Australia ‘So much going wrong’: Damning inquiry into Crown Resorts offers lessons in corporate governance

16:12  10 february  2021
16:12  10 february  2021 Source:   smartcompany.com.au

NSW's Crown inquiry to report on probity

  NSW's Crown inquiry to report on probity Commissioner Patricia Bergin will hand her findings and recommendations about Crown Resort's fitness to run a Sydney casino to the regulator.The NSW Independent Liquor and Gaming Authority gave commissioner Patricia Bergin until Monday to hand over her findings and recommendations on Crown's suitability to hold a casino licence.

The inquiry into Crown Resorts ’ NSW licence has heard how a secret controlling shareholder protocol resulted in executives providing confidential information to James Packer, even after he resigned as a director. Or it could also impose conditions. These could include new processes for dealing with money laundering, regulation of junkets, more training, structural changes to ensure better governance and demanding the departure of executives and board members found to have contributed to the problems.

The latest inquiry casts further uncertainty over Crown 's future direction, and follows the findings of a separate year-long inquiry by the New South Wales state watchdog that found widespread money laundering and governance issues. That report last Tuesday called for sweeping changes to " Crown is determined to play a constructive role with all of its regulators as it works to restore public and regulatory confidence in its operations," Helen Coonan, Crown 's Executive Chairwoman said. (Reporting by Nikhil Kurian Nainan in Bengaluru; Editing by Arun Koyyur and Richard Pullin).

Crown © Provided by Smart Company Crown

An inquiry into Crown Resorts, tabled in New South Wales parliament on Tuesday, came to the damning conclusion that Crown was not fit to hold a licence for its new Sydney casino.

What’s more, the review found that even though James Packer did not have a direct seat on the board, his influence as the major shareholder was “disastrous” for the company.

The inquiry, which calls for reforms to casino regulations and an overhaul of the company’s board, comes after years of reports by media outlets alleging Crown Resorts had engaged in money-laundering, breached gambling laws and partnered with casino junket operators with links to organised crime groups.

Crown inquiry goes beyond humiliation to be a complete disaster for James Packer

  Crown inquiry goes beyond humiliation to be a complete disaster for James Packer After years of trying to engineer an exit from Crown Resorts, James Packer helped spark an inquiry which has forever tarnished his credibility and forced him to decide between dumping stock or completely remaking his casino group, writes Ian Verrender.On a personal level, there's the humiliation and the inevitable recriminations. But when it comes to business transactions, it's a complete disaster.

‘ So much going wrong ’: Damning inquiry into Crown Resorts offers lessons in corporate governance . An inquiry into Crown Resorts has come to the damning conclusion that Crown is not fit to hold a licence for its new Sydney casino.

‘ So much going wrong ’: Damning inquiry into Crown Resorts offers lessons in corporate governance . Leadership, Legal, Managing. As restrictions start to ease and we move into the ‘new normal’, the ways in which we define success are seeing a significant realignment. SmartCompany is the leading online publication in Australia for free news, information and resources catering to Australia's entrepreneurs, small and medium business owners and business managers.

Today, The Age reports that two representatives of James Packer have already resigned as Crown Resorts directors.

Professor Ian Ramsay, director for the Centre of Corporate Law at Melbourne University, says the inquiry is a turning point for corporate governance in Australia and provides a cautionary lesson for companies both large and small.

“Clearly, so much was going wrong, including a lack of legal compliance and a very poor risk culture,” Ramsay tells SmartCompany.

“One of the questions you have to ask is: ‘Who is on your board?’”

Selecting a board

The inquiry conducted in-depth investigations into each of the board members and found that, as a whole, the board and some managers where not effectively carrying out their obligations.

Crown faces fight to keep casino licence

  Crown faces fight to keep casino licence The NSW gambling regulator is considering its next steps after a report found Crown Resorts enabled money laundering and is not suitable to run a casino. Crown facilitated money laundering through subsidiaries' bank accounts then failed to act when it was drawn to their attention in public media reporting, the report found.Commissioner Patricia Bergin, a former judge of the NSW Supreme Court, told the NSW Independent Liquor and Gaming Authority that alone rendered Crown unfit to hold the licence for its $2.2 billion casino in Sydney's Barangaroo.

In financial terms, Corporate Governance is the collaboration of well -defined rules, processes and laws by which functions and regulations of business take place. Most companies leave no stone unturned to achieve a high degree of corporate governance . In the last decade, corporate governance has gained immense and serious attention because of high-profile scams and criminal activity by corporate officers in power. Poor corporate governance can have an adverse effect on a company’s financial health and level of trustworthiness.

Corporate governance is something altogether different from the daily operational management activities enacted by a company’s executives. Corporate governance is a system of rules, policies, and practices that dictate how a company’s board of directors manages and oversees the operations of a company; Corporate governance includes principles of transparency, accountability, and security. Poor corporate governance , at best, leads to a company failing to achieve its stated goals, and, at worst, can lead to the collapse of the company and significant financial losses for shareholders.

Ramsay says an important function of any board is to make sure each member has the right skills and experience.

“It does show the vital importance of carefully selecting your directors in a way that goes beyond simply networks to ensure that people have the right skill sets,” Ramsay says.

The lesson here, according to Ramsay, is that directors must ensure they are up to the job as well as makes sure they are consistently diligent and respond appropriately to issues that arise.

“A more proactive board and a stronger management team would have dealt with the media’s allegations in a more effective way and realised the significance of a potential lack of compliance with anti-money laundering regulation,” he says.

The influence of shareholders

The inquiry, led by commissioner Patricia Bergin, a former NSW Supreme Court judge, was carried out over 18 months and was established to investigate the Barangaroo casino licence.

The inquiry found that Crown’s board was not sufficiently independent of James Packer, who is the major shareholder of Crown Resorts with a controlling 36% stake in the company.

“Clearly, the board didn’t have processes in place to manage that relationship with a major shareholder,” Ramsay says.

“In other words, they couldn’t resist what the major shareholder wanted.”

The post ‘So much going wrong’: Damning inquiry into Crown Resorts offers lessons in corporate governance appeared first on SmartCompany.

Crown Casino Perth inquiry recommended by WA regulator after scathing NSW report .
WA's Gaming and Wagering Commission recommends an independent inquiry be established into Crown's suitability to hold the state's only casino license following last week's scathing report in New South Wales.The recommendation has been made after an urgent meeting of the Gaming and Wagering Commission (GWC), with WA Police Deputy Commissioner Col Blanch among those present at the meeting.

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