John is a non-executive director on the Board of a media public company. Jane Baxter is the Chairman. There are
John is a non-executive director on the Board of a media public company. Jane Baxter is the Chairman. There are six directors on the Board however, only one has experience in media and none have expertise in financial accounting. It seems that only 2 directors are independent.
The company is making very good profits from branching into the tobacco industry. Managers of the company have received large bonuses as a result of the good profits that have been made from this expansion. It seems that the company has built factories in areas which are at risk of flooding in the future. No disclosure has been made of this in the Annual Report.
The remuneration committee is made up mainly of non-executive directors. John is the chairman of the remuneration committee. There is also an audit committee which is made up mainly of executive directors.
John is concerned about a few issues. He is seriously considering if he should stay and try to improve matters or if he should leave. However, he likes a challenge and feels that things could be improved.
What issues are in contravention of the principles for Corporate Governance as recommended by the Australian Stock Exchange? What are the options open to John and the Board to improve the situation? Are they currently fulfilling their roles? Explain.