Sustainable Development And Responsibility -Myassignmenthelp.Com

Question: Discuss About The Sustainable Development And Responsibility? Answer: Introducation The chosen company for this particular report is BHP billion Ltd. It is an Australian Company which has the headquarters in Melbourne. The basic reason of choosing this company in this particular project is it is regarded as the worlds largest mining company and apart from this it is referred as the fourth largest company in Australia (BHP Billiton 2017). There are many aspects in the company that can be explored and the large profile of the company made it easier to choose the company for writing this assignment. The operations of the company are extended to the mining of minerals beside oil and production of gas. It has a global impact. The process of operation is carried in over 25 countries. The company owns the subsidiaries in the field of logistics and transport. It does not end here, the company reportedly made significant donation towards the society. It works in the sector of mining and therefore it uses green energy in order to minimize the emissions (BHP Billiton 2017). Th ese are the main reasons for choosing this company. However the most important factor for choosing this particular company is the controversy that it faced in the recent times. It was in the news for the poor performance according to the stock exchange in Australia. The transition from being a good company to a bad company is something that can be witnessed in the report. This was an exciting area to work upon. Board characteristics Approach Did the Company comply with the code? Explain/Provide Evidence Implications Separated roles of CEO/Chairman Yes the company complied with the code of Corporate Governance. According to the code of Corporate governance every company should be headed by an effective board which is collectively responsible for the long-term success of the company. There should be a clear distinction between running of the board and the executive responsibility for the smooth running of the business of the company. The Chairman and the CEO should be responsible for leadership of the entire board and to ensure the effectiveness on all the aspects of the role (Keay 2014). The company complies with the above mentioned factors and it maintains the code. The Chairman and the CEO directs the entire board and they are the ultimate decision makers of the company. Therefore they serve a great responsibility (Filatotchev, Jackson and Nakajima 2013). The company functions properly under the leadership of the Chairman and CEO. The code of governance help the company to maintain the decorum of the company and it keeps pedagogy in the company. Role of Executive Leadership team Under the code of governance the ELT should be responsible for the daily management of the group and for the leading the delivery of the objectives related to the strategy. This is maintained by the Executive Leadership Team and they are efficient in it (Dignam and Galanis 2016). This helps to maintain the proper track of the delivery of the products. The objectives of the strategy direct the organization in the right path. This is the major implication of this code of corporate governance. Role of operations management committee The code of corporate governance opines the fact that the responsibility of the operations management committee is to plan and direct and control the activities of the company (Khan, Muttakin and Siddiqui 2013). The company complies by all the codes of corporate governance. The operations management committee directs all the key group strategies, decisions related to investment and operations and it provides recommendations to the board. They disclose the financial and other performance primarily by commodity (Daily and Dalton 2015). This has a major implication in the company. The disclosure of the financial and other performance of the commodity provides the most meaningful insight into the nature and the financial outcomes of the activities of the business and the facilities greater comparability against the industry peers. Board characteristics Approach Did the Company comply with the code? Explain/Provide Evidence Implications Gender diversification (percentage of female to male) The organization does not have a balanced workforce in relation to the gender diversity as they are operating in the mining industry and in extracting minerals and ores the management recruits male individuals mostly. The management of BHP Billiton aims to attain a gender balance in their organization by the year of 2025 and they are currently working on the issue (Adhariani, Sciulli and Clift 2017). Skills and Board knowledge and (Skills, Current and previous board experiences) The management board of BHP Billiton has sustained a matrix of skills for a few years and the matrix can impact the industry along with the external environment in general. The board members of BHP Billiton are experienced enough while working for other concerns and while working for BHP Billiton. The majority of the board members have of more than 10 years working as a manager or advisor. The highly experienced and effective board members of BHP Billiton are seen to increase the productivity of the business organization like never before and under their supervision, the organization can aim to capture the majority of the global market within a few years. Age (Average Age of the Board) The average age of the board is 60. As the average age of the board members is 60, then it is likely that they have more