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Business Ethics Assignment: Corporate Governance System with AMA Group

Question

Task: Choose an ASX listed company and its latest financial report. Once you have your company, you are required to research and develop a detailed report on business ethics assignment on the company, its industry and its likely governance and ethical outlook.

Answer

1. Introduction
The ethics and governance in an organisation lead to managing the overall system and support its practices. The reasons that have been including in the involuntary commitments to laws as a minimum required level of compliances, as well as protection of stakeholders' rights, are most important corporate. The chosen company for the study is AMA Group Limited. The main purpose of the report is to focus on managing the corporate governance system of the AMA Group Limited company (AMA Group, 2021). The report focuses on the analysing dependent and independent directors to analyse remuneration. The research would be done on analysing the orientation of the board for managing communication. The legitimacy theory has been discussed for identifying the impact on society and the environment on the organisation. The main outcome that can be achieved through the report is to find out the proper system that helps to manage both ethics, governance and transparency within the organisation.

Background of the company
AMA Group Limited is a locally owned public company, driving revenue from the operations as well as the development of business in the wholesale vehicle aftercare as well as accessories market. The main purpose of the organisation is to look after the smash repairer of choice that would help insurers, consumers as well as employees all across Australia and New Zealand. The business is depending on insurers, consumers and employees. The organisation repairs more than 300K vehicles per year with more than 4000 employees all across Australia (AMA Group, 2021). The organisation provides services to 200 locations in Australia. In Queensland, the organisation has 1229 employees and generates $580.88 million in sales. There are fifty organisations under the AMA Group Limited corporate family. In the year 2020, annual revenue generated was $580.88 million (AMA Group, 2021).

2020 Revenue in business ethics assignment

Figure 1: 2020 Revenue
(Source: Ama Group Limited, 2021)

The organisation strongly believes that culturally diverse as well as inclusive workplace helps to promote creativity, innovation as well as collaborating that brings better outcomes for managing businesses as well as customers. AMA has committed that industry future-proofing helps to manage actively on engaging in beginner recruitments as well as implementing training as well as diversity startand staffs benefits (Ama Group Limited, 2021). The organisation culture is to respect all employees, develop clear and effective communication, superiors’ services, enriching lives through ongoing developments. The organisation also focuses on closing the gaps that help to manage the opportunities made available for different groups including people, Indigenous Australians and disabled people. The organisation has been focusing on improving corporate governance to managing challenges of COVID-19 on business. Fiona was integral that helps in listing Mantra Groups under ASX in the year 2014. The number of government policies has been aligned with managing the current practices which have been including audit committee charter, securities trading policies, continuous disclosure policies, whistle policy and board charter (AMA Group Limited, 2021). The diversity of management needs to focus on managing the entire system which eventually focusing on identifying needs in better ways. The diversity including the gender diversity that brings the board which is needed to be appointed for ongoing processes.

2. Summary of corporate governance at AMA Group Limited
The Board of Directors has been highly responsible for security holders for corporate governance of the company by including monitoring key performance goals as well as ensuring the organisation is managing to rules and enhancing security Holder Value. The Board and Management are committed to managing the organisation's business which is needed for managing the high standards of corporate governances.

Composition of board
The board is composed of at least three directors. The majority of the directors will be independent directors. The Board will decide whether the Directors will be independent or not. Under Corporations Act Section 9 substantial shareholder of the company has been holding some of the shared-on organisation.The Board has been focusing on skills as well as expertise for ensuring to meet with the current needs of organisation.

The Board has determined that all Non-Executive Directors are independent who gets involved in judgment, deliberation and decision-making processes that are needed for contributing to the Board. As per Leath Nicholson and Simon Moore are the Non-executive Directors. Leath Nicholson has been managing with the commercial relationship with a law firm for managing the legal services to an organisation which are related to the panel and other acquisition that are needed for the growth of the business. Simon Moore has relation with the private equity investment firm with senior partners. In the rarest occasions, the organisation provides corporate advisory services for which the charges a fee. During FY20, the organisation has paid a fee for corporate advisory services which is about the acquisition of ACM parts and Capital Smart. The fees determine the arm’s length basis as well as compared to the market which is the lower end of the industry and managing it. The organisation has been focusing on managing the system which eventually needed for determining the standards of services that are going to be provided by the company. Andrew Hopkins is the Group CEO and he is not independent. The Board has measured that the particular place is needed to promote as well as maintaining independent judgment that includes Directors will be best for the company.

Remuneration report
In the year 2019, at Annual General Meeting focuses on providing the Board with the flexibility to manage remunerate, attract as well as retaining high quality with Non-Executive Directors commensurate with their skills as well as expertise that helps to increase for managing the aggregate maximum annual fee for Non-Executive Directors to $100,000 has been approving by managing the shareholder of organisation. The Key Managerial Personnel (KMP) remuneration for FY20 has been including with Remuneration Report of organisation in managing the system in better ways. Personal calculation Rule (PCR) has been assisting with Board by overseeing the organisation's nomination and remuneration policies as well as practices that can be gained for attracting retaining and motivating high-quality senior management as well as ensuring with interests that are aligned with shareholders. The PCR has been considering meeting for managing frequently that is needed for fulfilling its role effectively.

