Enterprise Risk Management
Telstra's corporate governance analysis 2006
Telstra indicated a few important parts of the corporate governance in 2006 annual report including the board of directors, audit governance and financial reporting, risk management, and code of conduct and other policies. Firstly, Telstra currently has 8 directors on the board, and Telstra set a list of roles and responsibilities for these board members according to ASX (Telstra website). With the exception of CEO, all other board directors are non-executive directors therefore Telstra's board is mostly considered to be independent (Telstra website). The purpose of this arrangement is to ensure the board directors excepted CEO free from management, business relationship and avoid the conflict of interests thereby to act as the independent overseeing the organization. However, because they are independent and free from management and business activities, so they could be less knowledge, skill and experience of the business, thus those non-executive directors are entitled to have right of access management presentation or seek professional advices at company's expenses to fulfill their responsibilities and an investigation (Telstra website). In addition, the board of Telstra appointed Gonald G McGauchie as chairman, who is to contact with shareholders and working with CEO for board meeting (Telstra website). For example, Telstra in fiscal 2006 held the annual general meeting on 14th November 2006, the AGM deal some specific matters such as discuss Telstra's financial statement and election or re-election of directors (Telstra website).
For the purpose of Australian Corporations Act, Telstra has the auditor-general as its auditor, who owes duties to Telstra, its shareholders and commonwealth. The auditor-general appointed Ernst & Young as external auditor for filings outside of Australia (Telstra website). Ernst & Young is responsible for financial reporting rather than the auditor-general, and is...
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