Company: The A2 Milk Company Limited (A2M)

Research Based Report - Corporate Governance & Risk Management

As a new accounting graduate, you have just joined the financial reporting unit of a company. Your company is listed in Australian Securities Exchange (ASX). The Chief Financial Officer (CFO) approaches you with your first task.

In the latest Board meeting, directors of your company expressed concerns about issues related to corporate governance and particularly risk management. New and emerging disruptions to the global economy, such as the Covid-19 pandemic, global trade tensions, technological advances and cybersecurity, add to the growing risks that companies have to deal with. The Board stressed that in times of crises, good corporate governance and risk management are more important than ever. It is also noted that the Corporate Governance Council's Corporate Governance Principles and Recommendations (the Fourth Edition) was released on 27 February 2019 and takes effect for a listed entity's first full financial year commencing on or after 1 January 2020. Therefore, the Board has decided to conduct a review of relevant issues.

Required:

Based on the Board's decision, the CFO asks you to prepare a business research report focusing on the following three aspects:

(1) Identify and explain TWO key issues related to risk management in the Corporate Governance Principles and Recommendations (the Fourth Edition). The Fourth Edition can be found on the Corporate Governance Council's website.

(2) Critically analyse to what extent corporate governance reporting of your company can be enhanced in relation to the TWO key issues that you have identified in part (1). In your analyses, you should refer to your company's most recent Corporate Governance Statement.

(3) Your company is consider expanding its operations to a foreign country. You are required to nominate a specific foreign country and critically analyse TWO major environmental and/or social risks that the company should consider when operating in this foreign country .