HTD_2

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RISK MATRIX ANALYSIS FOR HDT RISK CATEGORY: DATA PRIVACY AND SECURITY 1. Data Invasion or Digital assaults - High Description Data breaches can lead to unauthorized access to, loss of, or disclosure of sensitive employee data, resulting in reputational harm and legal repercussions. Mitigation Strategies  Correction of software systems on a regular basis to fix security flaws.  Employ reliable encryption techniques for both data in transit as well as information at rest.  Regularly educate staff members and outside contractors on cybersecurity. 2. Technical Defects - High Description To remain competitive in the face of quickening technological change, HDT's HR information systems must keep up with new innovations. Products might become outdated and market share can be lost due to a dearth of technical adaptability. Mitigation Strategies  Consistent fixes and software updates.  Install intrusion detection systems.  Create a strategy for handling incidents. 3. Regulative Non-Compliance - Moderate Description: Violations of laws concerning data privacy, such as the GDPR and CCPA, may culminate in costly penalties and other legal repercussions. Mitigation Strategies Construct a specialized compliance team to oversee and guarantee compliance with data privacy rules as one of the mitigation initiatives.  Consistently evaluate and revise privacy rules and practices.  Perform regular assessments and audits of compliance.

4. Intrusion Concerns - Moderate Description Employees or contractors with bad intentions or unintentional carelessness might jeopardize data security. Mitigation Strategies  Use restrictive permissions and access limits.  Verify a person's hiring history and that of any subcontractors.  Keep an eye out for unexpected behavior by auditing and monitoring user activity. 5. Distributor and Outsourcing Risks - Moderate Description Utilizing offshore service providers exposes companies to more operational and geopolitical risks. Mitigation Strategies  Comprehensively investigate the compliance and security practices of offshore service providers.  Create backup plans in case of disruptions brought on by political or operational concerns.  Keep open lines of contact with offshore partners. 6. Sustainability Challenges - Low Description Neglecting sustainability practices might affect the brand and stakeholder confidence of the organization. Mitigation Strategies  Create thorough sustainability policies and procedures.  Interact with stakeholders to learn about their sustainability anticipations.  Carry out periodic checks of sustainability. BOARD MEMBERS' PERSPECTIVES

Divya, Ram, and Amir’s view is that the board's makeup lacks independence may fail to take into consideration potential conflicts of interest, which might result in biased decision-making. For impartial monitoring, the board must be expanded to include independent members. Myra’s emphasis on using AI to reduce staff numbers could not take the moral ramifications and employee well-being into account, which might be a danger for employee happiness and retention. Despite the fact that Edward has full confidence in Amir, it is imperative to make sure that he continues to participate in financial supervision and decision-making since independence is necessary for efficient governance. Jack's worry about sustainability draws attention to a possible issue that the board has to take more seriously. Maintaining stakeholder trust requires a comprehensive approach to sustainability. ADDITIONAL RISKS 1. High risks to reputation and ethics The business's image and stakeholder confidence may suffer if ethical issues around data outsourcing and operations overseas are not addressed. Mitigation Strategies  Establish and stick to rigorous moral standards for activities, particularly those that take place overseas.  Periodically inform stakeholders of the company's ethical commitments.  Create procedures for handling complaints and ethical issues. 2. Concurrence and Market Risks Risks associated with concurrence and market conditions are moderate and might result in revenue loss and market share loss in the HR technology sector. Mitigation Strategies  Constantly develop new technologies and improve the HR technology platform.  Keep an eye on developments in the marketplace and adjust to shifting consumer wants.  Expand your product selection to appeal to bigger businesses. The result of a thorough risk matrix analysis for Human Data Technology Pty Ltd (HDT) emphasizes the need of proactive risk mitigation techniques by highlighting a few significant data privacy and security threats. A consistent approach to governance and risk management is crucial, even though board members' opinions, particularly with regard to board independence and sustainability, provide varying positions. To ensure HDT's long-term success, it is also critical to address the other risks that have been identified, such as reputational and ethical issues and market competition hazards. HDT can create a solid basis for dependable and sustainable operations while preserving its reputation and stakeholder

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confidence by giving priority to data security, regulatory compliance, technical flexibility, and ethical concerns. 2. Board Relationships and Governance Analysis at HDT HDT is a human resources technology firm with expansion goals. It is necessary to solve a number of governance-related challenges, nevertheless. As a framework, we will use ASX Corporate Governance Principles 1, 2, and 5 to analyze the perspectives and connections among the board members as well as their potential influence on governance and decision-making. The aforementioned instructions are essential for encouraging openness, responsibility, and long-term thinking in corporate decision-making. ASX Corporate Governance Principles Principle 1: Establish a Firm Foundation for Management and Oversight This concept emphasizes the significance of an efficient board with distinct jobs and duties. To guarantee efficient monitoring, it is recommended that the board be diversified and made up of directors who are independent. Principle 2: Structure the Board to Add Value This concept emphasizes the constituency of the board, encompassing the appropriate mix of knowledge, experience, and independence to help with decision-making and the continued achievement of the business. Principle 5: Provide Timely and Balanced Disclosure This concept emphasizes the need of prompt and accurate information disclosure to shareholders and other stakeholders in order to foster confidence and credibility in the business. Analysis of Board Relationships and Governance 1. Independence and Board Composition The founders of HDT and a few independent board members make up the majority of the membership. While the company's founders Amir, Divya, and Ram have contributed significantly to its success, the board of directors exhibits a glaring lack of independence. Conflicts of interest may arise in the lack of independent directors, thus jeopardizing sound judgement. To remedy this, HDT has to think about hiring more independent members who can provide the board new viewpoints, objectivity, and knowledge. 2. Competence and diversity Most of the board members are either closely connected to one another or have long-standing personal and professional contacts, which results in a lack of diversity in the board's makeup. This

