Corporate governance - Case Study Example

The corporation holds an enhanced asset policy that helps in reducing the risk and optimizes opportunity (BHP Billiton, 2010). The corporate governance program of BHP resulted in the financial growth, with increase in sales volume. EBIT (Earnings Before Interest and Taxes) increases with higher margin with a positive increase in the cash flow, thus making the corporate more competitive along with maintaining the shareholders interest in the corporation in different ways especially through enhanced dividend policy (BHP Billiton, 2010).

As stated by Timothy M. Devinney in one of his article, BHP Billiton had routinely placed itself soaring in social responsibility surveys (such as Global Reporting Initiative) for the corporations’ response to the environmental procedures and safety (Devinney, 2009). Due to the consequence of highly exposed measures such as the James Hardie asbestos scandal and the collapse of Enron in Australia, it had increased the level of corporate governance. BHP shareholders have formed ‘BHP shareholders for social responsibility’ concerning about the social, economical and environmental issues and the BHP management have actively participated in corporate governance (Thomas & Nowak, 2006).

BHP Billiton have committed to the UN Universal Declaration of Human Rights and the UN Global Compact. It has committed to the Global Reporting Initiative towards the social responsibility (Jones & Et. Al., 2007). BHP Billiton has failed in their commitment towards collective bargaining for its employees which was compatible with its CSR line. During previous years the report relating to the collective bargaining and issues related to labor management was not emphasized. During the year 2005, the corporation had listed unions as the key stakeholders but still it did not align to the corporate social responsibilities.

The potential for ethical business behavior is judged when the corporations reinforce