Corporate Governance & Ethics: Leighton Holdings

Discuss about the Corporate Governance & Ethics for Leighton Holdings.

Leighton Holdings 

Leighton Holdings Australia is one of the world’s largest international contractor founded in 1949 by Stanley Leighton. It was listed on the Australian Securities Exchange in the year 1962. It has its head office in Sydney and is known worldwide for providing construction, engineering, mining, mineral process, and infrastructure services. Currently, it is working in more than 20 countries including Asia Pacific, Middle East, North America, Sub Saharan Africa and South America. It has a strength of more than 43000 employee’s across the globe. Leighton Holdings changed its name to CIMIC group Limited in the year 2015 due to Corruption allegations (Wiggins, 2015) (Our company, 2016).

Organizational Structure:

The company is providing leadership, corporate governance, and finances to its associate companies: CPB Contractor, Leighton Asia, Thiess, Sedgman, and Pacific Partnerships. The goal of the organization is to create sustainable returns for its shareholders. The operations of CIMIC are based on morality, Accountability, Development and Distribution. The company has formed joint venture with many business organizations to pursue its objectives. The chief executive officer of the company is M Fernandez Verdes. They have associated in past with the international companies to carry global projects (Home, 2016).

CPB contractors is the main contracting business of the CIMIC group. Most of its operations are based on contracting services. It was earlier a part of Leighton Holdings prior to changing its name. They have 100% stake in an Australian construction company, John Holland group. Thiess is an Australian construction company which started its operation in 1934. Thiess services is a part of Thiess group. Leighton Asia is one of the largest international construction brands has it’s headquarter in Hong Kong. It is taking prominent construction projects in Australia. Sedgman is a leading company which is dealing in design, construction, and operating mineral process. It is handling more than 170 projects worldwide. EIC Activities is providing engineering solutions and assisting CIMIC in technical and designing solutions. Ventia is a service providing company formed through the integration of Leighton contractor’s services. They are known for providing construction services around the world (Our Brands, 2016).

Governing System

The company believes in following a comprehensive procedure adhering to the corporate governance and sustainability. Risk management and compliance practices are given due care. Financial and auditing report are timely furnished to the regulatory bodies to ensure good governance practices. It is following standards and rules which provides proper support to its management and employees. It manifest high degree of corporate governance which reviews polices as per the law and discloses all its revenue, source of income in its annual report. It discloses its annual statements as per the guidelines by ASX. The processes and compliances are reviewed time to time as per the corporation act and legislations. The company follow in building positive relations with the government authority.

Governing Body:

CIMIC group believes in building an amicable relation with the shareholders. As, the shareholders are the owner of the company. It is the duty of the management to work in good faith for the benefit of the company. High level of corporate governance is enforced at each level for proper management. All its subsidiary and associated companies are working on the rules stated in the objective. The board has a responsibility to work in good faith for the benefit of the company. They are the representative of the company who takes all the major decisions. The board members and top management work together for smooth functioning. Various regulatory committees are formed as per the law and legislation. The senior management works under the guidelines of the chief executive officer. The accountability rests with the board of directors, as they are the representative of the company. The board has a responsibility to ensure whether the functions are carried in a proper manner. The company follows tiered system to review its work time to time.

The Board

M Fernandez Verdes  the Executive Chairman and Chief Executive Officer of the group. All the decision of the company are taken under his guidance. His primary responsibility is to take corporate decisions, organizing resources and operations of the company. He act as a link in between board members and other corporate operations (Directors-resumes, 2016).

R L Chenu, K I Ferguson, T Gerber, P Lopez Jiménez, D P Robinson, P W Sassenfeld , J L del Valle Pérez are the board members of the company. They are responsible to mutually take decisions in good faith under the guidance of the chief executive officer. They manage the activities of the group (Directors-resumes, 2016). 

Alternate Director

R L Seidler is an alternate director who works as a director in the absence of the main director. He is appointed to carry out the operations smoothly (Directors-resumes, 2016).

The Managing Directors

R Garrido, M Wright, M Carretta, G Mace, A Muriel, J A López-Monís, Mike Metcalfe are the managing director of the company. They are the senior most corporate executive who carries smooth administration (Directors-resumes, 2016).

Company Secretary

L S Griffiths looks after the efficient administration and manages regular compliance and statutory regulation as per the instructions of the directors and the legal norms (Directors-resumes, 2016).

