Essay Corporate Law

Question: Write an essay on the corporate law. Answer: Introduction Corporate law is actually a company oriented law which mainly highlights different level of study for the companys shareholders, directors, creditors, stakeholders and even the customers. Various communities as well as environment are often in communication with each over different perspective. Corporate law could be stated as a vital part of company oriented law. Corporate governance mainly includes the different processes, and relations utilising which the companies do set their objectives and aims to achieve those in relation to the current business scenario (Bainbridge, 2015). The method of articulating corporate governance includes the process of monitoring the various actions taken by the company, their policies and company oriented practices which might throw impact over the stakeholders. An important theme of corporate governance is the nature and extent of corporate accountability. Different companies which are estimated to practice the corporate governance mainly looks forw ard to bring in economic efficiency by establishing strong prominence over the welfare of shareholders. Expectations of the corporate governance council The ASX corporate governance council was estimated to get formed in the year 2002 and in the month of 15th august. This council was noticed to bring together about 21 groups of company which already possessed a incongruent form of business background and aimed at carrying out different aims and priorities which are further being accompanies by the different forms of constituencies. Instead of functioning over different perspective the ASX corporate governance council was estimated to possess a lot of expectations. The council had an expectation to develop as well as deliver the huge industrialized form of supported framework to different other companies so that they could function efficiently in the business market (Dowling et al 2014). They had an expectation to provide certain level of practical guidance to different new companies which has just made their entrance in the business field. Other expectations of the council is also estimated as to provide more amount of flexibility to a variety of business structures and performance of all the working employees of the organisations and companies to which certain level of flexibility has been offered would be able to make certain level of optimization over individual performances who are working in the organisation. The corporate governance council expects to make certain promotions, adoption, as well as efficiently implement the varied guidelines so that business organisation would be able to carry out their business efficiently and business relationship could be enhanced by carrying out certain forms of fiduciary responsibilities in order to keep the long term investment interest order safe. Interest upon which the Board of directors act The board of directors are mainly estimated to act according the specified companies interest and suggest companies to take up steps for making changes over its existing systems and cultures so that the productivity of the organisation would be increased and the company would be able to meet their business objectives to achieve long term success in their business. When according the companies interest the boards of directors are suggested to follow the principles designed by the organisation so that they could perform legally in the business market (Feld, 2013). When the board of directors are estimated t act according the companies they should get familiar with the companies objectives and restructure the business in order to make the company or the business organisation attain competitive success. Various role of the board of directors The boards of directors are estimated to possess a variety of responsibilities like: The boards of directors have been held responsible in order to govern as well as administer the organisation perfectly so that the company might not experience any kinds of business risks while operating the market. In governing the organisation has to set up certain policies and objectives which would help in meeting the vital goals of the companies (Gorga et al 2014). The boards of directors are also highly responsible in selecting, appointing and supplying efficient support over the various functions that is being carried out by the chief executive of the organisation. The boards of directors are highly responsible to make sure about the efficient flow of perfect amount of financial resources so that organisations are able to carry out their responsibilities efficiently (Howson, 2013). The board of directors has been made totally responsible for making certain level of approvement over their annual budgets so that the organisation or the company would be able to understand the amount of cost per month in manufacturing products Also the boards of directors are responsible in carrying out perfect accounting procedure so that the performance level of the organisation could be enhanced. Last but not the least the boards of directors are totally held responsible in setting the salary structure and compensation level for the working employees so that the management of the organisation could run efficiently (Idowu 2013). An introduction to independent director with example An independent director of a company could also be stated s a outside director of the company who is mainly estimated to possess a pecuniary form of relationship with the other board of directors of the company and are responsible to carry out different activities within the business organisation. The independent directors are not found to create any kind of share over the companys financial structures (Johnson, 2013). For example a general electric corporation company is mainly found to provide certain level of definition over certain form of material relationship in which the transaction between the GE and the companies directors are estimated to be equal to 1 percent in comparison to the total revenue and the GE who is also the independent director of the company would be able to get himself linked with the charity making an annul receipt. Legal strategies are available under Australian law to manage the independence of a boards decision making Different legal strategies are noticed to be available under the Australian law basically for the purpose of managing the high level of independence based on the boards decision making. If the organisation is noticed to have been highly incorporated under the corporation act 2001the company is entitled to carry out certain vital responsibilities and duties by the companys board of directors. The companys internal management is extremely important to have been governed by the provisions of the corporate act 2001which insist the companies to replace their existing rules making use of the constitution rules or even by making perfect combination of both (Klausner 2013). Under this legislative strategy of the corporation act of 2001 certain level of care as well as diligence is being supplied to the managers and other officers of the company so that they could get a chance to exercise control over different other staffs of the company. Through the corporation act its is basically noticed that companies experience certain level of flexibility in the process of information gathering so that they could make use of such information while launching a new product or service for the companies customers. Highlighting the importance of board position for the independent directors . Board position is very much vital for the independent board of directors so that they could carry