to work round-the-clock – as they have done for the last 55 years. I cannot think of a simpler business – buy a truck, get someone to drive it, and a few days later – the customer settles the account. Involving lawyers and consultants in expensive suits will make matters unnecessarily complicated”.

The company’s COO, Jacob Rose (Mrs. Rose’s 26-year old son), is genuinely concerned about what these potential investors are demanding. He stated, “Corporate governance always slows down the board’s decision-making process and makes running a company unnecessarily complicated, hindering innovation and creativity.

For example, I want to add autonomous vehicles to our fleet, and I am confident that a formal governance structure will delay such adaptation. As long as we aren’t in trouble with the tax office and the corporate watchdog, the board’s only priority should always be on maximizing shareholder returns. Therefore, we shouldn’t be worried about the compliance issues, which are unlikely to get audited. And even if we do get audited, it is better to pay a small fine instead of investing thousands, possibly millions, of dollars in meaningless and endless compliance and “tick-the-box” exercises.

A family-run business should always focus on performance and not so much on conformance. We have to stop this madness”. Jacob is confident that Focus’s legal counsel, Melissa Wright (Jacob’s childhood friend and a current law student), will concur with his views. Unfortunately, Melissa was unable to attend the meeting because she is on extended personal leave.

The company’s CFO, David Rose (Mrs. Rose’s other son), has a different view. He said, “For what’s it’s worth, I can understand where the investors are coming from. However, we are no longer a “local” business. A lot has changed since Nan started this business on her kitchen table, and Uncle Sam was the only truck driver. Today, we have operations across Australia, employ more than 2,000 people – and I am not even counting the 3,000+ contractors we have on our books.

I believe there was a recent ruling whereby businesses like ours have a lot more responsibility of looking after our employees, especially our sub-contractors. When Melissa is back, I’m sure she will be able to shed some light on this. Plus, we should endeavor to go beyond the mandatory requirements. Wouldn’t it be great if our peers recognize us as the pioneers in corporate governance and sustainability practices? After all, we consume a crazy amount of fuel every year, and with climate change being a pressing political topic –
the last thing we want is to be boycotted.

These investors will own 12% of our company and probably get a seat at the board table. So, we have to be careful about making any throwaway comments. We might be a private company, but the business media and journalists are very well aware of our operations and ownership structure. It is impossible to hide when you are this big. In the world of social media and Twitter, information travels much faster than we can imagine”.

Mrs. White concurs with David’s views. She said,

“I want to continue looking after our loyal customers and faithful employees who have supported us all these years. We already do a lot for the community, and it would be great to consolidate all the information about our various programs in one easily accessible location. But I am not sure about preparing these fancy reports which no one is ever going to read. Surely, we can put our money to better use?”.

Towards the end of your meeting, Geena said,

“Honestly, we are just testing the waters with these private investors. We want an accurate company valuation and want to see what’s it like to work with a private equity group. Even though we will go ahead with this equity sale, Focus’s ultimate goal is to be an ASX listed company by the end of next year”.


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

In your report, you must address the following three areas:

1. Discuss at least four good corporate governance practices and the importance of good governance for a large private company such as Focus Logistics that wants to transition into an ASX listed entity. (15 marks) (1,000 to 1,100 words)

2. Summarise the significance, benefits and challenges of producing a sustainability report for Focus Logistics, especially for a business within the logistics industry. (10 marks) (600 – 660 words)

3. Summarise the benefits and challenges of sound risk management practices for Focus Logistics.
(7 marks) (400 – 440 words)

Within the answers to the above three questions, you should refer to:

1. The views of the four people you have recently met (Mrs. White, Mrs. Rose, David and Jacob).
2. Recent news releases relating to best practice corporate governance, sustainability and risk management practices.


Four good corporate governance practices and the importance of good governance for a large private company such as Focus Logistics that wants to transition into an ASX listed entity-

In the given case study lack of proper corporate governance structure is been stated by the investors of the Focus Logistics. For the purpose of improving this structure the company must prioritize good corporate governance practices in order to get listed in the ASX entities by the end of the current year. In essence the board of governance or the corporate governance are the providers of standard rules and regulations for the organizational practices that ensures serving the interest of their investors, stakeholders, customers, employees and rest of the management team responsibly as well as effectively (Wardhana, 2018). Hence it is very important for the company to form an appropriate corporate governance structure. It entails by taking look on the board members, way of approaching governance in organization and who are they as the people. For the best practices board work is incorporated with various aspects and governance could incorporate many different practices. In order to assist the organization or a company to follow good corporate practices some of the suggestions are discussed such as-

