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Corporate governance is considered as a proper procedure or process which helps in providing a standard and specific direction to the company (Cuomo, Mallin and Zattoni, 2016). Different aspects have been associated with the corporate governance such as maintenance and handling of the company, its various operations and standards including the stakeholders and actions etc. Lack of factors such as laws, directors, corporate governance etc. can have a negative influence on Rio Tinto mining company. Rio Tinto is one of the leading mining companies that helps in an efficient and appropriate processing of the resources and minerals. The report is about discussing the different reasons such as lacking performance etc. of the Rio Tinto so that it can be analysed well and efficient preventive measures can be taken.
Research is considered as a proper investigation about various different sources by which the information and data can be collected in order to make the research more effective and thus, it can help in achieving all the outcomes and targets of the projects. Research methodology is classified as a systematic way of analysing all the processes and procedures that can be applied to the research. Different aspects of the research methodology are discussed as under :
Research approach is considered as a way that can be included by the researcher in order to make use of the sources more efficiently to achieve all the outcomes. It can be further classified as either inductive or deductive. The deductive approach involves the aimed objectives whereas the inductive one deals with the development and implementation of new theories. In this research, the researcher will make use of the deductive approach because it will help in analysing the reasons why Rio Tinto gone through poor performance issues and turnaround etc.
Research philosophy is considered as a sort of belief that can be used by the researcher as it helps them in providing a proper path and direction that how the information can be analysed and then used for achieving better results. It can be further classified as positivism, realism, interpritivism, ontology etc. In this research, the researcher will make use of the axiology because it can help the researcher in analysing all the factors that lead to the business risk in the Rio Tinto.
The gathering of data is collecting the information for the research in order to make it effective and appropriate. It can be done in two ways, either by the primary one or by the secondary method. Primary collection of data is considered as a way in which the information is being gathered for the first time whereas in case of secondary data collection, the information or a set of data has already been collected by some external body and then the same information is being used by the researcher (Shrives and Brennan, 2017). Different means of collecting primary data includes focused groups, interviews, surveys etc. and various sources for collecting secondary data includes online, books, journals etc. In this research, the researcher will make use of the primary data as it can help the researcher in analysing the consequences that lead to poor business performance of the Rio Tinto mining company.
Research limitations are considered as some specified factors that can act as a challenge for the researcher while doing the research. A very common example of this can be considered as the fact that if in case, the time period required for the research has been extended by the researcher so that they can be able to make it more appropriate, in that case, it is very important to analyse that for extending the time, there must be various other resources that will be required as well such as cost etc. If at that time, if there might be less cost available, then it can actually term as a challenging factor for the same. So, it is better if the researcher completes the research in the given deadline only to achieve the outcomes.
Risk based internal audit (RBIA) is considered as a methodology that is internal and its basic forte is to analyse different risks and related factors and then a sort of assurance and relief is then provided in order to handle all the changes in a very effective manner. Rio Tinto has been gone through various factors that led to have a negative influence on the rate of popularity and productivity of the company. The company has been blacklisted as well for a longer period. As per the statistics, in the year 2008, it has been observed that there was a sort of disruption regarding the financial crises, the Norwegian government had already spent a huge amount in Rio Tinto and it was estimated about $1 bn and it was all associated for the grossly unethical conduct that they have faced with the Rio Tinto. It has also been observed that there were some evidenced found that were related to the environmental damage and that too at a huge extent. Also, it has been observed that even if the company continued to fund the Anglo Australian mining giant, there will be equal number of damages as well to the environment and related factors. This was the reason why the Rio Tinto mining company has been blacklisted. Also, as this is a mining company, there has been observed various incidents as well with some employees. Although all the processing and operations are being done under supervision, but still various cases of accidents have been recorded as well.
Also, as per the statistics, it has been analysed that the mining company, Rio Tinto went ex dividend which means, the services or products that have been brought on its ex dividend data or after it, the customer in that case, might not get the next dividend payment. After it went ex dividend, there has been a decrease in its shares and it was estimated as about 4%. Although the core operations are being performed in Australia but the mining company has been expanded on a wide basis (Oyewunmi, Osibanjo and Olujobi, 2017). The actual forte of Rio Tinto is to keep its focus on quality rather than quantity. The mining company has also associated with enormous binding offers as well because the firm deals with an essential range of the aluminium assets as well. These binding offers were actually meant so that the company can be able to achieve a high gain in satisfied customers and also, in case of increasing the popularity and productivity.
