Costa Group Holding Limited: An Overview Of Corporate Governance And Risk Management

Company Overview

The company Costa Group Holding Limited deals in the horticulture sectors. The company usually deals in the production of mushrooms, blueberries, raspberries, glasshouse grown tomatoes, citrus and much such healthy fruits which are found in Australia. The company also deals in the marketing and packaging of products in order to export them and it also provides the facility to store its products in their warehouses which makes it easier for them to deal in the international markets. It has basically four different product lines which are berries, mushrooms, glasshouse grown tomatoes, and citrus. The company also produces and sells avocado and bananas on a national scale. This results in the company to earn profits from both the national and international markets.

1.    The efficient top management structure

The performance of the board was analyzed by the internal review system during the financial year. The top management structure of the company monitors the directors and other executive committees with the help of a review system or survey. This review or survey provides the company information about its working system and also make it aware of any types of suggestions for improvement and details company analytics. Even after conducting the internal reviews the firm still initiates an external review through which it intends to find the state of the business and also checks the performance of the firm. These external reviews are conducted on a periodical basis of once in every three years (Costa group Holdings Ltd CG, 2017). Every employee in the Costa Group Holding Limited is being provided with a specific responsibility and role which the company needs to check if done in a proper manner or not. The goals and the objective are set at the starting and then at the end of the financial year, it is evaluated that the objectives of the firm are met or not.

1.    Protection of the integrity of financial reporting

The top management structure has set up an internal audit and risk committee which will help it to analyze the firm’s financial structure in a much-elaborated manner. The committee generally looks after the social integrity of the firm’s financial structure and also analyzes the appointments, remuneration, independence, and competence of the firm. They also help the company to analyze and manage the internal risks that are prevailing in the financial structure of the firm. The company is also liable to pay duties and taxes under the legal and regulatory requirements which are also checked by such auditors. The audit risk committee of the Costa Group Holding Limited consists of three major non executive directors who help the firm in the process of decision making.

1.    Creating an effective foundation for the management

Board Performance and Responsibilities

Costa Group Holding Limited is having a very rigid and informative risk management system. The management system believes that the controls, principles, systems, methods and the techniques of the risk management task should be carried out by the committee in a very soothing manner. These management operations were approved by Costa Group Holding Limited in earlier years. The change in the interest rate and the value of the curries also affect the financial position of the firm, hence a safeguard should be used in order to protect the firm form any of such risks. The Costa Group Holding Limited has divided its board into two main categories which are divisional board and the board committee (Costa group Holdings Ltd CG, 2017). These committees play a vital role in performing the risk management task for the firm by protecting the firm’s identity and the cultural needs. Thus for the protection of the firm’s environment, the Costa Group Holding Limited has employed a lot of effort in its risk management strategies.

1.    Performing morally and responsibly

The company is obliged to work in an integrated and ethical manner so that the code of conduct which has been set by the top management structure will be properly maintained. The code of conduct maintains each and every company’s ethical and political standards. The firm has also been trying to maintain the whistleblower strategies which will be helpful for the firm to maintain integrity and honesty (Needles & Powers, 2013). The company has also maintained a group which deals with the securities and shares of the financial market so that all the products of the company stay available in the industry (Costa group Holdings Ltd CG, 2017). The company also strives towards adopting the diversity policies which are very helpful at the time of completion of the tasks in a proper and timely manner.  The company also tries to maintain equality between its employees so that no one would feel different and thus a peaceful environment will prevail in the firm (Edward & Moutchnik, 2013).

1.    Management of the risks

In order to evaluate the risk trends of the firm and take effective measures, Costa Group Holding Limited transfers all its risks to the reinsurers and external insurers. Each of the system maintained by the company is managed by a proper planning system. This makes it important for the firm to have a proper SWOT analysis and a pre-planned system to prevail within the firm. The company tries to maintain the peace by having a proper risk managing system (Costa group Holdings Ltd CG, 2017). The company gets all the information relating to the risk with the help of the risk committee and thus stays protected from it. The audit processes also help the stakeholders to be protected as because of the disclosure principle followed by the company.