3. Board Orientation
The Board of the organisation has been highly responsible for managing responsibility of its shareholder by developing the strategy and overseeing the performance on the organization.The organization governing, the Directors have been acting in managing interests of Company as a whole. The role of senior management focuses on managing the organisation following direction and delegation of Board as well as responsibilities of the Board to oversee with activities for managing crucial duties. As stated by Deegan (2002), the Board has been highly authorised for determining with matters relating to policies, management, practices and managing operations of the company. The corporate governance has been focusing upon managing various criteria which eventually needed for presenting the ideas. The Board composition refers to managing the expected depending independent directors and dependent directors. The agency theory can be stated for managing board as anindependent director by appointing a powerful stakeholder.

Purpose and principles of board
Leadership has been aligned with cultural as well as the value of AMA. The AMA's main purpose to set strategic and financial goals. The organisation has been ensuring with AMA’s statement for values and code of conducts enunciates that wantedphilosophy which is within the organisation.

Responsibilities of board

  • The appointment and retirement of directors as well as the election of the chair of boards.
  • Appointing and removal of CEO, CFO, Company Secretary as well as reports to the CEO and determining the various terms and conditions of employment which is including remuneration.
  • Annually evaluate the performance of CEO
  • Implementing new strategic objectives to minimise challenges
  • Approving annual budget as well as monitoring the performance of the company.
  • Risk appetite in the Board expects management that helps to operate as well as ensuring
  • Remuneration policies are linked with purpose, values, strategic as well as financial management
  • Using an external audit for managing accounting and corporate reporting system
  • Approving the audited financial statements
  • Monitoring the conducts which are required for carrying out the activities
  • Appointing as well as approving the terms which are needed for managing the Board Committee
  • Organisation’s processes for balancing the disclosure which eventually needed for maintaining material information.
  • Approving dividends to shareholders

Responsibilities with the Board must at all times. The designed helps to create and building sustainable and considering Corporations Act, ASX Listing Rules and managing relevant legislation.

Delegations to management

  • Board has been delegated responsibilities and authority for management, operations and administration of the organization.
  • Strategic objectives and installing with organisation's value for managing implementation and performance in better ways (AMA Group, 2021).
  • The power of CEO for responsibilities and authority to the senior management team
  • AMA senior management is controlled by the CEO that helps to develop and implement a strategic plan which is linked with strategic and financial objectives for setting up the board.
  • The senior management team has been looking forward which leads as per the accordance withs statement of values.
  • CEO of AMA needs to provide clear information on managing the company's operations. Financial information deals with managing board receive assurances that deals with company continuous that complies upon the statutory, legal obligations, regulatory and code of conducts continuous that can be adhered for managing the entire system.

The cash generation as well as using than the management which is expected at the outset of COVID-19 pandemic. In the year 2020 June, debt was 50% that of contingent vendor considerations which were $251.9 million. The de-levered has been carrying out with the H2 FY20 which is despite difficulties operating conditions due to COVID-19.

2020 Revenue in business ethics assignment

Figure 2: Financial position
(Source: Annual Report, 2021)

Cash period has been lined up with expectations which are needed for managing equity which is required for raising $208.7 million. The funds have been used for facilitating with the acquisition of capital Smart and ACM Parts. The Groups has been increased its debt facilities to $375.0 million at the time with $340.0 that helps to draw balance date (Annual Report, 2021).

Orientation

Board composition

Board Focus

Key communication

Stakeholder and organization

Major stakeholders are independent

Shareholder focuses on the growth of the company and generating profit.

Remuneration report, income statement, balance sheet

Stakeholder- stewardship

Majority non-independent who runs the organisation and growing the assets.

Building strategies and management of capital

Chairperson’s report, cash flow and balance sheet

Stakeholder- managerial branch

The majority are depending upon the ideal that reflects upon the diversity of stakeholders

All stakeholders and management of stakeholders

Voluntary disclosure probably has been some kind of focus on CSR.

Shareholder-ethical groups

The majority independent has been ideally reflecting upon the diversity of stakeholders

All stakeholder focuses on management

Voluntary disclosing probably with some kind of focus on CSR system.

Resources

The mixture of independent and non-dependent is not crucial. Therefore, the board needs to decide which element is crucial that has been mixed of skills and contacts for securing vital resource flow asper company.

External resources flow on the management as well as capital management. Focusing on providers of resources.

Contingency has been dealing with serves which require for securing resources for the organization.