Building a Competent Board-

It states that the board must be consist of diversified and independent board members as per the current new focuses. The reason for such is that board have to deal with a lot issue which are complex in nature and sometimes the technical issues are to be faced. Many opinions and suggestion results in quality of decision making around the board table (Crisóstomo, & Girão, 2019). Also, the board consist of majority of independent directors is favoured by the governance experts. The composition of board must be in such a way that it incorporates required skills and abilities to make a sound decision for the company. Further the trust must be implicit among the board directors in order to make productive decisions and strong opinions through the long debates and wrought. In addition to this the board committee, its members and the directors must also practice self- evaluation to identify their weaknesses and strengths. Hence this would help the Focus Logistics to build a competent and effective board committee to serve its investors as well as customers.

Aligning Strategies with Goals

Another important corporate governance practice to be followed by the board is aligning their strategies with the goals of company. Primarily the board must use all its resources to identify the possibilities of risk in the near future. The collective work from the bard will help the company to enhance its profile and risk tolerance capacity. This way the Focus logistics too could enhance its risk management practices and have an eye on the debt taken already. In addition to this the company must also have proper framework as well the control in order to mitigate risk or monitor such risks (Báez-Roa, Puentes-Montañez, & Sosa, 2021). It is one the best practice of corporate governance that board must apply to look at its strategy and risk management for long and short durations.

Being Accountable

There are many scandals that highlights the importance of accountability as the good corporate governance practice to acquire the strong position in the market. There is need for the development of strong board strong and regular checking on them. Further the other important part of such practice toa accurately and transparently report its reporting’s to the investors with adequate checks and balance system. This way the issue of unsatisfied investors for the Focus Logistics regarding the unappropriated corporate governance by board could be minimized. Additionally, the practice for accountability includes decision regarding selection of appropriate board member and offer the compensation adequate to his job without raising any conflict of interest (Arslan, & Alqatan, 2020). It is basically most important to overview the compensation of the board committee.

Having a High Level of Ethics and Integrity

High level of ethics, integrity and honesty must be reflected in the work, speech, relationship within the corporation with peoples by the board nominees. As it is their fiduciary duty to consider all these while presenting the company in front of public or whenever they speak bout or for the organization. The board is the voice of the corporation hence it must take all these ethics and integrity int consideration.
The board must also have a clear-cut policy regarding the conflict of interest and refrain such conflicts through voting system on specific matters of conflict.

These are the practices of corporate governance that must be followed by the board to make its corporate system sounder (Muda, et al 2018). The goals of practicing a good corporate governance or importance of such for the large companies like Focus Logistics and the other companies within the logistics industry must be to protect the interest of management, members and the investors. Also, it ensures the proper recording of company’s books and transactions. Further the other importance’s of the good corporate governance practices are-

• Ensuring the equal treatment among all the shareholders.

• Ensures ethical as well integrate behaviour in the corporate

• Ensures disclosure of each report including financial information to all of its stakeholders transparently.

• Additionally, it ensures the availability of adequate talent and skills among the board to challenge the competitiveness of the management and review their performance and actions.

• Balancing and considering all the obligation of the corporation toward the legal, social, contractual market. Also balancing the interest of shareholders as well as non- shareholders including investors, customers, local community, policy makers, creditors and others.

The benefits from the good corporate practice are boundless and also have potential impact on the board performance. Further it improves the performance of overall corporation, promotes trust factor among both stakeholders as well as shareholders (Chatchawanchanchanakij, Arpornpisal, & Jermsittiparsert, 2019). The corporations which apply and follow such practices move forward in the long run towards the sustainability of the organization. In such way the conflict among the investors of the Focus Logistics could also be solved by building the sound system of governance in the organizations.

The significance, benefits and challenges of producing a sustainability report for Focus Logistics, especially for a business within the logistics industry.


Reduce energy related cost

Under the sustainable reporting the energy and the water cost would be reduced which are the main concern for the manufacturers in the logistics industry. This could also reduce the expenses of the corporation by annual savings, cost reduction for short term plans. Switching to the energy efficient procedures the electrical cost could be reduced on long term basis. Sustainability could further improve the bottom line of the corporation.

Attract new customers as well investors.