experiences than any other individual working in the same sector (Olivier and Wright 2014). Thus it can be considered as an advantage of the business organization. Independence (Number of Independent board members to executives) Currently BHP Billiton has 10 independent board executives working for them who are experienced enough to run the business successfully. Having 10 independent board members is one of the strongest points of the business organization and the management can use it to increase the productivity and profitability of the organization. Accountability components Approach Did the Company comply with the code? Explain/Provide Evidence Implications Structure of audit committee (nb of independent board members) Currently in the audit team of BHP Billiton there are 10 members with experiences of more than 20 years in the finance sector and that helps the organization to face no issues in relation to financial matters. Having a well structured audit team the management of BHP Billiton experience advantage in the financial sector and that directly help the organization to eradicate any financial and legal issues. External Auditors (who are the auditor of the firm, what is the time scale of their contract) At the time of merging, the management of BHP Billiton stated that they would put the external audit to tender and they appointed PricewaterhouseCoopers and KPMG along with Anderson as the external auditors. By appointing big reputed organizations as external auditors BHP Billiton continued to show their class and that projected why they are different from any other organizations working in the same sector. Board evaluation (when was the last time the firm took and external perspective to this) The board will evaluate the effectiveness of the chairman, committees, and individual directors along with the process of governance. The board will evaluate the level of performance of the directors. All the evaluations will be on the basis of the balance of skills, tasks performed by the board and the experience and independence of the company on the board. The evaluation of the board of BHP Billiton will immensely help the management of the organization to identify the strengths and weaknesses of the governance body and that can effectively improve the productivity along with the profitability of the business organization. Remuneration characteristics Approach Did the Company comply with the code? Explain/Provide Evidence Implications Structure of Remuneration (Components of Pay/ Clawback/ Long-term targets) The structure of remuneration of BHP Billiton is directly linked with the performance of the groups during the financial year. The remuneration policies of BHP Billiton shall be put in front of the stakeholders and the AGM for three yearly approvals (Salvioni and Astori 2015). In the structure of the remuneration committee of BHP Billiton, the field supervisors evaluate and gather the reports regarding the level of performance and involvement of the general employees and then send them to the senior managers. The senior managers consult with the HR managers regarding this issue and then send the file to the board of directors. After getting approved from the directors, the HR managers fix the remuneration structure of the employees. The improved structure of remuneration will help the general workforce of the business organization to get further motivation and loyalty towards the organization and this will positively impact on the productivity and profitability of the business corporation. CSR characteristics Approach Did the Company comply with the code? Explain/Provide Evidence Implications AGM reporting (nb of meetings/ disclosure of voting) The management of BHP Billiton ensures that they will assess their CSR performance in relation with the Global Compact principles set by UN. The board of BHP Billiton will arrange an annual forum regarding CSR that will bring all the senior executives and the major private business organizations together to discuss on the environmental and social matters (Fonseca, McAllister and Fitzpatrick 2014). By investing in the projects favoring the communities will ensure a persistent framework to measure the tangible progress. If the CSR activities of the business organization get enhanced, eventually it will increase the reputation of the organization in global market and that can effectively improve the level of productivity and profitability of the business corporation. As the organization BHP Billiton abides by all the regulations set by UN, the organization does not have any threats in this regard at least. Communications with shareholders (what tools are used) The management of BHP Billiton maintains a good communication with their shareholders. After conducting the general meetings or summits they provide all the necessary information to their shareholders to maintain a basic transparency. This is a good initiative taken by the management of the organization as this improves the relation between the governance body and the shareholders of the organization. By maintaining a strong communication with the shareholders the management of BHP Billiton can experience a transparency and loyalty of the shareholders of the organization (Pottenger and Leigh 2016). This can effectively improve the financial issue of the organization and lets the organization to generate more capital by the selling of the shares in the global market. There are many shareholders of -the company and they are consistent. The biggest shareholder of the company is Bank of America corp. With