The Chair of Board with stakeholders has been playing roles within the organisation that helps to maintain effective communication and promoting constructive as well as managing relations with other board members. Chair of the board also leads the board and ensure an efficient organization and conducts for managing meetings. General meetings and specific exercise and expressing powers which are delegated for managing chair by Board from time to time. The communication with stakeholders and other shareholders (Milne & Patten, 2002). CEO manages the day-to-day operations that are needed with core value strategy, business plans as well as policies which are required for managing the system. Maintaining the risk management framework and systems that have been including internal compliances. CEO also focuses on managing the budget system and approving the final budget. The company secretary of AMA organization is assisting board regarding governance matters. The directors of the organisation have been looking for managing the system which eventually helps to focus on ethical and governance concerns.

4. Interpreting company communication by using legitimacy Theory
The legitimacy theory is basically focusing upon the disclosing the social responsibility information that helps to present with their stakeholder groups. Legitimacy theory has been based upon the ideas which are needed for managing the social exists in between the business as well as society. As stated by Deegan (2002), the legitimacy is needed to be restored which is a powerful motive than that of managing the competitive advantages as well as managing the social responsibilities. The competitive advantages for managing the entire system have been eventually focusing on identifying the necessities that are required for managing the social responsibilities which need commitments and involvements with the personal basis. The opportunities have to be large and diversified to manage the environment.

AMA Group has been depending upon an integrated management system which is concerned with quality assurance and environment which takes place. The quality of the environment can be managed through the places customers as end-user of AMA products and local community sharing environment at the centre for managing the planning as well as actions (AMA, 2021). The AMA Groups has been driven with a strong desire that helps to grow for improving social welfare as well as its employees which have been adopted that is needed to be recognised the quality management system. Integrated management aids to provideguideline with respect for objectives and strategies for adopted in line with managing the regulations as well as allowing controls of progress made. The centralized quality laboratory coordinates for managing operations.

AMA needs to take care of a series of activities which can be aimed by measuring customer satisfaction which is effective for customer acre services that can be managed as per the organisation information system. The organisation has been looking forward to managing the entire system which eventually helps to identify the necessities based on it promoting waste management by less use of disposal. As stated by Deeganet al. (2002), the maintaining liquid effluents, atmosphere and noise emission which is required for managing conditions for minimum pollution. The promotion is a systematic rationalization of electricity consumption. It also involves as well as let the employees work accordingly for adopting correct behaviour for the protection of the environment. The legitimacy of AMA can be maintained by conducting a meeting with shareholders relating to the social and environmental. The organisation has set up a new benchmark for environmental protection through the proactive procurement after implementation of new business operations and participating with industry partnerships (Milne & Patten, 2002). The organisation has introduced the Torque program for managing the collision that helps to repair businesses which is crucial for management and improving the staff with their environmental behaviours. It is also combined with the solid foundation for managing the industry experiences and considerations by using ISO 14001 needs which is an effective environmental managing system.

Conclusion
The ethics and governance of AMA Group Limited company outlook is to focus on the corporate governance and supporting its practices. The ethics and governancehave been dealing with laws and managing the organisation culture. Safeguarding is another concern that are followed by the organisation. The security of stakeholders and shareholders are also managed by the ABC company by following its ethical and governance policies. The company’s securities trading policy has been focusing on minimising the risk of actual or apparencies of insider trading which applies for staffs of organisation.The consumption of electricity has been rationalised. The main legitimacy of the organisation is to manage meeting with stakeholders regarding social and environmental perspectives. ISO14001 has been followed by the organisation for managing the environment.

References
AMA Group - Leading Automotive Aftercare & Accessories Market. (2021). Retrieved 1 January 2021, from https://amagroupltd.com/

AMA Group - Leading Automotive Aftercare & Accessories Market. (2021). Retrieved 1 January 2021, from https://amagroupltd.com/

Ama Group Limited. (2021). business ethics assignmentRetrieved 1 February 2021, from https://www.dnb.com/business-directory/company-profiles.ama_group_limited.d6f9e39f63a0a8b671ef1b4229eab44c.html

Annual Report. (2021). Retrieved 1 January 2021, from https://amagroupltd.com/wp-content/uploads/2020/08/4-FY20-Annual-Report.pdf

Corporate Social Responsibility – AMA. (2021). Retrieved 1 January 2021, from https://www.ama.it/en/company-profile/corporate-social-responsibility/ Deegan, C. (2002). Introduction: The legitimising effect of social and environmental disclosures–a theoretical foundation. Accounting, Auditing & Accountability Journal.

Deegan, C., Rankin, M., & Tobin, J. (2002). An examination of the corporate social and environmental disclosures of BHP from 1983?1997: A test of legitimacy theory. Accounting, Auditing & Accountability Journal.

Environment - AMA Group. (2021). Retrieved 18 January 2021, from https://amagroupltd.com/environment/ Milne, M. J., & Patten, D. M. (2002). Securing organizational legitimacy: an experimental decision case examining the impact of environmental disclosures. Accounting, Auditing & Accountability Journal.

Schweikart, S. J. (2019). What is prudent governance of human genome editing?. AMA journal of ethics, 21(12), 1042-1048.

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