AUE2602 ASSIGNMENT 2 SEMESTER 2 OF 2022

AUE2602 ASSIGNMENT 2 SEMESTER 2 OF 2022. Evaluate the corporate governance practices of Book Marked according to the principles and practices of the King IV Code. You should discuss issues relating to compliance and noncompliance with the King IV Report in your answer. a) Governing body • Mr Scott the CEO Is not the Chairman of the board which is in compliance with King IV. • The board does not comprise a balance of power executive and nonexecutive directors; there is only three non-executive directors to 5 executive directors. There should be a majority of non-executive directors and the majority of the non-executives should be independent. • The board should set a balanced target for race and gender representation in its membership. There are only 2 females in the board of 8 members therefore non-compliant to King IV. • The chief executive officer and at least one other executive should be appointed to the board. The board complies as it has both have Mr Scott the CEO and Ms Grey and others which are executive directors. • The board should be assisted by the nominations committee when appointing new directors. Ms Grey has announced her retirement from her position as CFO and has recommended that Mr Rhodes, the financial manager should take over her position on the board, which the board accepted. This in not compliant to King IV • There are no independent non-executive directors: All non-executive directors are members of audit committee and the likes of Kandasamy and McCoyy have direct dealings with Book Marked. Therefore, he cannot be considered as independent. b) Chairperson of the Board • The King IV Report recommends that the chairperson should be an independent non executive director. Mr Adofo owns 7% of the equity interest in Book Marked yet he is the chief executive officer (CEO). • The chief executive officer should not be the chairperson. Mr Adofo is the chairperson of the board and he is not the CEO of the board therefore complies with King IV S - The study-notes marketplace Downloaded by: DistinctionsGuaranteed | Distribution of this document is illegal S - The study-notes marketplace FOR ACCADEMIC NEEDS CONTACT /1 • Former CEO should not be elected as chairperson until three complete years have passed since the CEO vacated his position. Mr Adofo was appointed in less than 3 years of being a CEO of the company. He was 2 years and 11 months only, which is below the 3 year requirement, therefore non-compliant to king IV. c) Audit Committee • The audit committee should consist of at least three members. The committee has Messrs Stryker, Kandasamy and McCoy as committee members therefore complies with King IV. • Each member must be a non-executive (King IV) director of the company. • Messrs Stryker, Kandasamy and McCoy being members of Auidt committee are all non- executive directors therefore complies with King IV • Each member must not be a material supplier or customer of the company, such that a reasonable and informed third party would conclude that in the circumstances, the integrity, impartiality or objectivity of that member of the audit committee would be compromised. • Mr Kandasamy’s purchases for his bookstore amount to 15% of Book Marked’s revenue which non-compliant to the above recommendation of King IV.