1
Q
Corp Gov Definition
A
System by which a company is directed and controlled.
2
Q
Corp Governance aims
A
- To achieve objecive
- Comply with legislation
- Protect intestest of stakeholders
3
Q
What is the board supposed to be like?
A
- Honesty and transparency
- Integral to ICs/Risk Management/Agency/Stakeholdrs/Strategic Mgmt
- Final responsibility lies with Bod
- Authority and responsibility are delegated to Bod by the sharholders
- Balance of properly qualified EDs and independent NEDs
- Diversity of background, experience, etc.
- Reasonable size of BOD
4
Q
Guidance on CG
A
- Be informed ad support LT sharholder benefit
- Clarity and integrity
- Balance of skills, experience and objectivity for decisions
- Blend of corporate objectives, values and business ethics as part of strategy..
- Proactive approach to managing risks.
5
Q
Board committees
A
Formed to carry out specific functions that cannot be carried out effectively by the main board alone:
- Time commitment required
- Specialist subject matter
- Legal/regulatory requirements or recommendations.
6
Q
Most Common Board Committees
A
- Remuneraton committee
- Nominations committee
- Risk Committee
- Audit Committee- entirely NED’s w/ at least one possesing recent fin expertise. (internal watchdog, liaise with external auditors) Give comfort to staekholders.
Can set up any committee you want
7
Q
What should an integrated report look like?
A
- Strategic focus
- Future Orientation
- Connectivity of information
- Responsiveness and stakeholder inclusiveness
- Conciseness, reliability and material
8
Q
What are the six types of capital
A
- Financial
- Human- Skills, experience and diversity of human resource, culture, ethics.
- Social - institutions, community,
- Intellectual- Intangible
- Manufactured- NCA & Infrastructure
*Natural- renewable and non-renewable
9
Q
What is the role of IR and its value to company and sh
A
should cover the six content elements using the five guiding principles to enable capital providers
and other key stakeholders to make decisions about the
business’s value and stewardship – the matters that shape
its value for the longer term, its aspirations and plans for the
medium-term, the business as it currently stands, and how it
has delivered on its promises.
10
Q
How IT provides mmore relevant information to shareholders about value creation?
A
11
Q
What is integrated thinking?
A
Leads to integrated decision making and actions which consider value creation and preservation and erosion over the st and lt
12
Q
How is integrated thinking implemented?
A
Across a variety of areas:
Purpose
Governance
Culture
Strategy
Risks and Opportunities
Performance
and communicated to stakeholders through integrated reporting.
13
Q
What are the benefits of integrated thinking?
A
- Improve stakeholder decision Making
- Greater transparency improve reputation
- Strengthen communication and alignment of interests with Stakeholder
- Accountability- corporate gvt. As stewards of society’s common resources they must be held accountable
14
Q
How do you asses the drivers of change?
A
- Driven by:
- Unforeseen changes in the environment (Pestle)
- Technological shifts
- Shifts in demand
- Strategic drift
15
Q
What is the change management process?
A
- Diagnosing need for change
- Assess drivers of change (internal/external)
- Understand the direction of change (type of change)
- Develop change amangement strategy
- Implement change
16
Q
Understand what type of change is needed?
A
Scope & Speed are the considerations
Fast and Transformative- Revolution
Slow and Transformative - Evolution
Fast and Re-aligment - Reconstruction
Slow and Re-alignment- Adaptation
17
Q
Re-engineering required if:
A
- Existing processes arre no longer effective
- Organisation faces tough competition
- New ideas triggered through innovation
18
Q
Types of process re-design
A
Re-engineer - major, new tec introduced.
Simplification - lean - remove waste and inefficiency
Value-Added Analysis -
Gap and Disconnect Analysis- addresses knowledge/resource asymettry and lack of collabaration.
19
Q
How do you get buy in from stakeholders?
A
Lewin Three Stage Model
20
Q
How do you decide how to change it
A
Harmons Process Matrix
Outsource
EPR
Human based
21
Q
What role does CEO play in change management?
A
- Set vision and strategy
- Champion change - communicate and rally support
- Leadership and diretion
- Empowering and supporting team
- Monitoring Progres and Performance
- Leading by Example
22
Q
How teams structure may need to change in restructuring?
A
- Cross functional teams-collab and diverse perspectives.
- Role-redefinition - new positions, elimination of roles, combining roles, or relaingning.
- Leadership Development:
- Agile methodologies: itertion dev and continuous improvement.
- Performance metrics and feedback
- Change management training
23
Q
Steps
A
Why change required- forced by environment, competitive presures, regulatory pressures.
What needs to be changed- teams, processes and capability or competence?
Requirement of change - speed of change? Change agent? Measure succes?
Change situation analysis- type(adaptation, construction, context of change. forces facilitating and resisting.
24
Q
Align Culture with CHange?
A
Unfreeze
CHange
Freeze
25
What are internal controls systems?
process for assuring of an organization's objectives in operational effectiveness and efficiency, reliable financial reporting.
