You are the leader of the Internal Auditing department of Great Grace International Fashion Press plc. (GGIFP), which is a listed company specializes the editing, promotion, and distribution of the fashion magazines in Shanghai. The management of GGIFP is planning to improve its corporate governance by launch a voting system for shareholders. The board appointed Internal Auditing department to review the implementation of the system and ensure the compliance with corporate governance principles.

The shareholders of GGIFP are around the world, so the attendance of Annual General Meeting (AGM) is not high. Therefore, at the beginning of the fiscal year 1st Sep 2015 to 31st August 2016, the board decided to launch a voting system for the shareholders to instead of the AGM for the fiscal year, which is available online, enabling both the domestic and foreign shareholders to vote through internet. And GGIFP has informed all of its shareholders about the launch of the voting system and the cancellation of the AGM through a local newspaper on 1st Sep 2016. The shareholders were asked to register their accounts in the system, and were informed that the system would be opened for voting from 1st Oct 2016 to 3rd Oct 2016.

During the period, the shareholders can vote through the online system in any area of the world by ticking the option buttons and typing their individual suggestion in textbox. The directors report, the financial statements will be sent by the system through the registered shareholders emails to the shareholders who have finished the voting. However, the auditors report will not be sent to them at the same time, because the auditors report is expected to be finished in December 2016.

The Chief Information Officer (CIO) in GGIFP will be responsible to statistic the voting data and work out the result through the backend database of the system. In order to simplify the voting statistic procedure, the suggestion typed in the textbox will not be reviewed.

The ownership of GGIFP is diversified to over 100,000 shareholders around the world. The administration director in GGIFP decided that the result of the voting will only be informed the shareholders, who have over 2% of the shares in GGIFP.

The finance director asked you to report the internal audit result to the board directly, because the only non-executive director in the Audit Committee is in her long-term vacation. She will not be back until January 2017.

Required

Demonstrate corporate governance the strength and weaknesses in GG and explain how these weaknesses would lead to the incompliance with the OECD Principles of Corporate Governance.

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