Australian Security Exchange Corporate Governance Council Principles - Research Paper Example

Download file to see previous pages The Principles were released a year after the ASX CGC was established and mandated to “design and implement guidelines to improve the efficiency, quality, and integrity of corporate governance practices and presentation of the company’s financial position”. In its admission, the ASX corporate governance council (ASX CGC ) states that although there is no single corporate governance model which can be touted as completely good, the articulation of 10 core principles was a reflection of what the council believed underlined good corporate governance in Australia. The Principles were revised in 2007 and consequently reduced to eight.

The ASX CGC (2003) defines corporate governance as “the system by which companies are directed and managed” (p. 3). The ASX CGC argues that corporate governance influences how companies set and achieves objectives; monitor and assess risks; and how the companies optimize performance. By issuing the 10 guidelines as contained in the ASX corporate governance principles, the ASX CGC hoped to encourage Australian companies to create value for business stakeholders in the country through encouraging entrepreneurship, exploration, innovation, and development. The ASX CGC also intended the 10 principles to enhance accountability by providing control systems that were commensurate with the various risks involved in Australia’s business environment.

It is worth noting that corporate governance is multi-faceted. It covers matters to do with accountability, auditing, control, fiduciary duty, and transparency among the board of directors and the management in firms that have multiple shareholders. In one sense, corporate governance must abide by codes that uphold the overall good of all shareholders in the firm. On the other hand, corporate governance needs to focus on economic efficiency within and outside the firm to satisfy different stakeholders. If the economic perspective were to be considered, corporate governance should also act to satisfy not only its shareholders’ interests but also the interests of other stakeholders. ...Download file to see next pages Read More