AGL Energy LTD (AGL)

Accounting Research Project – ACC

Part – 2 :Case Study (400 Words excl. reference)

With a particular stakeholder (Share Holders of AGL) group in mind, select a listed Australian company (AGL Ltd) of your choice. Refer to your chosen company’s annual reports and also information from other sources for e.g., websites. Identify three current corporate governance practices/mechanisms in place of the company including the board of directors and board sub-committees structure, risk management, directors and Chief Executive Officer’s remuneration. Critically analyse the current corporate governance practices by the company in light of the corporate governance practices recommended by Australian Securities Exchange Corporate Governance Council which is known as ‘Corporate Governance Principles and Recommendations 2014(ASX CGC 2014). Explain fully how the company’s corporate governance structure could be improved (where necessary) by following the ASX CGC 2014 guidelines. You are expected to identify three major issues of corporate governance facing your chosen company, apply discipline knowledge, provide evidence-based knowledge, suggest recommendations for improvement and support all assertions with references. As an example, your report may grouped under the following headings (although you may include additional headings also):

  • Introduction (30-40 words)
  • Current corporate governance practices in place (Pls see attached PPT)
  • Critically analyze the current corporate governance practice (Pls see attached PPT)
  • Explain fully how the company’s corporate governance structure could be improved (Pls see attached PPT)
  • Conclusion (20-30 words)
  • Reference (Chicago style only) (5-6 at least)

Research Project Report Format:

The assignment must be:

l in 12-point Times New Roman font
l single-spaced with 1-inch margins,
l printed single-sided in A4-sized paper, and l use paragraphs (not dot points).

The maximum number of words for your answer for Case Study is 400 words (word count excludes references and appendices).

Do not exceed the word limit or use inappropriate formatting such as using smaller font size, 1.5 line spacing, or narrower page margin, etc. Note that it is the quality, not the length of the report that determines the grade of the assignment.

Referencing:

Chicago Referencing Style. All your references must be properly cited in your content and included in the reference list at the end of report.

Introduction

The corporate governance for AGL Energy Ltd is one of the most important aspects that encompasses the processes and structures control and direction of affiliate companies. For AGL, the corporate governance revolves around the relationships between AGL’s shareholders, the board of directors and all levels of management. 

Current Corporate Governance Practices

One of the current practices in AGL corporate governance is focusing on the sustainability of the business, which was identified in the 2015 annual report for the consideration of the responsibility that the customers, employees, stakeholders, the environment and the community have placed on the business (Bebchuk, 2015). Other two practices that have been under the watch of the corporate government include affordability of the products and risk management. Risk management is the core practice of AGL corporate governance, with the aim of reducing reputation and investment risk as stipulated in the AGL ASX 2015 (AGL 2015 Corporate Governance Statement, 2015). The corporate structure has been broken down to the Board of Directors, committees, CEO and directors with the remuneration done fairly and responsibly. AGL Board establishes the practices through delegation of duties to the Committee, whose structure is broken into four to oversee the current practices. They include nominations committee, safety and sustainability committee, risk and audit committee and performance committee.

Major Issues The three top issues that AGL corporate governance is facing include unethical responsibility evident in the ASX 2015 recommendations…

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