Significance of the Corporate Governance Framework

Question: How it positions the firm to engage with stakeholders on local and international levels. In a global context, what ethical challenges can you see for this firm that may or may not be addressed with its current governance arrangements? Answer: Introduction Governance can be generally defined as a set of rules and regulations which regulate and control various activities of the individuals or group of individuals following the corresponding set of rules. The governance can also be defined as the set of best practices for a number of activities and tasks. Corporate governance is the concept which evolved from the application of governance in a number of industries across the world. The application of the governance concept to the organisations operating in various industries across the world allows the organisations to operate under certain sets of rules and regulations. So the term Corporate Governance can be defined as the framework which is developed and implemented by the management of the organisations to have a set of best practices and guidelines to guide all the employees working in various business functions of the organisations (Dam, 2007). This report focuses on the corporate governance implemented in the workplace of Virgin A ustralia and the various effects of the governance on various business functions of the organisation. The report will mention a number of corporate governance frameworks which could be implemented in the workplace of the organisation. Along with the various corporate governance frameworks, the report also focuses on three of the features of the corporate governance framework implemented in the workplace of Virgin Australia. The three key features which are included in this report are the remuneration practices, transparency and disclosure and social responsibility. These key features included in the corporate governance framework implemented in the workplace of Virgin Australia allow us to understand and analyse the effects of the same on the business functions at a deeper level (Carney, 2006). The remuneration practices included in the corporate governance framework of Virgin Australia defines the guidelines which the management of the organisation follows for the management of the remunerations provided to the employees working in various business processes across the organisation. The transparency and disclosure feature of the corporate governance framework implemented in Virgin Australia defines various guidelines and best practices which allows the flow of information in the workplace of the organisation to be clean and transparent. The social responsibility feature of the corporate governance framework implemented in the workplace of Virgin Australia defines the guidelines for the various corporate social responsibilities and activities of the organisation in the operating country (Tomasic, 2006). Frameworks As mentioned earlier, there are a number of frameworks which can be utilised for the development and implementation of corporate governance in the workplace of Virgin Australia. This section of the report mentions a number of corporate governance frameworks which could be used for the workplace of Virgin Australia along with the one which is already in place. From agency approach This approach to the corporate governance framework in the workplace of the organisation allows the guidelines and best practices included in the corporate governance of the organisation to focus on the benefits of the agency itself instead of the stakeholders. This approach allows the governance in the organisation to provide most of the benefits to the organisation itself instead of the stakeholders (Steenkamp, 2007). From stakeholder approach This approach of the corporate governance framework focuses on the individuals or group of individuals who are affected by the various business decisions and activities. These individuals and groups of individuals are known as the stakeholders of the organisation. So this approach focuses on the benefits of the stakeholders of the organisation instead of the organisation itself. Key features Remuneration practices This feature of the corporate governance related to the remuneration practices is known as the principle named as, Remunerate fairly and responsibly. The remuneration practices in the workplace of Virgin Australia are managed by the remuneration committee established in the workplace of Virgin Australia. The remuneration committee of Virgin Australia is a group of a number of significant people playing the roles of non-executive directors in the workplace of Virgin Australia. This remuneration committee is responsible for the development and implementation of various policies and programs related to the remunerations provided to the employees working in various business functions of the organisation (Graham, 2006). The remuneration committee focuses on maintaining fair and responsible remuneration policies in the workplace of Virgin Australia which allows the employees to maintain enough motivation to have effective and efficient completion of the business tasks assigned to them. The remuneration policies established by the remuneration committee takes a number of factors into consideration before deciding the remuneration provided to the employees working in Virgin Australia. The entire salary structure of the employees in the organisation is decided based on a number of factors which satisfied the expectations of the employees and the current market standards. This allows each of the employees in the workplace of Virgin Australia to have satisfactory remuneration provided to them against their performance in various business tasks assigned to them. The basic salary structure of the employees in the workplace of Virgin Australia is associated with a number of bonus payments and variable components. The remuneration policies included in the corporate governance framework of Virgin Australia allows the management to determine the bouquet of benefits provided to the employees along with the basic salary structure provided by the organisation. The corporate govern ance framework of the organisation allows the managers and supervisors to monitor and review the performance of the employees working in various business functions and provide bonuses to them based on their performances in the workplace of Virgin Australia (Steenkamp, 2007). The remuneration practices of the organisation is based on the decisions of the remuneration committee which follows the corporate governance framework established in the workplace of Virgin Australia. The performance of the employees are monitored and reviewed in terms of a number of goals which are assigned to each and every employee of the organisation at the beginning of the financial year. The percentage of coverage for each of the assigned goals for each of the employees define the relative performance of the employees in the workplace of the organisation. The remuneration policies of Virgin Australia allows the management to provide rewards to the employees based on their performance and completion of goa ls in each