Corporate Governance for Telstra Communication | Report

• To discuss the legal framework and set the policies for corporate governance
• To delineate the responsibilities of the stakeholders in order to maintain good organizational practice
• To monitor the organizational practice in order to ensure that the policies are followed appropriately

In order to build the organizational policies, directors need to gather information regarding the legal frameworks and other market trends. The decisions taken by the directors should comply with the legal frameworks in order to avoid uncertainty (Xu, et al., 2015). Moreover, the directors should discuss the ways in which the policies should be implemented. However, it is the sole responsibility of the CEOs to implement the policy. The directors will monitor whether the CEOs are complying with the organizational policies or not. Here, the role of business ethics is unavoidable (Miglani, et al., 2015). The directors should consider the ethical guideline in order to improve corporate governance of the organization.

Responsibilities of CEOs

• To implement the stratifies set by the board of directors
• To help the directors to fulfill their goals
• To lead the workforce of the organization with appropriate leadership in order to engage good corporate governance

The CEOs are solely responsible to implement the organizational strategies by following the corporate governance framework set by the directors. Here, the activities of the CEOs should be devoted for achieving overall organizational objectives (Beekes, et al., 2015). CEOs are not responsible for setting corporate governance guideline. However, CEOs should not avoid their responsibility to dodge difficult situation. According to the previous case studies, both CEOs and directors should maintain good communication in order to monitor activities of each other (Miglani, et al., 2015). In this manner, no one will be able to deny responsibility.

Key issues of the recommendations

In this competitive era, organizations are paying close attention to the corporate governance in order to implement efficient organizational policies and procedures. It is the sole responsibility of company’s board of directors to implement good organizational practice. The CEOs are directly liable for implementing those policies (Appuhami & Bhuyan, 2015). However, the CEOs sometimes avoid their responsibilities for which the change of uncertainty increases. For example, the strategies framed by the board of directors need to be maintain by different stakeholders (Cheshire, et al., 2011). However, due to lack of responsibility allocation, most of the multinational organizations fail to maintain the basic guideline.

Apart from that, CEOs manipulate the overall information while delivering it to the internal and external stakeholders. For example, in order to improve organizational performance, it is highly important to share organizational information with the stakeholders (Jia, 2014). However, CEOs can manipulate this information for their personal benefit. It not only harms organizational profitability, but also affects reputations of the organization in negative manner. The organizations listed to the Australian Stock Exchange need to maintain good practice in order to attract the investors (Jia, 2014). It helps to reduce the cost of capital. On the other hand, if an organization avoid corporate governance, then it will be difficult for the organization to attract the stakeholders.

According to the recommendations, board of directors of Telstra Communication should communicate with the CEOs in order to monitor whether they are complying with the set of policies or not. In majority cases, issues occur due to lack of supervision (Adrian, et al., 2013). Therefore, communication is the best way in which the CEOs can raise their issues regarding the set of policies set by the directors. On the other hand, directors will be able to handle any certain change in business.

Recommendations

In order to avoid issues with corporate governance, board of director of the organization should communicate with the CEOs of the company. In this manner, it will be possible for the company to maintain good corporate governance within the organization. According to the case study, the board of directors is denying responsibilities, as they are not responsible for implementing strategies. However, the board of directors should ensure that CEOs are not taking the policies casually.

Conclusion

While concluding, it can be said that corporate governance is a set of policies created by the board of director of an organization. These policies help to maintain good organizational practice, which attracts the stakeholders such as customers and investors. In other words, corporate governance helps to maintain business sustainability in competitive market. This assignment shows that CEOs and directors have different responsibilities to achieve overall organizational objective.

Introduction

The purpose of this report is to emphasize the decision-making mode of the investors. Nowadays, investors are not considering the good corporate governance while taking decision. Therefore, organizations with good corporate governance practice are facing difficulties to gain competitive advantage (Appuhami & Bhuyan, 2015). This assignment will consist of the process in which investors can get better return. In order to gain good return, investors should consider the corporate government practices rather than the other elements.

