Corporate Governance And Sustainability Of Star Entertainment Group LTD

Strengths of the Corporate Governance Structures and Mechanisms

It has been found out that Star Entertainment group’s approach towards corporate governance is impressive and it is well supported and managed by the board of directors as well as of the management. The organization prefers to review the policies and practices of corporate governance and continues to make changes and refinement in the corporate governance structures and mechanisms. Prior to understand the strength and weakness of the corporate governance mechanisms, it is essential to mention that in time of developing the structures and practices of corporate governance, the organization consider four distinct legislations. The legislations are ASX or Australian Security changes listing rules, Corporation Act 2001, the Australian standard AS 8000-2003 and the state legislation, which governs all the licenses issued to the Star group (starentertainmentgroup.com.au, 2017). The fundamental principles, which the organization maintains in terms of corporate governance, are –

• Establishing concrete foundations for the management as well as oversight
• Structuring a board for adding values
• Act in an ethical and responsible way
• Safeguard the aspect of integrity in the corporate reporting
• Ensure timely as well as balanced disclosure
• Ensure that the rights of the security holders are considered with adequate amount of respect
• Early detection of risks and their management and
• Provide fair remuneration with complete responsibility (starentertainmentgroup.com.au, 2017).

The aforementioned fundamental corporate governance principles of SGR are indicative of the fact that, the organization pursues the internal corporate governance control. When an organization adopts the internal corporate governance principles, it is indicative of the fact that the organization prefers to monitor internal activities and thereafter pursues corrective measures in order to accomplish the organizational goals. According to the pursued review, the strengths of the applied structure of internal corporate governance control are the following –

• With the help of the internal corporate governance mechanism, the organization has obtained the power to minimize the amount of internal conflicts and fraud.
• The organization has a firm management on the recruitment and selection procedure and other management responsibilities are conducted as per the expectation
• With the help of the corporate governance mechanism of SGR, the enterprise has successfully established an inclusive and diverse workforce (Christensen et al., 2015)
• With the help of the selected corporate performance, the organization has created equal employment opportunity and a discrimination free working atmosphere
• With the help of the corporate governance mechanism, the considered organization fruitfully formulates as well as employs conventional sustainable strategies.
• The internal corporate governance mechanism of the considered organization has helped the enterprise in integrating a working culture, where people work with complete dedication and active cooperation to achieve the organizational goal
• With complete dedication and hard work of the board of directors, management and employees, the organization has improved its performance in corporate social responsibilities and quality of service. Consequently, the mechanism of internal corporate governance has increased the organization’s brand reputation (Council, 2014).

On the other hand, it has been found out from the annual report that the internal mechanism of corporate governance of the organization concentrates more on the internal aspects of the organization. According to several employee reviews and feedbacks, the organization has long working hours, which create problem for the work/life balance of the employees. Moreover, it has been also identified that employees have several times complained about repetitive customers and their disappointing behavior (Dulhunty & Lewis, 2013). At the same time, according to employee feedbacks, some time the organization vision and mission statements are not transparently translated to every employee of the organization. It means, the management, which is an essential part of the corporate governance does not properly maintains each of the principles underpinned under the name of corporate governance. Therefore, it can be also said that the organization’s corporate governance performance is not adhering the fundamental principles appropriately. Moreover, as the organization prioritize the internal governance mechanism, it can be anticipated that the organization may not have a fair set of principles to handle external governance controls like media exposure, takeover activities and public release. However, it should be also mentioned that the organization has brought a list of recommendations in the year 2011 in the corporate governance statement and according to those annual report of 2016; the organization has started obliging all the possible government legislations including the ASX (Fox, 2014).  

Weaknesses in Corporate Governance

Nevertheless, according to the considered organization’s corporate government statement of 2016, the organization has started applying the ASX listing rules. In this context, it should be mentioned that according to the ASX listing rules, in the year 2011 the organization bring a list of recommendations in order to comply with the ASX listing regulation (Klettner et al., 2014). The organization has been following the legislations and it is evident from the 2016’s corporate governance principles and recommendations, some of which are listed below –

• Use of written contracts for appointment
• Listing all the information about election and re-election
• Pursue frequent board reviews
• Maintain a nomination committee and a “board skills matrix”
• Professional development opportunities for the board directors
• Give fair remuneration and take complete responsibility
• Establishment of company secretary
• Implantation of a diverse work culture
• Pursue management reviews
• A successful audit committee
• Investors relationship program, disclosure policy and informational company websites

The aforementioned statement and its principles are indicative of the fact that the organization has entirely adopted the recommendation set by ASX and made necessary modification according to each of the principles. The annual report is evident of the fact that the organization has prepared each of the recommendations considering each of the underpinned ASX principles.  

Star Entertainment Group LTD primarily has the vision to hold the position of the leading integrated resort organization of Australia. However, at the same time, the considered organization has the aim and commitment to optimize its properties as well as to provide all time support to the communities where they operate. More significantly, the organization’s one of the fundamental purposes is to prioritize each opportunity that is presented by each of organization’s locations like Sydney, Gold Coast and Brisbane and capitalize upon those opportunities. On the other hand, in terms of environmental sustainability, the organization concentrates on the capacity of business building and constantly improvising the management of the corporate governance, social as well as environmental issues, which are relevant to the business. It has been identified that the organization’s current sustainability strategy has four distinct group objectives, which are to become leading integrated resort, to actively support the wellbeing of the guests, to attract and to retain the talent of the teams (Lama & Anderson, W. W. 2015). According to the organization’s annual report of 2016, the sustainability strategy supports the organization in developing excellent properties. Therefore, it is understandable that the aspect of sustainability fruitfully accompanies the organization’s mission and vision statement and plays significant role in establishing the brand position of the organization in the world.

