Governance - Course Notes

Question 1

In a weaknesses in corporate governance question, what do you need to take into account?

Answer 1

• Identify the current structure
• Identify the weaknesses
• Explain why there are weaknesses
• Identify how they can be corrected
• Justify why suggestions would correct weaknesses
• Recognise professional marks

Question 2

In a stakeholder analysis question, what do you need to take into account?

Answer 2

• All categories of stakeholder
• Their power and interest BEFORE
• Their power and interest AFTER
• Strategies for dealing with them BEFORE
• Strategies for dealing with them AFTER

Question 3

In an environmental and sustainability audit question, what do you need to take into account?

Answer 3

• Advise them to have an audit
• Justify why
• Suggest ways to manage

Question 4

What are the three basic groups of stakeholders?

Answer 4

• Internal
• Connected
• External

Question 5

What is the acronym for the basic group of stakeholders?

Answer 5

ICE

Question 6

Who are included in the internal group of stakeholders?

Answer 6

Directors, managers, employees

Question 7

Who are included in the external group of stakeholders?

Answer 7

Government, pressure groups, local community, media

Question 8

Who are included in the connected group of stakeholders?

Answer 8

Shareholders, lenders, customers, suppliers

Question 9

What is a voluntary stakeholder?

Answer 9

Engage under free will
Narrow stakeholder
Heavily affected by a company’s strategies and actions

Question 10

What is an involuntary stakeholder?

Answer 10

Involvement is imposed upon them
Wide stakeholder
Less affected by a company’s strategies and actions

Question 11

What is used when describing stakeholders power?

Answer 11

Mendelow’s Matrix

Question 12

If a stakeholder has high power and high interest, what happens? Give examples

Answer 12

INVOLVE

Key customer
Active major shareholder
Trade unions
Secured lender

Question 13

If a stakeholder has low power and high interest, what happens? Give examples

Answer 13

CONSULT / INFORM

Local community
Pressure group
Local media
Local government
Individual shareholders
Individual customers

Question 14

If a stakeholder has high power and low interest, what happens? Give examples

Answer 14

CONSIDER IMPACT OF ACTIONS/SATISFY

Central Government
Passive major shareholder
National Media

Question 15

If a stakeholder has low power and low interest, what happens? Give examples

Answer 15

IGNORE

Individual householders

Question 16

What is EMAS?

Answer 16

Eco Management and Audit Scheme

Question 17

Describe EMAS

Answer 17

Voluntary scheme that requires the company to:

• Set targets
• Focus on improvement
• Produce an annual disclosure report
• Have on site inspections each year of systems
• Full audit of disclosure report every three years

Question 18

Describe ISO 14000/14001

Answer 18

• Guidance on how to minimise the firm’s environmental impact
• Guidance on how to create an Environmental Management System
• Firm produces a policy
• Regular assessment of impact on the environment
• Public declaration of compliance with the ISO only

Question 19

What does a social audit assess?

Answer 19

Resource usage
Health and safety
Labour work conditions

Question 20

Is there a legal requirement for an environmental audit?

Answer 20

No but in response to public pressure more companies are choosing to do so

Question 21

What are the types of tasks that you would get for a governance question?

Answer 21

1. Strengths and weaknesses
2. Developments
3. Business mergers
4. Assurance
5. Criticisms of a proposed strategy