1.    Facilitation of the balanced and timely disclosure.

Risk Management Strategies

The company has been following the principle of disclosure which states that nothing should be kept hidden from the customers or the government. The company agrees with all the announcements and thus makes a factual decision. The company is also required to maintain the ASX corporate governance principles. The disclosure principle is very important for the stakeholders because the principle stats that all the financial operation which have been made by the firm needs to be stated in the charter which can be assessed by the shareholders to make decisions regarding the investments they will be making in the firm (Fraser, 2011).

1.    Remunerating responsibility and fairly

The company human resources department assists and advises the board in making several important decisions. The company is always helped in accordance with the management of the advising board committee. The remuneration committee consists of three nonexecutive managers who are having independent nature of functioning and they have been serving the company for very long which makes them reliable.

1.    Respecting the rights of the shareholders

The company believes to maintain good relationships with its shareholders. All the major announcements and the changes are being made aware by the firm to the shareholders because the firm states that nothing should be kept hidden from the customers of the firm. The entire audit and the financial data are being provided to the shareholders as they can analyze the information to make the decision whether it should make investments in the company or not (Geoffrey, 2016). The company sends the annual or quarterly reports to the customers so that they can analyze it. Shareholders can receive the information through the electronic communications or they can receive booklets containing all the necessary information of the firm (Leo, 2011).

There are various risks like the social, legal, financial, strategic, operational, etc. that may be undertaken by the firm during the time of performing business operations. The financial risks of the firm relate to the lack of the capital funds, liquidity, change in the currency values and the insolvency. These risks can only avoid by setting up the internal statutory auditors and also many other field experts so that the objective of the business will be achieved successfully (Gay & Simnet, 2015). The company should also try to adopt new and improved technological measures which may prove to be very profitable as the new software helps to keep the record in a particular manner and also the risk of losing the data is removed. The financial records assessed by the auditors should be correct and also the auditor should keep in mind that his opinions and data are not neglected (Elder et. al, 2010). The auditors in order to make accurate decisions can use the ratios present in the financial statements and also he can take a look at the operating expenses and the revenue generated by the firm. During the analysis of business risks, the company seeks to evaluate all the possible events that may cause a change in the environment of the firm, or the business may be affected by the use of such events (Laux, 2014). The company uses the risk management tool in an adequate and integral way and thus the management and the governance of the principles are done in a pleasant manner. The auditor can have an assessment of the financial ratios and provide a judgement on the financial performance of the company. Moreover, the risk impending towards the organization can be known with the help of ratio assessment (Goodstein, 2011). From the ratios it is observed that the company is evenly balanced as the profitability is balanced and liquidity can help the business to meet the obligations.

Conclusion 

From the overall analysis and report, it can be commented that the company has adhered to all the principles of corporate governance. In addition, all the details are available in the corporate governance statement leading to a proper disclosure. Further, the risk assessment of the company denotes that the auditor can play a major role in the risk assessment. The ratios can be referred to provide a valid decision on the performance of the company.

References

Costa group Holdings Ltd CG. (2017). Costa group 2017 Corporate Governance Statement 2017 [online]. Available from:  https://investors.costagroup.com.au/FormBuilder/_Resource/_module/YfnrttzbYEyUJyNrb86SEg/file/report/corporate-governance-statement-2017-final.pdf [Accessed 4 May 2018]

Edward F & Moutchnik, A. (2013). Stakeholder management and CSR: questions and answers. Oxford Press

Elder, J. R, Beasley S. M. and Arens A. A. (2010) Auditing and Assurance Services. Person Education, New Jersey: USA

Fraser, C (2011). The Oxford Handbook of World Philosophy. Oxford University Press

Gay, G. and Simnet, R. (2015)  Auditing and Assurance Services. McGraw Hill

Geoffrey D. B, Joleen K, K. Kelli S. and David A. W. (2016) Attracting Applicants for In-House and Outsourced Internal Audit Positions: Views from External Auditors. Accounting Horizons. [online] 30(1), pp. 143-156. Available from https://doi.org/10.2308/acch-51309  [Accessed 4 May 2018]

Goodstein, E. (2011).  Ethics and Economics, Economics and the Environment. Wiley

Laux, B. (2014) Discussion of The role of revenue recognition in performance reporting.  Accounting and Business Research. [online]. 44(4),  380-382. Available from

Leo, K. J. (2011). Company Accounting. Boston:McGraw Hill

Needles, B.E. &  Powers, M. (2013) Principles of Financial Accounting. Financial Accounting Series: Cengage Learning.

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