Introduction
“The Downer Group is one of the largest providers of engineering and infrastructure services in Australia. It is a diverse provider of engineering and infrastructure services in the fields of rail, road, energy, telecommunications, and resources”. Downer Group has around 53,000 employees and operates in more than 300 locations in Australia and New Zealand.
This essay will provide an analysis of how the Downer Group’s governance structure, external environmental factors, business practices, and functional departments are influencing its performance and decision-making. The aim of this essay is to provide an overview of the Downer Group and its corporate governance, as well as an analysis of the external and internal factors that affect the company’s performance and decision-making.
Case Organization Synopsis
“The Downer Group is a publicly-listed company listed on the Australian Securities Exchange (ASX). The company was founded in 1869 and is one of the oldest and largest engineering and infrastructure services companies in Australia and New Zealand”. The Downer Group has operations in the transport, energy and resources, utilities, and communications markets(“Downer Group”). The company’s core services include asset management, engineering construction and maintenance, technology and management services, and other services. The group’s operations span across Australia, New Zealand, and other countries including the United Kingdom, Ireland, South East Asia, and the Pacific Islands. The Downer Group is committed to delivering customer-focused solutions that meet the needs of its customers.
Governance Structure
Key Concepts
Corporate governance is a set of rules, regulations, and processes that guide the operations of a company(Mees & Smith, 2019).It includes the organisations, procedures, and connections that dictate how the company's goals are set, how they are to be achieved, and how performance is to be tracked. Corporate governance is the study of an organization's management practises and the duties of its managers.
Theoretical Framework
The theoretical framework of corporate governance is based on the principles of accountability, fairness, transparency, responsibility, and integrity(Tabassum & Singh, 2020). The primary objective of corporate governance is to ensure that the interests of shareholders, stakeholders, and other interested parties are respected and protected. The goal is to make sure that the business is run in a way that benefits all of its constituents, including shareholders, staff, and the general public. Additionally, corporate governance is to make sure that the company's operations are carried out in line with its own internal policies and procedures as well as statutory and regulatory obligations.In order to help ASX-listed firms comply with their obligations under the Corporations Act 2001 (Cth) and other pertinent laws, regulations, and standards, the ASX Corporate Governance Council has created a set of Corporate Governance Principles and Recommendations (the "Principles"). The Goals of the Principles are to Protect Stakeholder Interests and Promote the Effective Operation of the Corporate Sectorr.
Downer Group’s Governance Structure
“The governance structure of The Downer Group was created to make sure that the business activities are carried out in accordance with the highest standards of corporate governance”.
• The Board: The role of the Board of Downer Group is to provide leadership, effective oversight and direction to the company. The Board of Directors is made up of independent non-executive directors and executive directors(Alyousef & Alsughayer, 2021).The Board is comprised of a Chairman, a Managing Director, and seven independent Non-Executive Directors. The Board has established formal written charters for each of its committees, and outlines the roles and responsibilities of each Director.
• Board Committees: Four Board Committees have been formed by the Board to help it carry out its responsibilities. All Committee hold meetings at least four times a year, and each Committee is led by an experienced Non-Executive Director.
• Management:“The management team of Downer Group is responsible for the day-to-day operations of the company(Bishop, 2018)”.
Ensuring the Effectiveness of Corporate Governance Downer Group has implemented a range of measures to ensure the effectiveness of its corporate governance. These measures include:
• Establishing a clear corporate governance framework: The company has established a corporate governance framework that includes a code of ethics and corporate governance policies and procedures.
• Developing a risk management strategy: Downer Group has developed a comprehensive risk management strategy that is designed to identify and manage potential risks. This strategy is regularly reviewed and updated to ensure that the company is addressing any potential risks.
• Establishing an internal audit function: Downer Group has established an internal audit function that is responsible for conducting internal audits and supplying unbiased assurance of the performance of the company's internal control systems (Hansen, Mowen & Heitger, 2021).