26
What are the overall aims of internal control systems?
* To achieve objectives
* Protect intersts of our shareholders
* Comply with legislation and regulation
27
Reasons for failure of IC's
1.Employee training and knowledge
2.Collusion
3.Inadequate risk assesment
4.Poorly designed controls
5.Ineffective monitoring
6.Lack of management oversight.
7.Obsolete controls.
28
Outcomes of ineffective ICs
* Damage to Reputation
* Ineffecive and uneconomic performance
* Exceeding risk appetite
* Not meeting strategiv objectives
* Stakeholder dissatisfaction
* Legal or regulatory penalties
29
How do we develop an ICS?
* Risk management process
* Establish system to keep up to date with legal and regulatory obligations.
* Allocate responsibility for monitoring and maintaining ICs
* Effective Internal audit and cg structures
* Educate and train employeea
* Monitor and update regulary
* COSO ERM model is framework for managing risk.
| 1.
30
What are the four lines of defence?
First line of defence: Control frameworks and day-to-day controls
Second line of defence: Management review
Third line of defence: Internal audit
Fourth line of defence: External audit
31
What is risk?
Function of how badly a strategy will perform if the wrong scenario occurs.
Variability of outcome.
32
Types of Risk
* Financial
* Regulatory
* Environmental
* Reputational
* Strategic
* Political
* Cybernetic
* Health and Safety
* Project and change management
33
Identifying Risk?
* Brainstorming
* Stakeholder Interviews
* Project Plans
* Root cause analyiss
* SWOT
34
How do we manage risks?
Evaluate the threat(likelihood and outcome)
Then plan (TARA)
Based on stakeholders risk appetite.
Monitor and adjust plan overtime.
Embed riskk ino culture.
35
Steps
How do we prioritise risk?
Has the rganisation sufficiently mitigated the risks identified
Are there risks which have not been correctly identified?
36
AT Club main sources of income
* Biggest- Television
* Problem child- Retail - only the kit can be ordered online.
* Capped by Stadium size- Match Day
* No naming rights deal- Sponsorship
* Lowest - prize money
37
Revenue Trends of AT
* Overall 5% growth from yr 1 to yr 3 for revenue
* 18% increase in costs deducted to arive at ebitda
* 67% decline in relevant earnings figure reported over three year.
* 53% decline in Ebitda over the last 3 yrs
38
AT's main expenditure
* Employee salaries and benefits
* Amortisation costs
* Stadium and facilities- big maintenance cost for health and safety.
* Matchday costs
* Television channel
* Finance costs
39
AT Football Club Risks?
* Poor performance risk
* Talent Managemnt Risk
* Repurational Management
* Environmental Risk: Waste, energy, biodiversity. Carbon offsetting. Solar panels.
* Social RIsk - Hillsborough, Safeguarding, D&I
* Tech Risk- Cyber ssecurity, Socials, ethics
40
Role of Audit at AT
**Role**
* * Transparent and reliable reporting internally and externaly & compliance.
* Bridge gap between board and auditors.
**Effectiveness**
* No internal audit function
* Four lines, day to day, manager reiview, ia and external.
**Recommend:
**Regular reivew of audit process
Finance controls- audit trails
Culture of compliance- trainnig.
41
IT and Cybersecurity at AT
**Systems**
* Hold data on season ticket holders and online purchasers.
* Website and app
**Risks**
* Customer safety,
* Reputation
* Loss of data
* Loss of revenue
**Mitigations**
* Data back up and recovery plan.
* Announcements on other verified platforms to re-assure users.
* Cyber insurance
* GDPR officer to monitor risk.
* Technology audits
* Network security
* Role based access
* Incidence response
* User education and awareness.
42
AT Projects - Stadium
**Risks**
* Financial Viability- uncertain profitability and so may not be able to service debt.
* Reputational Risks- existing congestion worsens.
* Environmental- Risk officer, mitigate.
* Social- resisitance to change -Lewin, Stakeholder management - Mendelow.
43
AT Strategy
** Leverage Digital **
* Analytics to target fans
* Increased social as only on traditional
* Global expo to increase brand awareness
* E-commerce expansion
* Gaming - challeng in profit sharing but synergy.
*** Improve Competitive Performance
**
* Analytics- Scouting, Individual Performance, Opponent knowledge.
* Reduce bad purchases, scout cheaper but compatible.
* Youth academy and Training programs- strategicaly aligned, Can flog for profit, requires long term investment so not for emergency.
*** Exploit commercial opportunities**
* Diversity sponsorship- Women's team
* Global brand expansion- Man U- regional partnerships as well as global.
* Naming RIghts
44
AT Context Appraisal
| Porters Diamond
**Strategy**
Top of the league. Good Training
**Factor Conditions **
* Workforce 130 coaches, 125 players
* Stadium, only one in 40km radius.
