It is significant to find out whether companies are adhering to or not to such formulated rules and practices in their day-to-day corporate governance practices. There has been a tendency not to follow the stipulated guidelines (Berglöf & Claessens 2004).
The two Australian companies listed on the Australian Security Exchange (ASX),
namely Aditya Birla Minerals and Adelaide Resources can be a good example to check their corporate governance characteristics, their strategies, policies, and practices. Both the companies are into mining and exploration activities. Aditya Birla Minerals (ABM) is running its operations at the Nifty copper operation in the Pilbara region, northern Western Australia, and the Mt Gordon copper operation in northwest Queensland, Australia. Adelaide Resources is into mineral exploration for Gold, Copper, and Uranium deposits. Both the companies have disclosed their governance strategies, policies, and practices in their annual financial reports available on their company websites.
As per the Aditya Birla Minerals’ corporate governance statement given in the final annual report 2007-08, the company board has developed policies and practices relevant with the ASX recommendations as well as changes incorporated according to specific conditions. The board of directors of ABM provides strategic direction and effective governance over the company’s affairs. The board also monitors the implementation of its policies, practices, and strategies. It checks compliance with regulations. Hindalco being its block shareholder, the appointment, evaluation, remuneration, succession, and removal of the chief executive officer is decided on the nomination of Hindalco. Selection and appointment of directors is made by the board in the best interests of the company stakeholders. There are six members in the board, out of which three have to be independent non-executive directors, as per the charter of the board.