The Australian government has established enormous number of auditing standards which is considered as an essential factor that is required while undertaking an audit of any financial statements etc. A very well known example of this can be considered as ASAs 210, 701 and 700. This is considered as a very common standard that has been passed by the Australian government. As per the Corporations Act 2001, it involves an audit of the whole financial year and a half. Also, as per this Act, it makes the involvement of all the financial statements. Another popular example, ASA 800 deals with the fact of performing the audit asignment help of the reports and statements that are considered under the special category. Also, it deals with the historical data and information that is associated with the financial terms and conditions. As per the amendments of ASA 805, it deals with the involvement of only those financial statements that are single. Also, when the factor is associated with some specific elements or items. In that case, the standard has to be applied. So, Rio Tinto can ensure applying all these standards in order to make the system more effective and appropriate. There is a huge requirement of the auditing standards and so, Rio Tinto should also ensure the same because the mining company has gone through various troubles as the company was blacklisted. Also, there were a few incidents that happened with some of the employees of the company at mining camps. Involvement of auditing standards in Rio Tinto can actually help the company to have a proper direction and path so that the employees of the company can actually lead to make improvements and more appropriateness in the audits that are conducted for analysing the financial status of the company.
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So, as the company has also faced various issues such as poor performance of the employees. Also, the company had gone through a huge turnaround as well (Harnay, 2018). There might be various reasons behind it. Some very common examples of this can be considered as the less motivation being provided by the company. Rio Tinto can also ensure to make involvement of some factors such as providing motivation and encouragement to the employees by different means such as incentives, increments etc. It is important because by such ways the employees also consider that they are important for the company which further helps in maintaining their focus on the operations and processing of the Rio Tinto mining company.
It has been claimed that the Exchange and security commission has claimed that the company has also been involved with a fraud case. In this fraud case, some former executives were also been involved that helped the other external parties to get involved with the operations to be cheated and various different ways to deal it with. Although there have been various number of deals done by Rio Tinto but a few of them actually turned out to be the worst for Rio Tinto. A very common example of this can be considered as the deal that was done in Mozambique. Although, there the company paid an amount of $3.7 but then also, it went wrong because the government did not allow barging the coal in the Zambezi river because it can further lead to various troubles such as increasing the overall rate of the environmental hazards, involvement of air, water pollution etc. So, the project has been cancelled which further led to cause higher damages to the financial status of the company. So, the fraud charges have been faced by the Rio Tinto while doing an investment towards Mozambique coal dealing.
Rio Tinto has followed a very basic approach to the corporate governance. The company makes involvement of all the essential factors such as corporate governance code, disclosure, listing rules etc. The company has guaranteed all their customers for providing a perfection in all its products and services. Also, generating an efficient shareholder value is important as well and the company is trying all the possible factors and operations to achieve the same. Various standards have been implemented as well by Rio Tinto so that they can make an efficient disclosure of the required factors. There are enormous standards that are reviewed by the company and the ones that acts suitable and relevant enough have been implemented by the same so that it can help the company to achieve all its outcomes and targets. There are various literal requirements as well of each company. So, it needs to be fulfilled. Therefore, for achieving all the practices in a very efficient manner, it is very important to analyse all the literal requirements to achieve it thoroughly (Chapple and Truong, 2015). These requirements are to be considered very effectively so that they can be able enough to cope with the current requirements of the processes and the operations of the company. Also, Rio Tinto can ensure to have a corporate governance committee because it can actually help in making the processing smooth enough because it involves various factors that can seem essential enough for the company. Also, it can further help in identifying individuals that can be involved in order to make various modifications and improvements for the benefits of the company. Also, the company can nominate a corporate governance committee so that the board itself can be able to make the required changes. Along with this, Rio Tinto should also have an audit committee so that they can be able to analyse the financial statements in an effective manner so that the company can be able to make an evaluation that what areas needs to be improved in order to make some advancements in the financial stability of the company.
Implications of findings
There are some factors that can be involved by Rio Tinto so that they can get rid of factors leading to poor performance and also help the company to avoid any further complications or issues. As the mining company has faced a huge turnaround as well, so the company can thought of making involvement of various factors that can actually help in satisfying the deeds of the employees as well as customers. The company can provide some ways of encouragement and motivation to the employees such as incentives, increments etc. because these means can actually help the employees to think that they are equally essential for the company. It further helps in balancing their focus and concentration towards achieving the goals. Thus, it can further help the company to achieve a huge number of satisfied customers along with a higher popularity and productivity rate. Also, there were various cases in which it has been observed that a huge amount of people have been injured and gone through accidents as well during the operations of the mining. So, these small issues can actually prove very harmful for the employees of the company. Thus, for avoiding these issues, the company can ensure to make involvement of some factors that can help them in analysing and monitoring the sites better because it is obvious that it is not easy to work in mines.
