Base for management and oversight

Discuss about the Mechanism Of Audit As Well As Compliance Of A Organization.

Base for management and oversight

The board of directors at Telstra is accountable for supervision  industry for Telstra, and is liable for the stakeholders for carrying out that part (Williams, Bingham & Shimeld, (2015). additionally to the issues the director Board is needed by law for approving the key accountabilities of the Board, that comprise:

• corporate plan and strategy
• Approving as well as supervising the strategies execution
• Setting as well as approving of the corporate plan and analysing the operations
• To Appoint the CEO and assess the performance and determination of their remuneration.
• To appointment and set the remuneration of senior manager and asses their performance.

The composition of Board Committee is measured by the “Board and Nomination Committee” and ensures that it is according to the with the outline that is set out Charter and is done according to the processes executed by the Board. They support and identify the zones of focus and maintains a proper mix in their participation. The Board employs a skills matrix that is on a regular basis verified by the Board. The skills matrix of the Board sets out the experience mix, expertise and skill, currently the Board has and is seeking to accomplish in its membership. Its construction mirrors the areas that are particularly significant to the three strategy pillar that consist of delivering the excellent experience of the customer, drive value and growth from the core and build new growth businesses close to the core. They areas of general relevance to the alignment of the Board.

The company of Telstra have five values. The values represents their position and are the core ethical principle of the business. Being a values-led firm, the company focuses on the decisions and actions of the people by guiding them how to work together. There exist a proper alignment in all the activities with the set out ethics. The structure of Code of Conduct and policy signifies the values of Telstra. The business promises to good corporate governance, business practice that are responsible to the workforce and the customers. They also provide the framework through which there is a suitable maintenance in compliance with the lawful obligations as set in the report.

During outlining the process and the responsibilities of approval of the declaration ASX that includes where there is a required approval of the Board with regard to its declarations that relate to matters that are within the reserved Board power.It is the role of the CEO, CFO and Continuous Disclosure Committee in relation to disclosure matters. The aims of the company is to make sure that they give the different stakeholders including, investors, shareholders and the financial community with proper and timely information while making sure the obligations of statutory reporting under the Corporations Act and the Rules of ASX List (Pratheepkanth, Hettihewa & Wright, 2016) The market disclosure policies and practices of the company are updated and reviewed regularly. The organisation provides various advance notification of substantial group briefings, like the results announcements, and make them widely available through the use of webcasting and placing all declarements made to the market.

Board Committee and Skills Matrix

The Corporate governance and reporting structure plays an integral role in supporting the organization and ensuring the strategy (Wells, Moyeen & Ingley, 2016,). It provides the outline through which the business and strategic goals are established, performance is supervised, and the risks that have been controlled. There is a proper standard for accountability as well as decision making and provides guidance on the standards of behaviour that are expected from each other. In the 2017 Corporate Governance Statement there is the description of the key governance arrangements and practices. The company complies with the third edition of the Council for ASX Corporate Governance’s Corporate Governance Principles and Recommendations (ASX Recommendations), which is replicated in this Statement Corporate Governance (Safari, 2017).

The company facilitates a direct, two-way dialogue with the investors and stakeholders. It is necessary that there is significant information given as efficiently and quickly as possible to shareholders after recognising the significance of meeting the constant disclosure and other legal responsibilities to the market (Williams, 2017). The company understands their respond and perspectives to their feedback. There are a set of initiatives in place to promote communication that is effective with the investors and shareholders, and to encourage involvement at the shareholder meetings

The company’s risk management structure is implemented, designed and reviewed with the accountability model of ‘three lines of defence’, that includes the following:

• First Line – Shareholders of the business and managementof operation who are obligated for the identification, assessment as well as management of their volatility (Poulton, Barnes & Clarke, 2017).
• Second Line – The risk management teams along with Chief Risk Office in the units of business, which are obligated for compliance and risk frameworks, monitoring and oversight
• Third Line – The Group function Internal Audit, who are responsible for providing independent assurance on risk management, governance and internal control processes.

In the company the core components of the company’s framework is the risk management process that enables identification, monitoring and reporting of risks for achieving of the plans and objectives (Pearson, 2016) The process of risk management is inclusive of all types of risks from internal and external sources, including strategic, operational, financial and regulatory, as well as economic, environmental and social sustainability risks.