uniformity could encourage groupthink and prevent the board from considering a variety of viewpoints. The board should actively look for directors with a variety of backgrounds, abilities, and experiences, such as those with knowledge of technology, human resources, and corporate governance, in order to improve governance practices. 3. Interest Conflict Ram Bhatt is current board chair in addition to being a co-founder and previous sales executive. Potential conflicts of interest may arise because of his dual roles as a founder and board chair, since he may put the interests of the founders above those of other shareholders. The board ought to speculate about electing an impartial chairperson to serve as the board's leader and guarantee fair decision- making in order to lessen strain. 4. Openness and Disclosure Concerns regarding openness are raised by Amir's statement about postponing the notification of data breaches and events. The timely and fair disclosure of information is a requirement for HDT (Principle 5). The trust of shareholders and stakeholders might be damaged by a delayed or non-disclosure of such situations. For the sake of upholding integrity and safeguarding the reputation of business, board should develop precise procedures for managing and swiftly revealing such situations. Proposed Strategies to Enhance Governance Practices 1. Designate Independent Directors: HDT could add more independent board members who additionally can offer unbiased monitoring and a range of viewpoints. By addressing obstacles of interest, the board's competency and independence will be improved. 2. Split CEO and Chair Roles: The CEO and board chair positions should be distinct to reduce conflicts of interest. The board can be led by an impartial chairman who will see to it that actions are taken in organization's and all shareholders' most favorable manners. 3. Execute Comprehensive Governance Policies: The business should create and put into practice comprehensive governance policies and procedures that are in line with ASX standards. These instructions ought to address topics like transparency, morality, risk management, and sustainability. 4. Foster Diversity: The board needs to deliberately look for directors with varied endures and expertise sets, as this may result in a more comprehensive and creative decision-making process. 5. Improve Disclosure Practices: To preserve openness and foster a sense of confidence among shareholders and stakeholders, HDT has to create clear standards for incident disclosure and continuously uphold these standards.

3. Application of Sustainability Practices for Human Data Technology Pty Ltd (HDT) Sustainability is an essential element of corporate governance that goes beyond energy use and equipment usage. Stakeholder involvement, social responsibility, and ethical supply chains are all included. For Human Data Technology Pty Ltd (HDT), there are a number of sustainability-related areas that require development in order to establish a reputation for being a dependable and reputable business. Current State of Sustainability Practices 1. Engagement of Stakeholders Stakeholder involvement is a notion that extends beyond business success. HDT has obligations to its clients, staff, and the regions in which it conducts business in addition to its shareholders. To interact with each of these stakeholders, the organization must develop a defined strategy. Recommendation To learn about stakeholders' issues and expectations, HDT ought to think about organizing frequent stakeholder engagement events, polls, and feedback systems. The business may establish trust and make sure that its activities are in line with the interests of all parties by including stakeholders in the process of making decisions. 2. Ethical Supply Chains The legal expert Jack Vertigan made a good point in pointing out the need of sustainable supply chains. Whereas HDT might not have a sizable manufacturing activity, it needs make sure that its suppliers and service providers follow moral guidelines. Recommendation Make that offshore service providers are held to the same standards of morality and respect for human rights by doing rigorous due diligence on them. HDT's supply chain may be protected from exploitation and unfair labor practices with the aid of routine audits and evaluations of these suppliers. 3. Social Responsibility In order to be sustainable, HDT must make a beneficial impact on the areas where it operates. The goal is to have a positive social effect through the company's efforts, not just to reduce energy usage. Recommendation In places where they have a sizable presence, HDT should start community involvement initiatives like educational alliances, employment development, or assistance for regional charity. In doing so, the firm will show that it is socially responsible and foster a favorable reputation in the neighborhood. Addressing Stakeholder Concerns

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Addressing these sustainability issues also involves considering the perspectives of board members: 1. The Board's independence Despite the fact that HDT's founders have a clear vision for the company, good corporate governance requires an impartial board. By preventing clashes of interest, it guarantees unbiased decision-making. In the context of sustainability, where ethical considerations shouldn't be undermined, this is especially pertinent. Recommendation To give direction and supervision in these areas, HDT should think about hiring more independent directors who have experience in sustainability and ethics. These directors will be able to aid HDT in finding a balance between development and moral responsibility. 2. Offshoring and Worker Welfare Offshoring is a legitimate economic approach, but HDT shouldn't ignore the health and well-being of all of its employees, including those who work abroad. The significance of guaranteeing equal treatment and moral working circumstances for all employees, wherever they may be, should not be overshadowed by Myra Winchip's viewpoint on employee availability. Recommendation Implement international labor standards to provide fair pay, secure working conditions, and career advancement chances for offshore personnel. In cooperation with outside experts, HDT should routinely evaluate and keep track of these requirements. 3. Understanding of Sustainability Jack Vertigan has increased understanding of the value of sustainability as a comprehensive idea. It is necessary to answer the board's doubts regarding its applicability. Recommendation The board and staff of HDT should be informed on the larger implications of sustainability, which go apart from energy and equipment. Workshops, seminars, and expert testimony may assist the board in comprehending how sustainability is an essential component of establishing trust and upholding a solid reputation.

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