Work through the NZ Corporate Governance Code and identify any concern in the following case John Costa started Milan Ltd 20 years ago he is therefore CEO and Chairman of the board . His family members occupy 5 of the 7 board positions as they all work in the company and all have executive roles. He heard that he should also have an independent director on the board and decides to appint hisbest fiend Jill as she ahs always told him the thruth and not what he wants to hear. Thi swill be a good appointment because otherwise an independent person may not have any commitment to the company Johns daughter Suzy, who is executive director interanl audit was told by the previous auditors that they should have an audit committeeand was very annoyed as she feels she has been ding a great job, Last year the staff member working for her entered a local business competition and Suzy won an award for the most admired boss. Recently the company has faced some petitioning on its door step as members of the community claimed there stakeholder rights are being compromised owing of the amount of non treated water Milan spills into the river and accused Milan of not being a good corporate citizen. John’s son beieves these are irrellavant issues which can be ignored and is just driven by jealousy of his father’s wealth. Jack assured his father the only person that must have a say in the organization is his father “ after all you did create Milan Dad” and the way you have controlled meetings and made all the appointments over the years have resulted in huge profits. “ As you always said Dad at the end of the day there is only one thing that matters PROFIT!”
Work through the NZ Corporate Governance Code and identify any concern in the following case
John Costa started Milan Ltd 20 years ago he is therefore CEO and Chairman of the board . His family members occupy 5 of the 7 board positions as they all work in the company and all have executive roles. He heard that he should also have an independent director on the board and decides to appint hisbest fiend Jill as she ahs always told him the thruth and not what he wants to hear. Thi swill be a good appointment because otherwise an independent person may not have any commitment to the company
Johns daughter Suzy, who is executive director interanl audit was told by the previous auditors that they should have an audit committeeand was very annoyed as she feels she has been ding a great job, Last year the staff member working for her entered a local business competition and Suzy won an award for the most admired boss.
Recently the company has faced some petitioning on its door step as members of the community claimed there stakeholder rights are being compromised owing of the amount of non treated water Milan spills into the river and accused Milan of not being a good corporate citizen. John’s son beieves these are irrellavant issues which can be ignored and is just driven by jealousy of his father’s wealth. Jack assured his father the only person that must have a say in the organization is his father “ after all you did create Milan Dad” and the way you have controlled meetings and made all the appointments over the years have resulted in huge profits. “ As you always said Dad at the end of the day there is only one thing that matters PROFIT!”
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