Sax Co. sells insurance, and it has recently become a listed company. In accordance with corporate governance guidelines, the finance director of Sax is reviewing the company’s corporate governance practices.

Bill Bassoon is the chair of Sax. Bill vacated the chief executive position last year to become the chair of the board, and a new chief executive has not yet been found. Bill is unsure if Saxophone needs more non-executive directors. There are currently six members on the board: four executive directors and two non-executive directors. He is considering appointing one of his brothers, who is a retired chief executive officer.

The finance director, Jesse Oboe, is considering setting up an audit committee, but he has not undertaken this task yet as he is very busy. A new board director was appointed nine months ago. He has yet to undertake his board training as this is normally provided by the chief executive and this role is still vacant.

There are a large number of shareholders, and therefore the directors believe that it is impractical and too costly to hold an annual general meeting of shareholders. Instead, the board has suggested sending out the financial statements and any voting resolutions by email; shareholders can then vote on the resolutions via email.

Required

Identify and explain the corporate governance weaknesses with Sax and provide a recommendation to address each weakness.