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Justify and communicate corporate governance advice and ideas in complex collaborative contexts involving both professionals and non-professionals in the corporate governance field?
Part 1 – Introduction:
Corporate governance is a set of rules, processes, and practices to direct and control the organization systematically (Acharya, et al., 2013). With the complexity of the business organization, corporate governance has been of much importance and with the report, it is an attempt to simplify the matter at the most. A report is to be prepared for the corporate governance activities of an organization. In this report, the specified role, responsibilities and duties of the Board of Directors and CEO would be charted out separately. It would also contain certain recommendations based on the specified role of Directors and CEO. In order to have a better understanding of the topic, it would be illustrated on the relevance of an organization. The subject matter would be analyzed with respect to BHP Billiton Ltd. it is to be noted that the organization is a Melbourne based Anglo-Australian multinational organization dealing in metals, mining and petroleum(Bhpbilliton, 2016).
Difference between the Board of Directors and CEO:
BHP Billiton has strong corporate governance in its organizational structure(Bhpbilliton, 2016). Its interest in governance is in alignment with the regulatory requirements. Accordingly, the organization complies with the existing governance standards followed in Australia, UK and the US(Bhpbilliton, 2016). The corporate governance structure of BHP Billiton clearly indicates the specified roles, duties and responsibilities of the Board of Directors and the CEO of the organization.
Roles, Responsibilities, and Duties of the Board of Directors –
- Directors are appointed by the shareholders at the Annual General Meeting (AGM). They are also very much subjected to election or re-election as decided at the AGM.
- Being a public limited company, BHP Billiton needs to have a minimum of 3 directors. Currently, it has 12 Board of Directors (Bhpbilliton, 2016).
- Directors are responsible for directing organizational activities to its core.
- Directors are appointed based on their qualifications, expertise and skills.
- The duties of Directors are to curb the menace of insolvent trading.
- Directors need to have financial knowledge of the corporation to have an opinion regarding the solvency aspect of the business (Keasey, et al., 2005).
- They also deliver duties regarding care, skill, and diligence.
- The Directors are expected to carry out the business with the utmost diligence and a higher level of responsibility to perform his job accurately (Tricker, 2015).
- The duty to prepare financial statements.
- The Directors need to see that the financial statements are being prepared in context to Australian Accounting Standards (AASB)(Bhpbilliton, 2016).
- Through the Director's report, they disclose additional information as required to be known to the governing body.
- The Directors need to keep a tap on the various information about the operation of the company, especially in those where the company face trouble in paying off its debt(Keasey, et al., 2005).
- The directors also deliver duties in a socially responsible manner for the diversification of stakeholders.
- The Directors are also entrusted to deliver duties related to society as a part of social responsibility.