The consequences of mandatory corporates - MyAssignmenthelp.com

Question: Discuss abouttThe consequences of mandatory corporates. Answer: Introduction In todays business world, Corporate Governance and Sustainability Reporting are considered as two of the major factors for organizational success. Corporate Governance refers to the mechanisms, processes and relations that help the business organizations in controlling and directing their business activities (Tricker and Tricker 2015). On the other hand, Sustainability Reporting is considered as the report that helps the organizations in providing information regarding their economic, environmental, social and corporate governance performance to their stakeholders (Ioannou and Serafeim 2017). Thus, the main aim of this report is to analyze and evaluate various aspects of sustainability reporting and corporate governance for JB HI FI Limited, Australia. Governance Mechanism of JB HI FI The board of directors of JB HI FI puts utmost importance on their effective corporate governance mechanism for addressing various environmental and social matters. JB HI FI develops their corporate governance policies for their shareholders, suppliers and customers. Another major aim of the corporate governance mechanism of JB HI FI is to continuously monitor and review the development of sustainability reporting. With the help of corporate governance mechanism, JB HI FI ensures that all of their business operations are carried on ethically and as per the high standard of corporate governance (jbhifi.com.au 2017). The annual report of JB HI FI states that the company complies with all regulations and policies of 3rd edition of the ASX Corporate Governance Council Principles and Recommendations. Specifically, in the year of 2017, JB HI FI has fully complied with all the principles of ASX Recommendations. In the year 2017, the board of directors of JB HI FI has approved the Corporate Governance Statement and effective from 14 August 2017. These are the corporate governance mechanism of JB HI FI for sustainability (jbhifi.com.au 2017). Link between Sustainability and Risk Management The sustainability report of JB HI FI states that the company has three kinds of sustainability risks in their business operations. However, JB HI FI has linked their sustainability risks with their risk management procedures in an effective way. The first risk is Economic Sustainability risk that affects the ability of JB HI FI to continue in their current economic production level for long-term. As a part of risk management, JB HI FI has developed several strategies to reduce economic sustainability risk like implementation of proactive management system, provide encouragement to technological innovation and many others (jbhifi.com.au 2017). The next risk is Environmental Sustainability risk that affects JB HI FI to continue their business operation by not harming the ecosystem or the environment. In this aspect also, JB HI FI has linked this risk to risk management procure with the help of certain strategies. Some of these major strategies are carbon disclosure project, the promot ion of energy efficient products, packaging agreements, recycling of mobile phones and others. The third risk is Social Sustainability risk that affects the companys ability to meet the social norms. The company has developed certain risk management strategies to minimize this risk. Some of the major strategies are various workplace-giving programs, different donation initiatives and many others. With the help of these above-mentioned strategies, JB HI FI has linked sustainability to their risk management systems (jbhifi.com.au 2017). Guidance for Implementing Environmental, Social Performance and Reporting System The annual report of JB HI FI shows that the company follows certain guidelines for implementing environment and social performance reporting system. It needs to be mentioned that the company complies with all the required principles and standards for their environmental and social performance. For this purpose, the company complies with the regulations of 3rd edition of the ASX Corporate Governance Council Principles and Recommendations (asx.com.au 2017). According to this guidelines, it is the responsibly of the business organizations to disclose about all data and information regarding the environmental and social performance. The annual report of JB HI FI states that the company has taken several initiatives for mitigating the risks of sustainability. These initiatives have been taken to minimize the risks of both economic and environmental sustainability risks. Thus, it is required for the company to report about the progress of these sustainability initiatives. In present busin ess world, investors largely consider the sustainability activities of companies before investment. Complying with the standards of 3rd edition of the ASX Corporate Governance Council Principles and Recommendations helps JB HI FI to report their progress in sustainability initiatives in an effective manner (asx.com.au 2017). Practice of CSR In the business environment of Australia, the ASX listed companies are required to maintain four components; they are prescribed environment disclosures, obligation for continuous disclosure, obligation for general reporting and obligation for periodic reporting (researchonline.mq.edu.au 2017). it needs to be mentioned that the companies can become greatly beneficial from the voluntary disclosure of CSR practices. First, the companies can obtain defined CSR reporting framework for the elimination of potential sustainability manipulation. Second, in the presence of uniform CSR disclosure framework, there will be greeted degree of comparability between the companies of ASX in terms of sustainability reporting. Third, the stakeholders of the companies will be able to assess the CSR as well as sustainability activities of the companies before investing. In addition, there are many other benefits (Dhaliwal et al. 2012). However, CSR disclosure varies from industry to industry. For example , the manufacturing companies affect the environment as well as community with their production activities. For this reason, they are required to disclose more on CSR as well as sustainability activities as compared to any service provider company. However, all the companies are required to disclose their CSR as well as sustainability performance for their stakeholders and investors (Chan, Watson and Woodliff 2014). Conclusion The above discussion shows that the board of directors of JB HI FI largely focuses on the aspects of corporate governance as well as sustainability reporting. In this aspect, JB HI FI complies with the principles and standards of 3rd edition of the ASX Corporate Governance Council Principles and Recommendations for corporate governance and CSR activities. In addition, the above discussion also shows that JB HI FI has linked their sustainability risks with their risk management activities with the help of different sustainability strategies. References Asx.com.au. (2018).Corporate Governance Council. [online] Available at: https://www.asx.com.au/regulation/corporate-governance-council.htm [Accessed 5 Jan. 2018]. asx.com.au. (2018).Corporate governance principles and recommendations. [online] Available at: https://www.asx.com.au/documents/asx-compliance/cgc-principles-and-recommendations-3rd-edn.pdf [Accessed 5 Jan. 2018]. Chan, M.C., Watson, J. and Woodliff, D., 2014. Corporate governance quality and CSR disclosures.Journal of Business Ethics,125(1), pp.59-73. Dhaliwal, D.S., Radhakrishnan, S., Tsang, A. and Yang, Y.G., 2012. Nonfinancial disclosure and analyst forecast accuracy: International evidence on corporate social responsibility disclosure.The Accounting Review,87(3), pp.723-759. Ioannou, I. and Serafeim, G., 2017. The consequences of mandatory corporate sustainability reporting. Jbhifi.com.au. (2018).Annual Report 2017. [online] Available at: https://www.jbhifi.com.au/Documents/2017%20Annual%20Report.pdf [Accessed 5 Jan. 2018]. Researchonline.mq.edu.au. (2018).CORPORATE SOCIAL RESPONSIBILITY IN CONTEXT: THE CASE FOR COMPULSORY SUSTAINABILITY DISCLOSURE FOR LISTED PUBLIC COMPANIES IN AUSTRALIA?. [online] Available at: https://www.researchonline.mq.edu.au/vital/access/services/Download/mq:3083/DS01?view=true [Accessed 5 Jan. 2018]. Tricker, R.B. and Tricker, R.I., 2015.Corporate governance: Principles, policies, and practices. Oxford University Press, USA.