Assignment 2: Introduction: In this report, the appropriate depiction pertaining to the governing body structure, its size, members and board committees information of the board of The Australian retail major, Woolworths Ltd will be presented. Moreover, the way in which the board interacts with the top management leadership and the internal controls of the organization are critically analyzed in this report. It is part from the above, the external auditing, risk management of the company will also be depicted in this report. It is apart from that the corporate governance issue of Woolworths will also be presented in this report. Outlining the research methodology to collect data that will be used for the investigation of the project study: It is for collection of data pertaining to the size, members, board committees and information of the board; an observation must be made from published annual report of the company, So essentially, a secondary data collection techniques needs to be adopted for collecting this data. Actually the annual report of a listed company must provide the detail of board, the size and ven the tenure of the board members. Therefore through an in-depth analysis of the Corporate Governance section of the Annual report of Woolworths , the details as required can be obtained. Moreover, for the purpose of obtaining the communication, leadership styles and the internal controls; the technique of observation of the annual report of the organization and obtaining data through the technique of survey questionnaire must be implemented. The observation of the notes to accounts and auditor statement in the annual report will be done. It is apart from the above technique of observation of annual report to collect the data, the survey questionnaire will be resorted to collect data so as to understand the aspect of leadership styles and the method of communication are done in this particular Australian retail organization. Moreover for analyzing the risk management polices of the company, the external and the internal auditors recruit must be analyzed so as to get a vivid idea of the entire risk management processes that are adopted in Woolworths. The corporate Governance Systems in Woolworths: In order to maintain a strong corporate governance in the company’s operation, Woolworths has appointed board of directors whose main principle objective is to ensure increasing the value of the shareholder of the company and enhance the value of the stakeholders of the company. The different aspects of the governance systems at Woolworths are mentioned below: Governing Body Structure and Size: The governing body of Woolworths group is the board of directors. The board of directors are entitled to formulate policies and undertake strategies which will certain enhance the value of the shareholder of the company. It can be observed from the analysis of the governing structure of the Woolworths that there are 8 Board of directors. Out of 8 board of directors, 7 are non executive board of directors and 1 is a Executive Director of the group. Current members of the Board & Board Information: The current members of the board and the details of the each of the board members are depicted below: ⦁ GM Cairns ⦁ JR Broadbent ⦁ HS Kramer ⦁ SL Mckenna ⦁ SR Perkins ⦁ KA Tesija ⦁ MJ Ullmer ⦁ BL bBnaducci The details like the experience and qualification and remunerations of the shareholders are also provided in the annual report of Woolworths group. Figure: board Members & membership of the committee of the company and meetings attended Board Committees at Woolworths: There are 4 major committee at Woolworths which are formed to look after various aspect of governance of the company. The names of the committee are depicted below: ⦁ Audit , Risk , Management & Compliance Committee ⦁ People Policy Committee ⦁ Sustainability Committee ⦁ Nomination Committee Apart from it, there is also a committee called “Group Executive Committee” which look after implementation of policy and oversee the entire business operation of the company. Shareholders: Shareholders are the person who are basically the owners of the company or possess shares of the company. It is essential top mention that there are in total 1288163108 number of shares of the company out of which1287958057 are floating which is almost a 100% floating shares. Both the institutional and retail investors are shareholder of the company. The details of the major shareholder’s of the company are depicted below: ⦁ Perpetual Investment Management Ltd. ⦁ The Vanguard Group, Inc. ⦁ Norges Bank Investment Management ⦁ BlackRock Fund Advisors ⦁ Colonial Fist State Assets Management (Australia). Ltd. ⦁ Commonwealth Superannuation Corp. (Investment Management) ⦁ Vanguard Investment Management Australia Ltd. ⦁ Schroder Investment Management Australia Ltd. ⦁ Asutralian Foundation Investment Co. Ltd. (Invt Management) Governance processes In case of Woolworths Limited, the framework and the policies following which the company performs its