the market capitalization of 147 billion pounds it can be ranked in one of the four major money-center banks in the United States. This provides a full range of financial services, investment-banking services and commercial services. The company has been found to be operated through five business divisions. The five divisions are the consumer banking, the investment management, Legacy and servicing, Global Markets and Global wealth (Tricker and Tricker 2015). The other important stakeholder of the company is Dimensional Fund Advisors LP. It is a private investment-management firm that has its headquarters situated in Austin. It launches and manages equity and fixed-income mutual funds and investment portfolios for the clients. It also looks after the investment in real estates. This firm has many offices in many areas like in U.S, Canada, the Unite d Kingdom, Australia, the Netherlands, Germany, Singapore and Japan. The third most important shareholder is Earnest Partners LLC. The company is a privately owned investment-advisory and management firm. The headquarters of the company is in Atlanta. It deals with equity and fixed-income investments (Mason and Simmons 2014). Apart from this the firm also deals in alternative investments and other assets. The other prominent shareholder is CL Investment Inc. This company is a Toronto-based subsidiary of CI Financial Corporation. The company offers investment management and advisory services to a wide range of clients. This looks after fixed-income mutual funds and it manages the portfolios of the clients. Apart from these shareholders there are other shareholders are Neuberger Berman Group LLC (Clarke 2014). The company is found to cooperate well with the shareholders. The employees of the company make effort in reporting about the progress of their annual general report to the shareholders (Salvioni and Bosetti 2015). They inform about their annul business and about their annual progress to the shareholders. The shareholders are provided with detailed information. The company is found to disclose the shareholder voting. These are important as the shareholders invest money in the company (Idowu, Capaldi and Zu 2013). At the end of the year they expect some amount of cooperation and some amount of profit from the company. This keeps their relationship healthy. This is the reason these factors are important. This is a large organization where the shareholders have kept their trust on the company. The decision of the company can bring the stakeholders to risky situation and therefore they are supposed to be informed about all the situations that are faced by the company (Bushee, Carter and Gerakos 2013). The company is found to comply with all the codes of the corporate governance. The company is not found to miss any major code and this is the reason the company is placed in a good place and it is rated as one of the biggest and largest growing company. The only pitfall that is there in the company is on the part of the duties of the directors. According to the code of governance in relation to the duties of the directors, they should use their abilities towards the best possible interest of the organization (BHP Billiton. 2017). However in this case as the directors are not able to channelize their skills towards the companys best interest they are not complying with the directors duty. It can also be stated in this case that as their no diversity in the board with respect to educational background they do not have the ability to bring the company out of the adverse situation. Apart from this the company is found to abide by all the code of corporate governance and there is no chan ce to find a fault in the company regarding this (ArAs 2016). Critical reflection The difficulty that I faced while doing this assignment was to find the relevant information of the company and to study the exact code of corporate governance. The functions and the role of the shareholders was a huge thing to find and a difficult one. However from the assignment I learned the policies and the norms of the code of corporate governance. By analyzing the pitfalls in the system I realized the ways by which it could be improved. I realized some problems that were there in the company and I came up with some way on how to improve those. In the first place the responsibility of the managing director of the company must be separated from that of the chairman. Both of them should manage their affairs separately without interfering with each other responsibilities. The company should seriously address the need of sub committees. The committees must consist of the non-executive directors who are independent. The subcommittees must be made with respect to areas like nomination , audit, appraisal and remuneration. I realized that it is extremely necessary to have an efficient and independent board of directors within the company and the company maintains a good relation with the shareholders as this is the first and foremost ethics that the company must follow. I could extract about the necessity of the code of corporate governance and the function of the same in any company. This was my understanding of the work. References Adhariani, D., Sciulli, N. and Clift, R., 2017. Qualitative Content Analysis: Results and Discussion. InFinancial Management and Corporate Governance from the Feminist Ethics of Care Perspective(pp. 119-208). Springer International Publishing. ArAs, G., 2016.A handbook of corporate governance and social responsibility. 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