In this context, it is essential to mention that in order to establish a convenient sustainability strategy; SGR conducted an assessment process of structure materiality in order to identify the potential environmental, governance and social issues, which have been relevant for the business operations for SGR. Therefore, it is understandable that the organization prefers to give utmost priority in time of formulating the sustainability strategy. Through several stakeholder consultation, online as well as market research and structured workshops each of the identified issues are assessed, evaluated and rated based on the possible risks related to them (Tricker & Tricker, 2015). The following will give a profound idea about the key achievements by the internal and external stakeholders regarding the sustainability initiatives –

Compliance with the ASX Corporate Governance Principles

The above table is indicative of the fact that the organization has been successfully growing with its aims and objectives regarding sustainability. However, according to the organization’s sustainability report, the rate of carbon emission has not reduced or increased from the year and 2014. More importantly, the rate of energy consumption from electricity as well as from the gas has increased by 2.2% from the financial year of 2015
(starentertainmentgroup.com.au, 2017). On the other hand, it is impressive to note that the organization has successfully converted more than 1690 tons of waste converted into Green electricity. However, the aforementioned accomplishments are indicative of the fact that the organization has made the strategic objective of their sustainable strategy fruitful. The above table is also indicative of the fact that in future the organization will have further scopes for more sustainable recognition of the organization. The organization has shown impressive performance in water consumption, waste reduction as well as the recycling programs. It is indicative of the fact that in future, the organization can possibly procure more initiatives for sustainability. With the help of varied water saving devices, which have been installed as part of the sustainability report, the organization has saved more than 52,282 KL of the offset increasing usage of water. It means the organization has scopes in the future to make commitment regarding fruitful sustainable approach. However, the organization has occupied a relatively disappointing carbon emission rate, which is indicative of the fact that the organization may not achieve their goal of reducing carbon emission rate to a minimum level (static1.squarespace.com, 2017).

However, it has been identified that the organization is taking and trialing new initiatives for recycling. One of such initiatives is the collection activity of the oyster shells for the purpose of ocean watch for supporting all the local marine projects and for supporting fungi metal. In this context, it is essential to mention that considering the reporting styles and initiatives of the considered organization, it should be said that the organization has considered the fundamental guideline of “global reporting”. According to the reporting principles of GRI, every organization is obliged to report their activity regarding sustainability on annual basis. Moreover, as underpinned in the GRI guidelines for sustainable reporting, the sustainability reports should be prepared with relevant details with proper presentation. After reviewing the sustainability report of the year 2016 of the considered organization, it should be contemplated here that the organization has maintained the fundamental principles of GRI of reporting sustainable activities.

 From the above paper, it is can be concluded that the considered organization is establishing itself to be a fair evident of an organization, which thrives with complete dedication to maintain social, corporal and environmental responsibilities. Most importantly, the organization has brought necessary amendment in its working culture and operations based on the rules and regulations set by the ASX.

References

Christensen, J., Kent, P., Routledge, J., & Stewart, J. (2015). Do corporate governance recommendations improve the performance and accountability of small listed companies?. Accounting & Finance, 55(1), 133-164.

Corporate Governance Principles and Recommendations. (2017). Retrieved 27 May 2017, from https://www.asx.com.au/documents/asx-compliance/cgc-principles-and-recommendations-3rd-edn.pdf

CORPORATE GOVERNANCE. (2017). The Star Entertainment Group. Retrieved 27 May 2017, from https://www.starentertainmentgroup.com.au/corporate-governance/

Council, A. C. G. (2014). Corporate Governance Principles and Recommendations, 3rd edn (ASX, Sydney).

Dulhunty, S., & Lewis, C. (2013). ASX corporate governance council consults on proposed third edition of’Principles and recommendations’. Keeping Good Companies, 65(10), 610.

Fox, J. (2014). ASX Corporate Governance Council review of’ Corporate governance principles and recommendations’. Governance Directions, 66(3), 142.

Klettner, A., Clarke, T., & Boersma, M. (2014). The governance of corporate sustainability: Empirical insights into the development, leadership and implementation of responsible business strategy. Journal of Business Ethics, 122(1), 145-165.

Lama, T., & Anderson, W. W. (2015). Company characteristics and compliance with ASX corporate governance principles. Pacific Accounting Review, 27(3), 373-392.

The Star Entertainment Group CODE OF CONDUCT. (2017). Retrieved 27 May 2017, from https://static1.squarespace.com/static/55f76728e4b0799db9586a8d/t/57c4e5f9e4fcb59389ee66df/1472521723748/TSEG_Code_of_Conduct.pdf

The star entertainment group limited 2016 corporate governance statement. (2017). Retrieved 27 May 2017, from https://www.asx.com.au/asxpdf/20160923/pdf/43bf2753z2tgjn.pdf

The star Entertainment Group, Annual Report 2016. (2017). Retrieved 27 May 2017, from https://static1.squarespace.com/static/55f76728e4b0799db9586a8d/t/57e4c4edd2b8572f422fd154/1474610431613/2016.09.23+-+2016+Annual+Report.pdf

Tricker, R. B., & Tricker, R. I. (2015). Corporate governance: Principles, policies, and practices. Oxford University Press, USA.

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