The Collapse of Hastie Group FreeSamples †MyAssignmenthelp.com

Question: Discuss about the Collapse of Hastie Group Activities. Answer: The collapse of Hastie Group is considered as one of the major collapse due to the drastic failure in corporate governance. The collapse of Hastie Group left many workers without job while made the creditors unsecured. It needs to be mentioned that the company did not follow eight major principles of corporate governance. They are discussed below: Principle 1: Governance Structure: According to this principle, there must be an effective board in every business organization; and the responsibilities and accountabilities of them will be clearly identified (nccg.mu, 2018). However, in case of Hastie Group, the chief operating officer of the company was involved in the conspiracy to falsify accounts (asic.gov.au, 2018). It showed that the company did not follow this principle. Principle 2: The Structure of the Board and Its Committees: This principle states that the company should have independent mindset directors (nccg.mu, 2018). However, in case of Hastie Group, ASIC indicates towards the involvement of the directors of this company in fraud and illegal activities that indicates towards the non-following of this principle by the company (directorsaustralia.com, 2018). Principle 3: Directors Appointment Procedure: As per this principle, companies are required to implement formal, rigorous and transparent process for the opponent of the directors (nccg.mu, 2018). Some of the main reasons for the failure of Hastie Group are poor management of international operations and the breach of duties by the directors. All these aspects show the non-following of this Principe by the company (directorsaustralia.com, 2018). Principle 4: Directors Duties, Remuneration and Performance: This principle states that the directors of the companies need to be complied with their legal duties (nccg.mu, 2018). The directors of Hastie Group fail to perform their duties in large acquisition process. Moreover, they were involved in various fraudulent activities to falsify the business accounts. Thus, these actions together violated this particular principle of corporate governance (directorsaustralia.com, 2018). Principle 5: Risk Governance and Internal Control: It is the responsibility of the board to govern business risks (nccg.mu, 2018). It needs to be mentioned that the risk committee of Hastie Group was largely inactive, as the board did not have any inquiring mind to enquire the fraud activities. This shows that the company did not comply with this principle (directorsaustralia.com, 2018). Principle 6: Reporting with Integrity: The board need to present the fair, balanced and understandable assessment of the financial aspects (nccg.mu, 2018). In case of Hastie Group, the financial statements of the company were presented in a falsified manned that indicates the breach of this principle (smh.com.au, 2018). Principle 7: Audit: The audit procedure of the companies needs to be conducted in the honest and independent manner (nccg.mu, 2018). In case of Hastie Group, it can be seen that the auditor of the company failed to comply with the principle of Australian Auditing Standard that leads to the violation of this corporate governance principles (smh.com.au, 2018). Principle 8: Relationship with Shareholders and Other Key Stakeholders: The companies are required to maintain a cordial relationship with all of their stakeholders (nccg.mu, 2018). The collapse of Hastie Group contributed to the loss of jobs of almost 2700 employees and the creditors become unsure about the realization of their money. Moreover, the share prices were also affected. This shows the violation of this principle. References 17-384MR Former Managing Director and former Chief Operating Officer of Hastie Services charged with conspiracy to falsify accounts | ASIC - Australian Securities and Investments Commission. (2018).Asic.gov.au. Retrieved 22 March 2018, from https://asic.gov.au/about-asic/media-centre/find-a-media-release/2017-releases/17-384mr-former-managing-director-and-former-chief-operating-officer-of-hastie-services-charged-with-conspiracy-to-falsify-accounts/ Battersby, G. (2013).Hastie directors 'may have breached duties'.The Sydney Morning Herald. Retrieved 22 March 2018, from https://www.smh.com.au/business/hastie-directors-may-have-breached-duties-20130121-2d322.html Lessons from the Collapse of The Hastie Group. (2013).Directorsaustralia.com. Retrieved 22 March 2018, from https://www.directorsaustralia.com/blog/110-lessons-from-the-collapse-of-the-hastie-group The 8 Corporate Governance Principles | NCCG. (2018).Nccg.mu. Retrieved 22 March 2018, from https://www.nccg.mu/8-corporate-governance-principles