Fair and responsible way of structuring remuneration

There exist a remuneration committee that gives assistance to the Board with the following relating to:

• Remuneration policy of the Board, Company Secretary and CEO
• Remuneration and performance evaluation of senior management
• Strategies of remuneration, disclosures and practices generally that includes non-routine arrangements of remuneration
• Various plans of employee equity
• Management succession, capability and development of talent.

Overview of the nature of the company

Telstra is largest telecommunications business in Australia. Telstra Corporation is an media and telecommunications company in Australia that operates as well as facilitates networks of telecommunications, mobile, access to internet, markets voice, pay television and other entertainment services along with products (Hanrahan & Bednall, 2015).

Regulation of client

The clients are regulated by the subordinates and managements who are employed by the board of directors.

Market Overview

The market share of the Telstra is 90%. The company focuses of on differentiated and cost advantage products for reaching the competitive advantage (Fox, 2014). Its main strategy is to retain the sustainability of the resources with smart technology and personified service.

Balance sheet and Income statement ratio calculation

Analysis of Common size statement-horizontal analysis

• As per the 2017 annual report of Telsra, it has been found that the debt equity ratio of the organisation is 1.90. It is calculated by dividing the total debt of the organisation by its total equity. High ratio like more than 1 represents that the company is highly leveraged and the higher interest burden can lead the company to unsustainable level (Psaros & Seamer, 2015).
• Both the quick ratio that represents the liquidity position of the company is very low like less than 0.96. This shows that the current assets of the company are considerably low if it is compared to current liabilities. Hence it can be said that the organisation is not efficient in paying off the obligation of short term with their short term assets.
• The shareholders return is low that is  27, the operating profit margin as well as the net profit margin of the company are as low as 0.38 and 0.22 respectively. It signifies that the company is not so efficient in earning return.

The various steps to reduce the risk in the company are as follows:

• To employ internal control consultants: An third person is totally unconnected to the organisations day to day operations who can more objectively view the situation and more readily recognize areas in need of development(Adams, Borsellino, & Young, 2017). Thus, he should be employed.
• To progress a sound plan of risk management: Having enough insurance to protect against losses is only one aspect. Taking proactive steps to cross-train is other main way to avoid the risks. However, a proper plan of risk management will provide a measure for reducing the risk.
• To identify and review the internal controls of the company: The management must checks the balances of the company (Qu, et al., 2016). With regard to safety issues, internal controls can be as simple as implementing a checklist of precautions before entering a work zone.

References

Adams, M., Borsellino, G., & Young, A. (2017). Chartered secretary: Leading from the top: The missing piece in nurturing good corporate culture?. Governance Directions, 69(4), 203.

Fox, J. (2014). ASX Corporate Governance Council review of’Corporate governance principles and recommendations’. Governance Directions, 66(3), 142.

Hanrahan, P., & Bednall, T. (2015). Independence of directors affiliated with substantial shareholders: issues of law and corporate governance. COMPANY & SEC. LJ, 33, 239.

Pearson, G. (2016). Failure in corporate governance: financial planning and greed. Handbook on Corporate Governance in Financial Institutions, 185

Poulton, E., Barnes, L., & Clarke, F. (2017). The labyrinth of international governance codes: The quest for harmonization. The Journal of Developing Areas, 51(3), 425-435.

Pratheepkanth, P., Hettihewa, S., & Wright, C. S. (2016). Corporate governance and financial performance: The case of Australia and Sri Lanka. Corporate Governance, 7(1), 1-12.

Psaros, J., & Seamer, M. (2015). Ranking Corporate Governance of Australia’s Top Companies: A Decade On. Australian Accounting Review, 25(4), 405-412.

Qu, X., Percy, M., Stewart, J., & Hu, F. (2016). Executive stock option vesting conditions, corporate governance and CEO attributes: evidence from Australia. Accounting & Finance

Safari, M. (2017). Board and audit committee effectiveness in the post-ASX Corporate Governance Principles and Recommendations era. Managerial Finance, 43(10), 1137-1151.

Wells, P., Moyeen, A., & Ingley, C. (2016, April). Independent Directors: Experience and Value in Contrasting Economic Contexts. In International Conference on Management, Leadership & Governance (p. 383). Academic Conferences International Limited.

Williams, B. R. (2017). Disability in the Australian workplace: corporate governance or CSR issue?. Equality, Diversity and Inclusion: An International Journal, 36(3), 206-221.

Williams, B. R., Bingham, S., & Shimeld, S. (2015). Corporate governance, the GFC and independent directors. Managerial Auditing Journal, 30(4/5), 324-346.