Executive Leadership Team:

M Fernandez Verdes, A Valderas, A Muriel, L Interligi, J Grogan, L S Griffiths  are the part of the leadership team who manages the day-to-day work of the company. They frame the policies for the growth of the company (Directors-resumes, 2016).

Audit and Risk Committee:

It is mandatory for the public company to organize an audit and risk committee as per the regulations. Their responsibility is look good governance, reviewing integrity of the financial reporting, accounting and disclosure. They provide a sight to the management and creates relationship with the external auditors to supervise whistle blower policies and implementation There duty is to assess the risk and manage financial reporting and the internal control system (Good Governance Guide, 2014).

R L Chenu is the chairman of the committee.

K I Ferguson, T Gerber, D P Robinson, P W Sassenfeld are the other members of the committee(Directors-resumes,2016).

Remuneration and Nomination Committee

This committee is responsible for the approval of the remuneration, incentives, methodology. Their responsibility is to implement the salary scales increments, etc. The nomination committee plays an advisory role as per the information given in the charter (Nomination & Remuneration Committee Charter, 2016).

Chairman of the remuneration committee is T Gerber

The other members of the committee are R L Chenu, K I Ferguson, P Lopez Jiménez, and J L del Valle Pérez (Directors-resumes, 2016).

Ethics, Compliance and Sustainability Committee

This committee works for governing the sustainability in the company. Their main purpose is to see whether the company is following compliance measures in its day-to-day functioning. Ethics are essential for the growth of the company. In the recent time it has become an important clause for long term sustainability. The committee plays an advisory function in disposing off its responsibilities.

K I Ferguson is the Chairman of the ethics and compliance committee.

The other members of the committee are R L Chenu, M Fernandez Verdes, J L del Valle Pérez, P Lopez Jiménez, and T Gerber (Directors-resumes, 2016). 

Continuous Disclosure Committee

It is mandatory to disclose information as per the guidelines by the law and legislature. Disclosures are necessary to be made pertaining to the current law enforcement. The committee has to oversee that the information is disclosed properly on the requisite places. Disclosure committee has a duty to check whether the information they are conveying is specified as per the required norms and regulations (Disclosure and communications policy, 2014).

M Fernandez Verdes & a Valderas are the disclosure officer (Directors-resumes, 2016).

A Muriel is the chairman of the Disclosure Officer.

Sustainability:

CIMIC follows a sustainable environment. It is following obligatory rules and guidelines which are necessary for protecting the environment. Social governance is an important factor for making long term decision which would be beneficial for the public security. The group applies a holistic approach towards integrating the core concept and strength. If an organization wants to survive for a long time it is necessary to take care of the environment and the society. The focus of the report is to be committed to the environment for the long term growth of the company (Kopnina, H. &Blewitt, and J.2014).

How the Board Interact with the Top Management:

The group focuses on delivering the skilled services to the world. They are providing world class services in construction by partnering with various multinational organizations to provide services in constructions and engineering. Board regularly interact with the top management for the enforcement of the policies. Board members are responsible to implement the policies with the cooperation of the top management. The chief executive officer of the group takes decision with the board members. In case of any problem the board has to deal with the employees and the staff for implementing polices. The board has given guidelines to ensure proper work environment. Leighton holdings has its operations in more than 20 countries. It has more than 43000 employees who are working in its good faith.

Leadership

A leader is the one who is responsible to carry forward the interest of the organization. A leader should be enthusiastic, diligent. Leighton Holdings is following the corporate governance structure which is best in the world. Leadership qualities decides the future of the company. The group encourages its leaders to consistently communicate the mission and role models as per the principles. They believe in developing a strong business strategy and implementing them to provide returns to the shareholders (Our Leaders, 2016).

Auditing

It is a process of examining the fairness and correctness of the information given by the other party as per the given standards. An independent auditor ensures that the financial statement are given as per the regulatory norms (Giov, F.2015). There are two types of audit. Compliance audit check the fairness of the financial statements with respect to the norms. Operational audit measures the efficiency of the operations in the company. Auditing is essential to ensure the credibility of the financial statement and the effectiveness of the operations in the organization.