major business activities are established in different important policies and documents. The board of Woolworths Limited set a relevant statement for corporate governance each year and the work details are given based on the previous financial year. It is the constitution of Woolworths that basically explores and sets up the different rules and policies that governs the business of Woolworths. The constitutions are generally adopted during the Annual General Meeting of the company by the shareholders of the company. The Board of Directors of the company have the responsibility to act on part of the company’s shareholders in context of looking after the company’s performance and upholding the proper corporate governance since it is the management board who mainly takes the decisions regarding the management operations of the company. It is again the responsibility of the Board Charter to establish the responsibilities, structure as well as the procedures of the board of Woolworths Group. This actually implies the power and the ways in which the board charter can correspond to the interests of the shareholders of the company besides that of keeping in mind about the international best practice along with that of the relevant legal frameworks that are applicable to the company. There are about four committees that are set up by the board of directors of the company which are the board committees and each of the committee are set up based on the board charter so that the board can easily deliver excellent work and perform its roles and responsibilities. The Board is guided and assisted by each of the committee so that the directors of Woolworths Limited can emphasize up on only one particular area of the corporate governance at the same time of reporting about each and every decisions that are to be taken along with that of giving relevant suggestions to the Board of the company. It can also be adjudged by the company that in this era of globalization, the needs of the customers are changing rapidly and the world is indeed an uncertain place for judging the same. Therefore, the success and the growth of Woolworths Limited in a continuous and constant basis definitely implies the ability of the company to reflect and respond to the different threats and risks and managing them with proper risk management policies to the best of their ability. Since, Woolworths Limited is a very large organization having a dispersed and complex structure of the organization, it is obvious that the company is exposed to a number of risks or threats in context of financial as well as lawful risks which are definitely important to be managed in an easy and faster way. Apart from all these policies and rules, there are also other policies which include continuous disclosure policy, securities trading policy, diversity policy, safety and health policy and the communications policy which all governs the way of working of Woolworths Limited. Corporate Governance issues and consequences in Woolworths Limited It has been identified that the main cause of the issues happening at Woolworths Limited is not basically the retirement of the CEO Grant O’ Brien. It is mainly the Board of Directors of the company. Woolworths Limited retreated from that of their Masters strategy and this issue mainly happened because of the poor corporate governance by the directors of the company. This issue led not only to a commercial blow down to that of the company but this is certainly a failure of the corporate governance to a huge extent. As it was declared in the Investor Strategy Day of Woolworths Group, it was stated that Masters will definitely be able to yield greater profit to Woolworths Group that too in the long term and in a sustainable way. But since there was no proper approval of the messages by the board and there were issues in the corporate governance strategies of Woolworths Limited, it made a great change towards the outlook of the Masters. This mistake of management by taking poor and bad decisions have resulted to cost Woolworths Limited and this has proven to be a blow down for the company. References ⦁ Council, A.C.G., 2003. Principles of good corporate governance and best practice recommendations. Australian Stock Exchange Limited. ⦁ Woolworthsgroup.com.au. (2017). Woolworths Group: Quality Brands and Trusted Retailing. [online] Available at: http://www.woolworthsgroup.com.au [Accessed 3 May 2017]. ⦁ Tricker, R.B. and Tricker, R.I., 2015. Corporate governance: Principles, policies, and practices. Oxford University Press, USA. ⦁ Giroud, X. and Mueller, H.M., 2010. Does corporate governance matter in competitive industries?. Journal of Financial Economics, 95(3), pp.312-331. ⦁ Giroud, X. and Mueller, H.M., 2011. Corporate governance, product market competition, and equity prices. The Journal of Finance, 66(2), pp.563-600. ⦁ Woolworths Limited (2017). Home - Woolworths Annual Report 2016. [online] Wow2016ar.qreports.com.au. Available at: https://wow2016ar.qreports.com.au/ [Accessed 5 May 2017].