Investment models of investors

Nowadays, investors are not considering the corporate governance while making investment decision. The traditional decision making models were focusing on the organizational practices. However, currently, the investors are focusing on the global presence. Nowadays, organizations are publishing manipulated information in the financial report (Kathy Rao, et al., 2012). Therefore, it attracts the consumers and other stakeholders in an effective manner. However, the company can face difficulties in long run for this unethical practice. Investors are showing their interest to those companies in order to gain huge return within short time span. In order to take final decision, investors evaluate the market demand of the product or service that the company is offering (Psaros & Seamer, 2015). Apart from that, investors go through the forecasted financial report in order to understand the financial viability of the organization. However, these are not sufficient to ensure long-term return. The investors should have adequate knowledge regarding whether the organization is performing the activities in reality or just portraying the same for recognition (Lim, 2011). Here, the importance of corporate governance occurs. If the organization maintain good corporate governance practices, then it will be not possible for the company to adopt unethical practices.

Importance of good corporate governance

The aim of the investors is to identify an organization and invest a certain amount in order to get high return. Now, the investors are looking forward to gain short-term benefits from the investments. Therefore, they are not considering corporate governance while taking final decision of investment (Heenetigala, et al., 2014). Corporate governance helps an organization to implement the policies and procedures for conducting ethical business practice. Nowadays, organizations are conducting unethical business practices due to low corporate governance policies. The directors are not liable to monitor the activities of the CEOs and therefore, proper guideline is not being followed (Xu, et al., 2015). However, it increases risk factors for the company, because in long-term sustainability, it is important to perform good corporate responsibilities.

Good corporate governance helps to implement effective policies and procedures in which the organization will be able to monitor activities of each stakeholder. According to the case studies, the majority of the companies are facing issues due to lack of communication between directors and CEOs. Therefore, it is highly important to bring change to the law. In this change, the directors should be held responsible for any type of unethical activities within the organization (Miglani, et al., 2015). The major manipulation, which an organization does, is providing hypothetical social activities with the stakeholders. However, this kind of practice only has short-term impact on profitability. Investors should investigate that whether the company is following proper corporate governance or not (Appuhami & Bhuyan, 2015). Following are the benefits of corporate governance have been discussed.

Shareholder recognition: In order to maintain stock price of an organization, it is highly important to maintain good relationship with the shareholders. Therefore, it is highly important to maintain good relationship with the small shareholders and provide them all necessary information regarding organizational activities and achievement (Beekes, et al., 2015). Majority of the organization neglect the small shareholders and therefore, stock price of the company get affected. In good corporate governance, an organization communicates with all shareholders through general meeting. Therefore, it helps to increase transparency between the company and the shareholders.

Ethical behavior: With effective corporate governance, it is possible for an organization to build good relationship with the internal stakeholders such as employees and investors (Adrian, et al., 2013). For an example, if an organization is abusing outsourced employees, then it will be difficult for the company to improve employee retention (Appuhami & Bhuyan, 2015). However, good corporate governance will allow the organization to set cohesive policies for the employees. It will improve organizational profitability along with return for the investors.

Recommendations

In order to ensure high and sustainable return, investors should consider corporate governance rather than the short-term profit of an organization. In order to improve the decision-making model, the investors should pay close attention to the policies of the organization in primary stage. Apart from that, the investors should identify weather the organization is complying with the set of policies. In this manner, the investor will be able to understand that weather the company is conducting ethical business or not. Nowadays, it is highly important to perform corporate social activities in order to maintain business sustainability. However, increasing trend of unethical business practice prevents the organizations from maintaining sustainable profit. Therefore, the investors should go through the social activities conducted by the organization along with its impact among the community they serve. In this manner, the investors will be able understand the extent in which the organization value corporate governance.

Conclusion

After going through the decision-making model of the investors, it can be said that investors are not considering corporate governance while taking final decision. The reason behind this approach is to gain short-term benefits from the business model. The organizations are getting stakeholders’ attention by spreading manipulated organizational information, which is unethical. In good corporate governance, an organization can monitor activities of the internal stakeholders and therefore, reducing unethical business practice becomes possible. On the other hand, it also helps the investors to ensure long-term return from the business model.

Bibliography

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