Stationeries Co. Ltd has expanded rapidly over recent years and is now looking to be listed...

  

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Stationeries Co. Ltd has expanded rapidly over recent years and is now looking to be listed on the Australian Securities Exchange (ASX). It is currently undertaking a review of its corporate governance practices and has asked for your assistance in reviewing the composition of the board. The board of directors consists of six executive directors as follows: Rodney Leung Brenda Grass Stanley Leung Arthur Crazi Iemima Gabri Purchasing Barbara Leung-Grass Personnel Chairman and Managing Director Finance Operations Sales Barbara is married to Rodney, is sister to Brenda and mother to Stanley. Brenda is the only director with financial expertise, she is responsible for internal controls and has attempted to introduce both a tightening of internal controls and an internal auditor. These attempts have been unsuccessful as the rapid growth in the business has meant that the board discuss a range of operational issues in their monthly board meetings and the internal control proposals have not been discussed. In addition, the company has been audited by CCQ Public Accountants for 7 years consecutively. The audit partner in charge of the audit of Stationeries Co. Ltd, Puddy Truti is an executive member of the Green Bowls Club together with Brenda Grass, the Finance Director. In fact the two recently returned from a tour of Neverland. Moreover, Puddy Truti was recently made an offer by Rodney Leung the Chairman of Stationeries to be on the board of directors. REQUIRED a. Discuss three possible problems with the composition of the Board of Directors of Stationeries Ltd. (6 marks) b. Discuss three changes that Stationeries Pty Ltd should consider to improve its corporate governance practices. (6 marks) C. In accordance with provisions of CLERP 9 and other reforms, explain to both Rodney Leung and Puddy Truti what they must do in order to maintain the independence sued. of Puddy Truti and CCQ Public Accountants and thus avoid being (8 marks) Stationeries Co. Ltd has expanded rapidly over recent years and is now looking to be listed on the Australian Securities Exchange (ASX). It is currently undertaking a review of its corporate governance practices and has asked for your assistance in reviewing the composition of the board. The board of directors consists of six executive directors as follows: Rodney Leung Brenda Grass Stanley Leung Arthur Crazi Iemima Gabri Purchasing Barbara Leung-Grass Personnel Chairman and Managing Director Finance Operations Sales Barbara is married to Rodney, is sister to Brenda and mother to Stanley. Brenda is the only director with financial expertise, she is responsible for internal controls and has attempted to introduce both a tightening of internal controls and an internal auditor. These attempts have been unsuccessful as the rapid growth in the business has meant that the board discuss a range of operational issues in their monthly board meetings and the internal control proposals have not been discussed. In addition, the company has been audited by CCQ Public Accountants for 7 years consecutively. The audit partner in charge of the audit of Stationeries Co. Ltd, Puddy Truti is an executive member of the Green Bowls Club together with Brenda Grass, the Finance Director. In fact the two recently returned from a tour of Neverland. Moreover, Puddy Truti was recently made an offer by Rodney Leung the Chairman of Stationeries to be on the board of directors. REQUIRED a. Discuss three possible problems with the composition of the Board of Directors of Stationeries Ltd. (6 marks) b. Discuss three changes that Stationeries Pty Ltd should consider to improve its corporate governance practices. (6 marks) C. In accordance with provisions of CLERP 9 and other reforms, explain to both Rodney Leung and Puddy Truti what they must do in order to maintain the independence sued. of Puddy Truti and CCQ Public Accountants and thus avoid being (8 marks)

Answer rating: 100% (QA)

SOLUTION a Problems with the Composition of the Board of Directors of Stationeries Ltd Lack of diversity The board of directors of Stationeries Co Ltd is comprised entirely of executive directors whic... View the full answer