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HB 4012004

Applications of Corporate Governance

HB 4012004

This is a free 5 page sample. Access the full version at http://infostore.saiglobal.com.

Handbook
Applications of Corporate Governance

Edited by Anona Armstrong and Ronald Francis

Victoria University

First published as HB 4012004.

COPYRIGHT
Standards Australia International
All rights are reserved. No part of this work may be reproduced or copied in any form or by any
means, electronic or mechanical, including photocopying, without the written permission of the
publisher.
Published by Standards Australia International Ltd
GPO Box 5420, Sydney, NSW 2001, Australia
ISBN 0 7337 5669 7

ii

HB 4012004

PREFACE

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In June 2003 Standards Australia published the AS 8000 series of five Corporate
Governance Standards. The Standards have been widely acknowledged in industry,
and mark an important milestone in the distillation of corporate governance
principles. This work is the result of research which applies specialised knowledge
to the topic of Corporate Governance. It is focussed upon high-level principles
designed to illustrate the application of those principles to practical situations.
This Handbook will be of interest to those seeking to understand how governance
issues and strategies are shaped by their industry context. The Handbook will be
relevant to a wide range of users, from those new to corporate governance, to those
applying the Standards in complex and challenging industry environments. The
discussion of fraud and corruption control will be of particular interest across
industry sectors.
This document is not a Standard and is therefore not intended to be prescriptive.
It is hoped that this Handbook and HB 400, Introduction to Corporate Governance,
will form the beginning of a dialog with industry enabling experiences and
information about corporate governance to be shared. Standards Australia
welcomes feedback on this Handbook, and in relation to corporate governance
issues and experiences.
Standards Australia would like to thank the following people for sharing their
knowledge and insights about corporate governance:

Anona Armstrong

Stephen Burgess

Maree Fitzpatrick

Ronald Francis

Rosemary Hill

Peter Johnstone

Dean Newlan

Roman Tomasic

Haddon Storey

Standards Australia would also like to acknowledge the editorship Anona Armstrong
and Ronald Francis, as well as the contribution of Standards Australia Committee
MB-004, Business Governance in refining this Handbook.
Mark Bezzina
General Manager Business Standards
Standards Australia International
February 2004

iii

HB 4012004

CONTENTS
Page
ABOUT THE AUTHORS ..................................................................................... v
INTRODUCTION ................................................................................................vi
Section 1 AUSTRALIAN GOVERNANCE STANDARDS THE
BUSINESS PERSPECTIVE ................................................................ 1

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Section 2 PUBLIC SECTOR CORPORATE GOVERNANCE ................................ 9

Section
3.1
3.2
3.3
3.4

3 CORPORATE GOVERNANCE IN THE NOT-FOR-PROFIT SECTOR

Introduction.......................................................................................... 19
Nature of the not-for-profit sector .......................................................... 19
Corporate governance issues for not-for-profits ..................................... 20
Conclusion........................................................................................... 25

Section
4.1
4.2
4.3

4 CORPORATE GOVERNANCE IN UNIVERSITIES

Introduction.......................................................................................... 27
Corporate governance issues for universities......................................... 30
The challenge of implementing governance standards in a university
environment......................................................................................... 35
Conclusion........................................................................................... 36

4.4

Section 5 A PROFILE OF GOVERNANCE IN THE VICTORIAN

HEALTH SECTOR A HEALTHY APPROACH?
5.1 Introduction.......................................................................................... 37
5.2 Governance Ancient origins, contemporary debate.............................. 37
5.3 Private and public sector governance .................................................... 38
5.4 The neo-liberal era and economic reform............................................... 39
5.5 A historical profile of governance Victorias public health sector.............. 40
5.6 Corporatising the governance in Victorian health services..................... 42
5.7 Clinical governance .............................................................................. 43
5.8 A united approach to finding the Holy Grail .......................................... 45
Section
6.1
6.2
6.3
6.4
6.5
6.6
6.7
6.8
6.9
6.10

6 CORPORATE GOVERNANCE IN SMALL BUSINESS

Introduction.......................................................................................... 47
The importance of small businesses...................................................... 47
Corporate governance and small business ............................................ 48
Decision making in small businesses..................................................... 48
Planning in small businesses ................................................................ 48
Business continuity .............................................................................. 49
Two case studies ................................................................................. 49
Commentary ........................................................................................ 52
The impact of the Standards on governance practices............................ 52
Conclusion........................................................................................... 53

HB 4012004

iv
Page

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Section 7 MEASURING THE EFFECTIVENESS OF THE CORPORATE

GOVERNANCE STANDARDS
7.1 Introduction.......................................................................................... 55
7.2 The good governance principles ........................................................... 55
7.3 Measuring effectiveness ....................................................................... 57
7.4 The effectiveness of AS 8000 good governance principles ..................... 60
7.5 Conclusion........................................................................................... 60
APPENDICES
A DEVELOPING AND IMPLEMENTING A SYSTEM FOR ACHIEVING
GOOD GOVERNANCE ................................................................................. 62
B THE ROLE, POWERS AND RESPONSIBILITIES OF THE CHAIRMAN,
INDIVIDUAL MEMBERS, CEO, COMPANY SECRETARY AND BOARD .......... 64
C DISCLOSURE AND TRANSPARENCY OBLIGATIONS................................... 70
D EVALUATING THE EFFECTIVENESS OF SYSTEMS TO PROTECT
THE RIGHTS AND EQUITABLE TREATMENT OF SHAREHOLDERS ............. 71
E EVALUATING THE EFFECTIVENESS OF SYSTEMS TO ENSURE
THE EXERCISE OF RESPONSIBILITIES BY SHAREHOLDERS..................... 72
BIBLIOGRAPHY............................................................................................... 73

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HB 401-2004, Applications of Corporate

Governance

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