**Demand Conditions **
* Full capacity stadium
* Local fanbase
* 60 yr history and & 6 prior wins
**Related & Supporting Industries**
* Broad casting Media- supports visibility and revenue
* Merchandise suppliers and sponsor
45
AT Stakeholders
**Supporters and Retail Customers
** - keep informed
* Communication through stadium website, matchday program, Team magazine, apps.
* Fans forum restructured to include diverse representation.
* Meet often.
* Comment boxes around stadium for match day feedback.
**Merchandise Suppliers**
* Critical role in supply chain
* Engage in discussion on sustainable practices and ethical production.
**Regulatory Bodies**
* Engage through stadium management plan
* Include local area managment plan, stadium travel plan, monitoring programme.
* Require proactive approach and collab on compliances issues.
**Residents**
* Engagement via Stadium Mgmt plan to minimize negative impacts.
* Additional strategies like litter collection, street cleaning, communication through newsletters, website.
46
AT Ethics
**Risks**
* Match-fixing and betting
* Financial Mismanagement
* Player welfare
* Environment
* Community- regeneration.
* Sponsorships
**Externally**
* Integrated reporting to keep stakholders transparent
**Internally**
* Ethics and compliance programme (regular reporting on conflicts of interest)
* Internal Control (policies)
* Fostering Transparency (training) and accountability (punishment)
*
47
AT CG
*** Rational for additional NEDS:
**
* * Governance concern
* Increase diversity in decision making
*
*** Importance of Corporate Governance
**
o Disclosure of internal control failures allows for accountability and may prompt timely board replacements
.
o Increased transparency through annual reporting enhances shareholder confidence and satisfaction.
o Compulsory reporting encourages good practices and rigorous internal control functions, bolstering investor confidence.
o Advocates for legislative intervention to prevent companies from avoiding reporting on internal controls.
o Proposed content of external report on internal controls includes acknowledgment of board responsibility, summary of review processes, high-level information provision, and disclosure of weaknesses leading to errors or losses.
| *
48
Methods of Growth
**Internal Development
*** New products,
* Brand international market
* cut costs for efficienty
* Invest in digital platform
**Acquisition
**
* Purchase tech start up - specialised in tehc analytics.
* Product range expansion.
*Purchase smaller club in different region- expanded reach for talent.
**Joint Venture
**
* Product expansion range
* Work with anothe camp to acesss their market
* AT joing int clubs for acces to new markets.
**Divest**
Sell of bsuiness underperfroming
NCA
Focus on strategic growth
49
AT and Talent Management
SLIDE 3 – Key components of effective talent management
**Recruitment and Selection
**
Attracting high-quality candidates
Rigorous selection process
Development and Training
Providing opportunities for growth
Investing in employee skills
Performance Management
Setting clear goals and expectations
Providing regular feedback and coaching
Succession Planning
Identifying and developing future leaders
Ensuring continuity in key roles
Employee Engagement
Fostering a positive work environment
Encouraging involvement and commitment
Notes:
Effective talent management involves a holistic approach that encompasses various stages of the employee lifecycle. By focusing on recruitment, development, performance, succession, and engagement, Rail Co can ensure a sustainable pipeline of skilled and motivated employees.
50
Summary of Main Points:
Sailing Dinghies Market:
Financial Drawbacks: Lower profit margins compared to Yexmarine's targets. Low pricing strategy may not ensure repeat purchases and might compromise perceived quality.
Non-financial Benefits: Differentiation from competitors, potential for long-term relationships with customers leading to additional business.
Non-financial Drawbacks: Facing local competition, potential confusion about
51
Luxury Yachts Market:
Financial Benefits: Positive net present value, higher profit margins compared to targets.
Financial Drawbacks: Uncertainty due to lack of presence in the market, potential foreign exchange risk, heavy reliance on investment funds.
Non-financial Benefits: Differentiation from competitors, potential international presence.
Non-financial Drawbacks: Strong competition, limited customer base, uncertain success with considerable time and resource investment.
Establishment of Strategy Committee:
Benefits: Enhanced strategic planning, active environmental review, focused consideration of strategic options.
Problems: Confusion of responsibilities with the main board, lack of non-executive directors' involvement, undefined meeting frequency, inadequate consideration of financial aspects and human resources.
Impact on Change Process:
Unfreezing: Lack of employee engagement due to perceived disregard for their opinions.
Change: Reluctance to commit additional time for the move and resistance to new processes.
Refreezing: Risk of reverting to old routines, decreased operational efficiency, and quality of service post-move.
52
Risk Mitigation Strategies:
Flooding Risk: Further investigation needed, contingency planning and flood precautions advised.
Product Obsolescence Risk: Continuous innovation strategy required, including infrastructure development and marketing initiatives.
Data Risk: Implementation of thorough data security measures and regular monitoring.
Reputation Risk: Active monitoring of public opinion, quality management program implementation, and proactive marketing efforts.
53
Benefits of E-Marketing:
Building communities, individualization of marketing efforts, leveraging social media for wider reach, promoting employee expertise, and marketing major product developments effectively.
ACCA SBL
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