Introduction: BuyItandSell’em and Corporate Governance Issues

Discuss about the Monitor Corporate Governance for BuyItandSell em.

The issue that has been presented in the case study is that a particular firm has been established with the name BuyItandSell’em. Now, the issue lies in the fact that there have been certain problems in regards to the different departments of the corporate entity. Moreover, the corporate governance structure of the firm has not been established. Therefore, BuyItandSell’em has approached a certain advisor for the purpose of monitoring the corporate governance structure of the company. 

The issue that has been presented in the question is that a particular case study has been provided in regards to a start-up company with name BuyItandSell’em. Furthermore, it has been asked in the question that a particular code of conduct can be developed for the purpose of enabling the organization to cover all the facets of the organization by including the office staff to the floor workers of the warehouse.

A code of conduct refers to the special guideline or book that essentially lists all the rules and regulations for the purpose of determining the fact as to how the employees will behave and act in a particular organization. It must be noted here that there are certain norms and disciplines that exist in an organization and have to be adhered by for the smooth functioning of the particular corporate entity. This can be effectively explained with the help of a particular instance. If an employee (miner) of a particular mining corporation does not wear the required outfit for the purpose of carrying out the mining activities of an organization then this will harm the employee himself. The employee will be further injured which will result in not only the ruining of the goodwill of the organization but also further hamper the working of the organization. This means that the existence of a particular code of conduct is very important for any kind of organization and varies with the nature of the organization. A particular code of conduct is also necessary for the purpose of maintaining a level of discipline in the organization. Moreover, the behavior that is expected from the employees of the organization in regards to the behavior that is expected out of them has been described in a code of conduct.

In case of BuyItandSell’em the recruitment conditions of the employees should be properly mentioned in the code of conduct. This means that the factory manager, Tony who is in charge of managing the supply chain of the organization has hired a team of sixteen staff members work very well together. The particular fact that has been highlighted in the case study is that whenever there is an absence of a particular worker, then Tony arranges for another worker who is a part of Tony’s network of friends. This should be specifically mentioned in the code of conduct that the recruitment of the staff should be carried out by an unbiased process. This means that the recruitment of the staff should be carried out in a way that no staff is recruited on the basis of a personal relationship that an individual shares with an employee of the organization. Moreover, the safety conditions and regulations of the organization should also be mentioned in the code of conduct. It has been mentioned in the case study that there have been instances of minor accidents. Therefore, proper safety guidelines should also be established for the purpose of adherence by the employees of the firm.

What is a Code of Conduct and Why is it Important?

Another factor that has been mentioned in the case study is that there have been no records in regards to Tony or any other employee visiting or leaving the organization. This means that there has been no record in regards to when an employee enters the organization and when he leaves it. Therefore, another factor that should be included in the code of conduct is that there should be proper registration of the time as to when there an employee is entering the organization and when the employee is leaving the organization. Moreover, the other incidents that have been mentioned in the case study is that at a particular Christmas party there had been an incident when a young woman had been touched inappropriately by one of the warehouse members. This is a major part of the code of conduct that should be mandatorily included. The behavior of the employees towards other employees should have been described in details for the purpose of elimination of these kinds of events in the future. Thus, it can be concluded that the code of conduct is an essential part of the management of a corporate entity and should be established from the beginning in order to facilitate the smooth operations of the firm (Aguilera & Crespi-Cladera 2016).

The key responsibilities of the directors that should be carried out by Maurice and Angelo are as follows:

• The Corporations Act 2001 defines the roles of the directors in regards to a corporate entity. The directors should act in good faith and in the best interests of the company
• The directors should result in the exercise of due care and diligence
• The conflicts between the directors should be avoided on the basis of the fact that the primary duty of the directors is to act in the interests of the company or in the personal interests.
• The duty of the directors also is to result in the prevention of the company trading while it is not being able to meet up to the due payments or when the company has been declared insolvent
• Moreover, the other duties of the director includes the task of keeping the shareholders of the company informed about the financial position of the company, the understanding of the legal obligations of the company, regulating and controlling the information in regards to the financial and non-financial performance of the firm.

It should also be noted here that the particular method that has been undertaken for the purpose of appointment of the directors should have been mentioned in the Articles of Association of the company. There are certain specific qualities that should be present in an individual for the purpose of getting elected as a director. These are that the person should not be bankrupt, should not have any past criminal records and other related facts. In regards to the particular process of removal of a particular director it should be noted here that a director can only be removed when the majority of the directors have casted their vote in the approval of the activity. Thus, these are the major points that should be kept in mind by Maurice and Angelo (Aguilera & Crespi-Cladera 2016).

The Australian Securities and Investment Commission requires the corporate entities to maintain records for about a period of seven years. Record keeping is an essential process of the organization and results in the effective carrying out of the operations of the firm. This is due to the fact that the particular process of record keeping is very essential for any kind of business entity to operate. This statement can be further evidenced on the basis of the following factors:

• Carrying out of the operations of the firm on the basis of the past records – the maintenance of the records help the management of a particular corporate entity to carry out the business proceedings on the basis of the past records. This means that the happening of the different events in the past provide the much needed direction to the directors of the company in regards to the proceeding of the particular situation. This means that the experience in regards to the operations of a firm that have been gone through in a particular accounting year will act as the reference for similar situations in the future.
• The record keeping process acts as the facilitator for the proper interpretation of the financial information that have been reflected in the accounting statements and other financial records of the firm. The records are the essential books that reflect the primary operations of the firm in regards to the financial and the non-financial performance of the firm. Moreover, the records are the primary books of reference for the investors and other users of the financial statements that use the accounting statements for the purpose of taking essential economic decisions.
• The record keeping process also acts as a primary document that defines the effective operations of the firm and is also utilized by an auditor for the purpose of carrying out the evaluation of the financial statements of a particular firm. The auditor of a firm has to carry out the sampling processes for the purpose of determining the quality and the fairness of the financial information that has been presented in the annual report of the corporate entity. This means that the record keeping process effectively results in the simplification of the operations that has been carried out by an auditor for the purpose of determining the nature and type of operations carried out by a single business entity.