External Environmental Factors
Key Concepts and Theoretical Frameworks
The Australian Securities Exchange (ASX) is the largest and most actively traded stock exchange in the country, providing a platform for businesses to raise capital and investors to buy and sell shares. It is governed by the Australian Securities and Investments Commission (ASIC) and its performance can be affected by a number of internal and external factors.
• One of the key concepts to consider when analyzing the performance of the ASX is the concept of external environmental factors. External environmental factors refer to the external environment in which a business operates and the conditions that can affect its performance. These factors can include economic conditions, political and regulatory environment, technological advances, customer preferences, competition and global market trends.
• The other key concept to consider when analyzing the ASX is the theoretical framework. A theoretical framework is a set of assumptions and theories that provide a model for understanding the relationship between different variables. This framework can help to identify potential relationships between external environmental factors and business performance.
External Environmental Factors: External environmental factors refer to external influences or forces outside the organization that can affect the organization’s and decision-makingand performance (Settembre-Blundo et al., 2021).
External Environment: The external environment is the conditions and factors that exists outside of an organization or business and that have an influence on it(Bocken & Geradts, 2020). It includes factors such as economic conditions, political conditions, social and cultural conditions, technological conditions, and legal and regulatory conditions.
Analysis of External Environmental Factors
• Economic Conditions: The economic conditions of the countries in which Downer Group operates will have an impact on the company’s performance and decision-making. Economic conditions such as GDP growth, unemployment, and inflation can influence the demand for the company’s services, as well as the cost of its inputs(Ballantyne et al., 2021).
• Political Conditions: The political conditions in the countries in which Downer Group operates will also influence its performance and decision-making. Changes in government, changes in taxation and other government policies, and changes in government spending can all have an impact on the company’s operations.
• Social and Cultural Conditions: The social and cultural conditions of the countries in which Downer Group operates will also have an impact on the company’s performance and decision-making. These conditions can influence the demand for the company’s services, as well as the willingness of customers to purchase its services.
• Technological Conditions: The technological conditions of the countries in which Downer Group operates will also influence its performance and decision-making. Changes in technology can open up new markets for the company, as well as provide opportunities to reduce costs and improve efficiency.
• Legal and Regulatory Conditions: The legal and regulatory conditions of the countries in which Downer Group operates will also have an impact on the company’s performance and decision-making. Changes in laws and regulations can have an impact on the company’s operations, as well as the cost of doing business(Lobschat et al., 2021).
The Downer Group is affected by a range of external environmental factors that can influence its performance and decision-making. These external factors include economic, legal, technological, legal, Environmental and political factors.
Impact on ASX Performance
The external environmental factors discussed above will all have an impact on the performance of the Australian Securities Exchange (ASX). Economic conditions, political conditions, social and cultural conditions, technological conditions, and legal and regulatory conditions can all influence the performance of the stock exchange and the decisions of investors(Gupta, 2022). Changes in any of these factors can lead to changes in the demand for and supply of securities listed on the ASX, which can lead to changes in stock prices.
Conclusion
The external environmental factors, governance structure of the Australian Securities Exchange (ASX), and corporate governance have all had a significant influence on Downer Group’s performance and decision-making. The company has had to continually monitor the external environment and ensure that its operations are in respect for the nation's legal and regulatory standards.The governance structure of the ASX is designed to ensure the effectiveness of the organization’s corporate governance. The ASX has a number of committees and sub-committees which are responsible for overseeing the operations of the organization. The ASX also has a Corporate Governance Code which sets out the standards and practices to be followed by the organization. It is important for Downer Group to continually monitor its external environment and to ensure that its operations are inrespect for the nation's legal and regulatory standards. It is also important for the company to adhere to the best practices of corporate governance in order to ensure the effectiveness and accountability of its operations. This will ensure that the company is able to remain competitive and efficient in the long run.
References
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