Question

The chairman was involved in the incidents of underpayment of their employees' salaries.

Can you explain what Woolworth can do to gain back the shareholder's trust?

because according to ASX (2020) Woolworth share price fell after this news.

Answer 1

Guidance to write answer:

In order to gain trust of shareholders and improve image of business as it can be seen that following this news share price has fallen sharply. Woolwarth can do the following:

• Determine duration for which employees were underpaid.
• Calculate the difference amount and make a back-payment.
• Enquire chairman as to why such incident happened and bring on him charge if found guilty.
• Chairman may be barred from reappointment.
• Press release these announcements and let people know how corrective actions are taken with an apology.
• Implement systems to prevent such errors in future.
• Ensure employee records are kept for minimum 7 years.
• Back-pay all entitlements that were underpaid historically.
• Review changes published by fair work commission.
  

Hope this helps:)