financial year. The corporate governance in Virgin Australia defines these goals of the individual employees by aligning them to the organisational goals and objectives. This allows the remunerations to be provided to the individual employees for allowing the organisation to proceed in the direction of achieving its goals and objectives (Tomasic, 2006). Transparency and disclosure The corporate governance framework implemented in the workplace of Virgin Australia defines a number of policies under the principle of maintaining continuous disclosure of information. This feature of the corporate governance of the organisation is defined as the transparency and disclosure which is related to the information flow in the workplace of Virgin Australia. This section of the report describes this feature of the corporate governance of Virgin Australia. The management of the organisation include the tasks of maintaining transparency and disclosure in the workplace of the organisation in the business responsibilities. The major guidelines included in the corporate governance framework of the organisation in relation to the transparency and disclosure feature is mentioned below. Virgin Australia aims to provide all of its employees with the clear and pure information regarding the various ongoing and planned activities in the workplace of the organisation. Virgin Australia allows all of its shareholders to have clear and accurate information regarding all the ongoing and planned activities involved in the business model of the organisation (Carney, 2006). Virgin Australia complies with a number of obligations established by the Australian Securities Exchange (ASX) in relation to the continuous disclosure and transparency. The continuous disclosure policy defined in the corporate governance framework in Virgin Australia requires all the employees in each and every level of the hierarchy to maintain the transparency and disclosure of all the information related to the business model of the organisation. The organisation ensures that all the stakeholders of the organisation get the timely and accurate information related to all kinds of business decisions and events which are significantly influential (Tomasic, 2006). The most important concept included in the continuous disclosure policy of the corporate governance framework of Virgin Australia is the definition of the market sensitive information. The market sensitive information can be defined as the information which has the potential of damaging the market position of the organisation or the market performance of the organisation is disclosed in public. So the corporate governance of Virgin Australia allows each and every employee to have the clear knowledge of all the market sensitive information which allows them to control the negative usage of the information in the market containing the competitors and customers of the organisation. The corporate governance framework implemented in the workplace of Virgin Australia involves a number of steps provided to help the employees and management of the organisation to determine the market sensitive information among a large storage of information. These steps included in the corporate governance of Virgin Australia allows the transparency and disclosure to be maintained in the workplace of the organisation, which in turn allows the employees to feel more involved in the business model of the organisation (Graham, 2006). Social responsibility This feature of the corporate governance implemented in the workplace of Virgin Australia defines the activities which are included in the business model of the organisation as the responsibilities of the organisation towards the societies of operation. This in turn allows the management to follow the guidelines involved in the corporate governance framework to carry out various social responsibilities which in turn allows the organisation to repay the societies for the various business functions carried out in the market. The corporate governance framework of Virgin Australia involves a number of guidelines to maintain the corporate social responsibilities. These guidelines allows the management to carry out a number of social responsibilities programs in the workplace of the organisation and its surroundings. This section of the report focuses on such social responsibilities of the organisation which are involved in the corporate governance framework of the organisation (Solomon, 2 007). The management of the organisation focuses a lot on reducing the emission of several greenhouse gases from any of the business functions of the organisation. The management of the organisation invests a large number of resources in the task of minimising the emission of various greenhouse gases from any of the business functions of the organisation. The management of Virgin Australia is one of most developed organisation in terms of achieving fuel efficiency in any of the business functions. The high amount of fuel efficiency allows the organisation to minimise the adverse effect on the environment (Bachoo, 2006). The organisation also is a member of a number of sustainable projects such as carbon offsetting which allows the reduction of adverse effects on the environment. Virgin Australia also carries out a number of processes, researches and programs with high amount of investments to minimise the noise pollution due to the business functions of the organisation. The organisation also carried out a number of programs to engage all of its employees and stakeholders to complete a number of tasks maximising the positive effects on the environment of the country of operation. The organisation is also investing a lot of resources in a number of other programs such as developing renewable jet fuel and fly carbon neutral, which in turn reduces the negative impacts on the environment of the entire world (Padgett, 2011). Conclusion The report described the significance of the corporate governance framework in the workplace of an organisation. The report described the effects of the presence of the corporate governance framework on the business model of the organisation. The corporate governance framework defined and implemented in the workplace of Virgin Australia was closely reviewed and analysed which allowed us to understand three key features of this corporate governance framework and its effects on the business model of the organisation. The report focused on these three features of the corporate governance framework of Virgin Australia which can be considered to be the most important features (Mendoza, 2010). References Bachoo, K., Burritt, R. L., Tan, C. W. 2006. Sustainability ratings: a social responsibility investment perspective on listed airline companies in Australia (Doctoral dissertation, School of Commerce of the University of South Australia). Council, A. C. G. 2014. Corporate Governance Principles and Recommendations. Australian Securities Exchange, Sydney. Carney, M., Dostaler, I. 2006. Airline ownership and control: A corporate governance perspective. Journal of Air Transport Management, 12(2), 63-75. 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