There are various types of mines, so working in each might not be comfortable. There can be variety of risk factors that are to be considered such as shortage of light facility etc. So, these situations can lead to further complications. Thus, for avoiding the same, the mining company Rio Tinto can make involvement of the specialised features by which, it can seem easy to provide each possible facility to the employees working in the Rio Tinto mining company. Proper light facility along with proper support to the team members can actually prove very beneficial for the Rio Tinto as it will help in maintaining the focus of the employees towards the objectives only so that the company can be able to achieve all the targets and objectives and that too at a faster rate. Also, Rio Tinto can develop a better and new business plan and it should be structured in a way that it can be able to cover the loop holes of the previous ones. If a business plan is made effectively, which means that it involves all the required operations and processes, then it can surely help Rio Tinto in achieving all the targets and goals (Bhasin, 2015). So, Rio Tinto can make sure to develop a strong business plan so that it can be able enough to achieve the targets and goals in an effective and appropriate way.
Also, the company can start making more appropriate projections so that the whole process can stay clear enough to the employees of the company. It further helps in avoiding any sort of confusion. It is considered enough important as well because if the employees will be clear with their roles and responsibilities, then it can help them to focus on the process better, thus better ideas can help in making huge changes and that can help the company as well to achieve the targets at a higher rate. The authorities can also act friendly with the employees so that they can be able to share their ideas as well as issues with them. It will help them in having an efficient set of interaction. Having a great conversation with the employees is considered as a very essential part of every organisation. So, Rio Tinto can also ensure organ sing sessions with the other ones as well so that every employee in the organisation can be able to interact with each other in a friendly manner because it helps in making the environment of the work place more happier and healthier.
Conclusion and recommendations
It can be concluded from the report that there is a huge importance of corporate governance, laws and directors in Rio Tinto because it helps in maintaining a balance between all the processes and operations. If all these factors such as laws, policies, procedures will be implemented in an appropriate manner, then there is a possibility that the Rio Tinto mining company can be able to performing all the processing in an efficient manner, thus helping the company to achieve all the targets and goals. Also, various different ways can be included by Rio Tinto such as a managed and structured plan etc. so that the business can avoid as many failures and target towards achieving goals. There are various factors that can be involved to avoid the ones that throw a negative influence on the processing of the company as Rio Tinto has also gone through some factors such as frauds etc. Also, the company has been blacklisted as well for a few periods.
Factors such as corporate governance, directors and laws play a very crucial role in maintaining a balance between the operations and processes of the company. There are various standards and laws that have been developed by the government of Australia so that they can be implemented by Rio Tinto because it will help the processing to be done in a balanced and structured way. It will further help the company to achieve all their targets and goals at a much faster rate. Also, the Rio Tinto mining company can ensure to organise some sessions by which they can be able to make the roles and responsibilities clear enough so that each and every employee will stay aware of their actual role, thus they can maintain their focus very efficiently on the targets. There are various risks associated as well such as business risks, control risks etc. So, the company can ensure to have proper measures by which they can be able to access the risk factors before only because if they will be able to access the factors before, then there is a possibility that they can be able to control it.
Also, Rio Tinto can ensure proper directors and managers so that they can be able to guide the employees in a very appropriate manner . Also, providing proper and best possible facilities to the employees can also help in making them happy enough because maintaining it is a very essential factor for the company. Also, organising sessions that can help the employees to interact with each other helps in making the whole environment more happier and healthier as well. So, it can further prove beneficial for the company itself, thus all the employees will be able to achieve the targets and goals and that too at a much faster rate. Involving the features as per the laws is also necessary because it helps in working in a structured path and that is essential as well for the company. Auditing is also considered as a very important process because it helps in analysing the financial status of the company. So, Rio Tinto should also make sure for a proper auditing so that they can be able to know the lacking factors so that they can make further improvements and modifications as soon as possible. Thus, these can be considered as some factors that can be involved by Rio Tinto in order to make the processing smooth and easy enough so that the mining company can be able to achieve all their targets and goals at a much faster rate.
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