Leighton holding follows a strict auditing process for which they have constituted an auditing committee to ensure the fairness of financial statements. The auditing committee is responsible to carry regulatory framework by ensuring effectiveness of operations inside the company. Risk management:

Risk Management

Risk management is a necessary task to identify and assess the current and future risk which may affect the organization. It is necessary to take preliminary actions to assess the risk for the growth of the company. The risk management team has tailored its business as per the latest trends in the international market. It needs to adopt the risk management tools for different market. In an adverse work environment it is necessary to keep a check on the uncertainties around the world. There are different kinds of risks which arise due to the economic, political and social environment. The group focuses on the overall enhancement of the productivity by ensuring risk management (Our’s-approach.2016).

Corporate governance
Effective corporate governance is transparent, safeguards the interest of the shareholders, protect the organization against any risk. It ensures that the board of directors are exercising their fiduciary duty properly (Calder, A.2008). Corporate governance is a combination of statutory and non-statutory framework. It is the duty of the management to perform their duty in adherence with the regulations. Corporate governance is given more importance because the cost of failure is borne by the stakeholders, primarily by the shareholders (Good Governance Guide, 2014).

CIMIC has a structured corporate governance policies to ensure that shareholders do not compromise. It even make sure that every subsidiary company is following the regulations and working in the benefit of the company.

Conclusion:

This report gives the overall structure of the group. It gives information regarding its subsidiary companies and the organizational structure. CIMIC has construction processes in more than 20 countries which makes it different from the other construction company. It has a strong board and top management which ensures productivity in long term. The company has various committees which manages the internal operations and ensures smooth functioning. It is following a proper corporate governance model recognizing the needs in this competitive environment. It

References

Calder, A.2008. Corporate Governance: A Practical Guide to the Legal Frameworks and International Codes of Practice, Kogan Page Publishers

Corporate Governance, 2016. Online. Retrieved from http://www.cimic.com.au/our-approach/corporate-governance Accessed on 17 September 2016

Directors-resumes.2016. Online. Retrieved from http://www.cimic.com.au/our-approach/directors-resumes Accessed on 17 September 2016

Disclosure and communications.2014. Online. Retrieved from:  https://www.governanceinstitute.com.au/media/365559/ggg_disclosure_and_comms_policy-v3.pdf Accessed on 17 September 2016

Giov, F.2015. Auditing Essentials. Research & Education Assoc., 2015

 Good Governance Guide, 2014. Online. Retrieved from: https://www.governanceinstitute.com.au/media/651535/ggg_issues_consider-audit_risk_committees.pdf Accessed on 17 September 2016

Home.2016. Online. Retrieved from http://www.cimic.com.au/ Accessed on 17 September 2016

Investor-And-Media-Centre, 2016. Online. Retrieved from:  http://www.cimic.com.au/investor-and-media-centre Accessed on 17 September 2016

Kolk, A.2006.Sustainability, accountability and corporate governance: exploring multinations’ reporting practices. Business Strategy and Environment .Volume 17, Issue 1 January 2008, Pages 1–15

Kopnina, H. &Blewitt, J.2014. Sustainable Business: Key Issues: Issues in Environment and Sustainability. Routledge

Nomination & Remuneration Committee Charter. Online. Retrieved from: https://www.cpaaustralia.com.au/~/media/corporate/allfiles/document/about/nomination-remuneration-committee-charter.pdf?la=en Accessed on 17 September 2016

Our Brands.2016 Online. Retrieved from: http://www.cimic.com.au/our-brands Accessed on 17 September 2016

Our company, 2016 Retrieved from: http://www.leightonasia.com/en/who-we-are/Pages/default.aspx Accessed on 17 September 2016

Our Leaders, 2016. Online. Retrieved from: http://www.cimic.com.au/our-approach/people-and-careers/our-leaders Accessed on 17 September 2016

Our’s-approach.2016.Online.Retrieved from: http://www.cimic.com.au/our-approach Accessed on 17 September 2016

Profile.2016. Online. Retrieved from   http://www.cimic.com.au/our-business/profile Accessed on 17 September 2016

Wiggins, J.2015. Leighton to change name to CIMIC in wake of corruption allegations Online. Retrieved from: http://www.smh.com.au/business/leighton-to-change-name-to-cimic-in-wake-of-corruption-allegations-20150320-1m40j3.html Accessed on 17 September 2016

 

MyAssignmenthelp.co.uk believes that years of experience and high success rates have become the main reasons why students prefer our essay help services over others. It’s been a decade now that we have been helping students by providing the best quality essay writing services. Thousands of students have got benefitted from our essay writing help services. Each of them appreciates the quality of the paper they receive as well as the prices of our services. No other essay help provider can offer high-quality at such low price.