The paper "Corporate Governance: Federation Centres & Cochlear Ltd" is a great example of an assignment on management. For this principle, companies are expected to determine and disclose both the roles and responsibilities of the board and the management team (Australian Securities Exchange, 2010). Entities should also disclose the processes used in the evaluation of the performance of senior management and also, a provision of the directors’ letters in case of appointment. Federation Centres has adopted this principle and has thus, set out the different roles, responsibilities and delegation attributed to the board members.
In essence, the Board is responsible for planning and overseeing all of the operations of the entire Group for the benefit of all security-holders (Federation Centre, 2014). It is also accountable to all security-holders in regards to its performance. Subsequently, it monitors the performance levels of Group, EC and all senior management. The CEO and Executive Committee are tasked with the responsibility of conducting daily operations and administration of the Group (Federation Centre, 2014). Director education and independent professional advice also form part of the sub-principles. On the other hand, Cochlear Ltd does not specifically provide clear and concise explanations on whether they have adopted the principle.
However, the roles of the Board and Human Resource Committee have been fairly laid out (Cochlear, 2014). For instance, the Board is tasked with the task of formulating remuneration strategies and policies and, also the establishment of the HRC. Principle 2: Structure the Board to Add Value. The principle requires listed companies to develop an effective board in relation to its composition size and commitment in order to allow for the freedom to exercise their duties and roles efficiently (Australian Securities Exchange, 2010). Federation Centres has made efforts to include lots of independent directors to be part of its board as well as widening its composition to three committees: Audit& Risk, Nomination and Remuneration and HR Committees (Federation Centre, 2014).
At no single point in time is the CEO made a chair of any of the committees. Cochlear Ltd has also ensured to develop a nomination committee amongst others like Audit, HRC and Medical Science Committees. The company’ s CEO is only a member of two committees but not a chair of any of them (Cochlear, 2014).
Unlike Federation Centres, Cochlear Ltd has few independent directors in its board. Principle 3: Promote Ethical and Responsible Decision-Making. The principle requires entities to exercise ethical and responsible decision-making process by way of developing codes of conduct, diversity policies that will affect gender board compositions, women employees and senior executives (Australian Securities Exchange, 2010). Federation Centres has ensured to develop and clearly disclose a diversity and inclusion policy, which is meant to attain a diverse and all-inclusive workplace that also depicts different ethnic communities (Federation Centre, 2014).
Diversity policy has also been formulated for the purpose of attaining differences in culture, thoughts, background and experiences of different personnel (Federation Centre, 2014). Subsequently, it has clearly indicated the gender diversity objectives where gender balance in boards, management and senior executives is reflected. Other important efforts made by this organisation include the formulation of such policies as conflicts of interests and related party transactions, securities policies and investor communications to facilitate smooth operations (Federation Centre, 2014).
Australian Institute of Company Directors. 2013. Good governance principles and guidance for not-for-profit organizations. Accessed on March 28, 2015, from www.companydirectors.com.au
Australian Securities Exchange. 2010. Corporate governance principles and recommendations with the 2010 amendments. Print.
Cochlear. 2014. Annual reports. Retrieved on March 28, 2015, from http://www.cochlear.com/wps/wcm/connect/intl/about/investor/annual-reports
Federation Centre. 2014. Annual reports. Retrieved on March 28, 2015, from http://www.federationcentres.com.au/invest/financial-information