Key Considerations for Code of Conduct at BuyItandSell’em

Therefore, it can be understood that the record keeping process is essential for the purpose of determining the fairness and the reliability of the accounting statements of the companies. In case of BuyItandSell’em, the particular record keeping system that should be installed in the company is that an automated computerized system should be developed for the purpose of maintaining the records of the firm effectively. This means that the installation of a computerized system in the corporate entity of the firm will result in the effective recording of the financial particulars with precision and accuracy. Moreover, the recording of the financial transactions with the help of a computerized system will result in the proper backing up of the data that has been recorded. It should be noted here that the establishment of a computerized system will result in the development of a particular department that is the IT department. The IT department will be responsible for maintaining and controlling the data that flows in and out of the company and the maintenance of the network that the corporate entity utilizes for the purpose of developing the computerized record keeping system. Another factor that should be noted by the management of the corporate entity of BuyItandSell’em is that the backing up of the data should be carried out at regular intervals for the purpose of making the record keeping system more effective in nature (Huang & Zhu 2015).

The particular process for the payment and receipt of invoices of the organization should be carried out by the installation of a computerized system in the organization. This means that every invoice or receipt of payment should be generated with the help of an alphanumeric digit that is unique in nature and has been associated with that particular invoice payment or the receipt of payment. Next, the particular alphanumeric digit will be entered in the database of the company which will result in the listing of the details in regards to that particular debtor or creditor of the company. The flow chart can be revealed as follows:

The upgrading of the payroll system will also require the help of a computerized system. A payroll software can be purchased and utilized for the purpose of resulting in the improvement of the payroll system. The payroll system should be upgraded from the use of the time cards to a biometric system. A biometric system effectively refers to the fact that an employee going in or out of the office has to press his or her finger on the scanner that will record the particular timing as to when a particular employee is going in and out of the firm.

Key Responsibilities of Directors: Maurice and Angelo

The internal control system that should be installed in the company for the purpose of establishing the effective management of the operation of the firm is that the biometric system that has been installed in the corporate entity should be monitored from time to time for the purpose of determining the fact that the biometric system has been working smoothly and without any errors (Huang & Zhu 2015).

The Workplace Relation Act 1996 defines the principles and regulations that have been established for the purpose of regulating the relationship between the different employees of the organization. This means that the workplace relation act results in the listing of the behavior of a particular individual of the organization in regards to another individual. This particular act is essential for the purpose of establishment in the corporate entity of BuyItandSell’em. This can be evidenced from the occurrence of a particular event in regards to the fact that during a particular Christmas party there had been an incident when a young woman had been touched inappropriately by one of the warehouse members. Therefore, the workplace relation act will define the behavior by the employees of the organization in regards to another individual.

Thus, the Workplace Relation Act, 1996 will be most applicable act in regards to the particular corporate entity of BuyItandSell’em.

The guidelines in regards to the reporting and the disclosure of the company has been mentioned by the Australian Accounting Standards Board that has resulted in the establishment of the standards that control and regulates the different financial particulars of a corporate entity (Huang & Zhu 2015).

The particular process that a corporation should go through in order to be established as a particular corporate entity are as follows:

• The company should at first establish itself as a private listed corporation
• Next, it should offer its shares to a public listed company or to the government
• This is due to the fact that the owning of the shares that account for more than % of the company by a public listed entity will also result in the conversion of the private corporation into a public corporation.

Conclusion

The conclusion that can be arrived at refer to the fact that the corporate entity of BuyItandSell’em has to incorporate a number of strategies and methods in order to facilitate the better working conditions of the firm by further ensuring the formation of a suitable corporate governance structure.

References

Aguilera, R. V., & Crespi-Cladera, R. (2016). Global corporate governance: On the relevance of firms’ ownership structure. Journal of World Business, 51(1), 50-57.

Armstrong, C. S., Blouin, J. L., Jagolinzer, A. D., & Larcker, D. F. (2015). Corporate governance, incentives, and tax avoidance. Journal of Accounting and Economics, 60(1), 1-17.

Huang, W., & Zhu, T. (2015). Foreign institutional investors and corporate governance in emerging markets: Evidence of a split-share structure reform in China. Journal of Corporate Finance, 32, 312-326.

Kraakman, R., & Hansmann, H. (2017). The end of history for corporate law. In Corporate Governance (pp. 49-78). Gower. Choi, S. H., & Szewczyk, S. (2018). Corporate governance structure and strategic change: evidence from major acquisitions. Managerial Finance, (just-accepted), 00-00.

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Tricker, R. B., & Tricker, R. I. (2015). Corporate governance: Principles, policies, and practices. Oxford University Press, USA.