out different activities within the organisation and govern the activities of different other people within the organisation. If the independent boards of directors are supplied with a perfect form of board position like in the position of chairman the independent directors would be able to act o behalf of the different shareholders linked with the functioning of the organisation so that they could make use of different business affairs that would create development in business. In gaining a board position the independent directors would be able to organise a general meeting so that the company would make future plans that would be helpful in making the organisation successful in their business (Phillips, et al 2013). When the independent directors would be supplied with a perfect form of board position they would hold a power to guide as well as increase the current operation structur e of the organisation so that they could establish future development. When the independent directors would be supplied with the board position it becomes easier for them to make promotion of their company to become successful in the competitive business field. Also when the independent directors are entitled to the board position they become capable in monitoring the shareholders relationship by establishing effective relationship with the stakeholders, and at the same time the independent directors would also become liable gather as well as make assessment over the information. When the independent boards of directors are supplied with a position in the board at the post of chairman they become capable in promoting the goodwill as well as support the relationship of the organisation with the shareholders and stakeholders. Better corporate governance versus better corporate performance A corporate governance practice is much important than the corporate performance because through the corporate governance system the board of directors of the organisation are able to make changes within the whole structure of the organisation. Through the involvement of corporate governance system an organisation is able to review and make perfect level of evaluation on the future and present opportunities so that the organisation would become capable in handling different form of risky situation, on the other perspective the corporate performance is not that much vital for the organisation because it might shape the behavior of one or few individuals but this system would not be efficient for all people working in the organisation. At times through the process of corporate performance it is noticed that people working in the organisation experience certain level of barrier while communicating with one another (Quinn 2013). When practicing corporate governance the organisations are able to make recommendations over the different strategic options but while focusing on facts that might enhance corporate governance organisations does not experience heights of success in their business. Through practise of corporate governance the organisations are able to make certain level of determination over the business strategies and plans so that they could further make use of the corporate strategy. On the other hand by highlighting corporate performance it is noticed that changes in organisational structure could be implemented so easily and they have to make choice over different corporate strategies which might be a very difficult task. But one of the most vital importances of corporate performance is that through corporate governance the organisations gain the capability in overcoming risks and threatening situations. Making illustration over the disclosure requirement in ASX Listing Rule 4.10.3? Under this disclosure requirement it is extremely vital for the ASX to make reduction over the entity that has been recommended over the set and functioning principle of ASX as stated under the ASX corporate governance council. In case the entity has been identified to not follow certain recommendations it is very much vital for the industry to make a separate form of identity for the purpose of not following the recommendations and input alternate form of government practices (Strine 2014). Under the listing rule the corporate governance practise should include the different form of statements with a current date and also including an entity balance date or even would include a later data that would be highlighted by the entity. It should also include a date that would be entitled by the entity of trust. Relevance of the Principle 2 and recommendations of the ASXs Corporate Governance Councils As per the principle 2 of the ASX corporate governance council it is important to establish a high performing as well as proper form of governance entity. According to this principle it would be important to possess an appropriate number of the independence level for the board of directors. And also for the non executive directors who would be capable of accepting the challenge that would further be helpful in highlighting the organisations capability of carrying out different forms of activities. According the principle 2 it has been stated that perfect level of interest of the listed entity the security holders of the organisations are highly responsible. As per the existing relation between the principle 2 and the recommendations stated by the ASX corporate governance it is extremely vital for the listed entity to have a perfect level of nomination committee within which there has to be at least three members among which the majority members are estimated to be independent directo rs, should also possess a chairman and a charter of the committee also including different committee members (Strine, et al 2014). As per the existing relation between the principle and the recommendations it hs been estimated that a separate form of nomination committee is very much vital and efficient for effective mechanisms so that some amount of transparency would be brought up and the a certain form of independent judgment could be established over certain decisions regarding the efficient functioning of the board. Within this relationship it is noticed that recommendations over the flexibility of the various security holders should be considered. On perspective of the relevance of the principle 2 and the recommendations over the ASX corporate governance it is important provide certain level of importance on the materiality as well as interest position of the independent directors of a company. Conclusion The practices of corporate governance needs to be carefully handles and if it is not done the companies would experience high level of risks. The board of directors of the company might experience certain level of insulation in perspective of their shareholders who are related to the management of the organisation. This aspect of corporate governance is noticed to be present within the different types of public debates as well as developmental regulatory policies (Bainbridge, 2015). The activities of the board of directors are always examined through the power they have been provided with and is conferred with the outside authorities of the organisation. High level of contemporary interest over corporate governance is estimated to be linked with certain forms of mitigation in relation to the different types of conflicts that might take place within the internal environment of the organisation. In large business industries or corporations it is mainly noticed separation in ownership t ake place due to the corporate governance practices. References Atanassov, J. (2013). Do hostile takeovers stifle innovation? 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