Sustainable practices can make the company more marketable in the industry. In current scenario the consumers are environment conscious, and making improvement in your practices to improve environment will attract them (Tsalis, et al 2020). Also, there are some investment banks that invest in only those company that are working under sustainable practices. Such problem is also faced by the Focus Logistics in the case study, which caused difficulty in raising their funds for expansion purpose. Further highlighting your such practices to the suppliers and the consumers will enhance the customer base for company and result in increased sales. The technology and social medio have made easier for the public to criticize the companies that lack in following the sustainable practices, which could distort the company reputation. Hence practicing such sustainability will maintain the portion and the reputation of the company. Further its world help in expansion of business.

Tax benefits

Tax rebates and variety of tax credits are granted to the company who follow such practices by the government. The practical implementation of sustainable development at both federal and state level are benefited from the taxes (Loh, Thomas, & Wang, 2017).

Encourages innovation and boost morale of workforce

Sustainable development requires collective effort of the human resource of organization. When these resources work together the culture of the organization gets promotes and fosters the team work spirits within them. Also, employees work harder when they feel sense of pride for their company. In short it brings the positivity in environment and boost the morale of the employees and encourage them to think creatively. Innovation could be encouraged by the challenges faced by the engineers of such organization such as reducing scraps, recycling etc.

Societal impact

Apart from increasing profitability it also has impact on the reducing of carbon foot prints of the organization in the atmosphere. This would be helpful for the future generation due to availability of fresh air, water and other resources from the environment (Shad, et al, 2019).

The Focus Logistics has enormous carbon foot prints into atmosphere which makes them unattractable from the environment conscious public and investors point of view.


Apart from various benefits from the sustainability practices there are some of the drawbacks of its, which enables the company to perform such practices.

Multiple reporting frameworks

Proper and adequate framework plays essential role by the sustainable development in enhancing decision making and quality of performance. But the multiple frameworks by the sustainable development could appear as conflicting and confusing. Especially when each framework is given with different priorities and different metrics and definitions, they tend to become complicated. Hence practitioners struggle in efficient reporting process.

Volume of ratings and rankings

This further possess difficulty in sustainable reporting as-
• Responding on request which are of no use to company.
• Time consuming
• Credibility is challenged

Multiple target audiences

Report of sustainability is catered among various target audience. It comes as challenge for the practitioners to provide the report in diverse set to its stakeholders (Beira, & Heras-Saizarbitoria, 2020). Disclosing information related to the companies sustainable working among the multiple targeted audience comes as challenge to the company.

The benefits and challenges of sound risk management practices for Focus Logistics.

Risk management enables the company to achieve the desired goals and objectives by putting at place the tool which could direct them towards the success. Evaluation of risks and implementing policies for such within the business plans made for execution makes an effective risk management. This would further be useful for the Focus Logistics to mitigate the risk in the path of their expansion process (El Baz, & Ruel, 2021). There are some benefits as well as challenges of risk management discussed below-


Knowledge of a contingency budget

Risk management enables managers to explore each area of the plan and mitigate the area which over budget the project. They could also identify the amount required for the project to make it occur. Further managers could go through each area of project to see the impact of cost and mange it effectively.

Determining pre-determined responses to problems

Everything is uncertain, maybe the project not goes as per the plans, anything could happen in the middle of the project (Manab, & Aziz, 2019). Hence managers could develop plans for such unfavourable events in the mis of project through effective risk management.

Increase return on investment

Managers can also increase their return on the investment made in project by projecting the unforeseen risks and planning accurately to mitigate such risks. Also, it provided the advantage to the company to reinvest the money or funds that were not being included in the exemplary planning.


Identifying risk

Identifying risks is not an easy task it might serve as challenging. It is next to impossible that the company can get aware of all the future risks. However, the full-on risk analysis by the company may result in time consuming and a complicated process. Hence all the actions associated with the risk identification process may prove to be overwhelming for the project managers as well as the company.

A lack of buy-in

The lack of value for such risk management by the buy in can affect the efficiency of the process. Other may not understand its importance as the top management and co -workers, but the project manager needs the involvement of another buy in in the project (Vincent, N E, Higgs, & Pinsker, 2019).

Cannot precisely predict the future

The process of prediction has no way to occur correctly as predicted, hence no matter how precisely the risk management practice was done there will remain some points or areas of uncertainty within the management. Regarding the future perspective, one could only guess not identify correctly each circumstance.


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