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Hi I was just wondering if it is possible to produce answers to P1 exam questions in the form of bullet points?
For instance a q which requires advantages to a company of having independent NEDs.
Can the answer be written as follow:
Among the advantages of having independent NEDs are:
1. Fair and objective decisions which take into account shareholders’ interests can be made.
2. Scrutiny by NEDs can hinder management or executive directors from acting opportunistically or giving in to conlicts of interest.
3. …..
4. …..
Are we allowed to present our answers in those forms?
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No. The examiner prefer essay form that begins with a heading and the points is in the form of a paragraph. Each point use one paragraph. The paragraph should starts with stating the points and then explaining the point. Refer to the past papers answers. It should be like this.
Edit: the underline in the beginning of paragraph is unnecessary. Its just for illustration. Sorry.
Advantages of NED.
NEDs help to limit the power of executive directors. As board sub-committees normally comprise solely, or a majority of NEDs, this ensures that executive power is limited in key areas such as remuneration and appointments.
NEDs can provide specialist knowledge and experience to enhance the decision making ability of the board and the sub-committees. Experience specifically relates to other companies with which NEDs have contact. For example, many NEDs are NEDs or even executives of other companies; they can therefore check whether remuneration, for example, is congruent with industry standards from first-hand experience.
NEDs should be independent of the company – that is their actions are not influenced by other senior management in the company. Independence helps ensure that board and sub-committee decisions are acceptable to shareholders – they will be less concerned that executive directors are running the company for their own benefit.
To maintain independence, NEDs are rotated and the committees therefore refreshed on a regular basis. This rotation helps to ensure that NEDs do remain independent, providing the benefit mentioned above. Rotation ensures that NEDs do not get too close to the executive directors and are not swayed by executive decision making from familiarity threats.
But regarding the use of abbreviations such as NED I dont know if its allowed. Cause to me, non-executive directors word is too long and waste alot of time writing. Does anybody know whether i can use abbreviations such as NED or to shortern the name of a company for example Worldwide Minerals to WM??? Anybody care to explaine?
Thanks again crazycujo for the helpful example….I too get the impression that this examiner likes us to set out our answers without using “bullets/points”, but prefers short paragraphs, with a line between each point/paragraph.
Instead of “points/bullets”, for P1 it is prefered to have a short heading, underlining the brief point/introduction to your point…then go on to expand on that for the rest of the paragraph (even if it is only another sentence or two).
Then start a new paragraph for the next point…just like your example.This seems to be how exam answers have been set out in past papers…however, I could be wrong…just my interpretation.
With regards to the question of abbreviation….
I saw something about this on this forum/ask the tutor…..I think the tutor said that abbreviations are OK as long as the first time you refer to it you write it out in full, followed by the abbreviation in brackets…like this….
“Non-Executive Directors (NEDs)”
…then from that point onwards you can use the abbreviation NEDs in your answer, as you have now told the marker what you mean by that.
Hope that helps.
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Thanks techno.
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Thank you , useful for me too , today i wondering whether use heading or (i) , (ii) . (iii) ………
Only if it says list you can write in bullet points. Everything else should be in short paragraphs.
In regards abbreviations you can use them if they are obvious e.g. CEO, NED etc… This is what I am going to do. This is usually how they are referred to in Annual accounts of many companies so I’m pretty sure the examiner wouldn’t penalize us. Abbreviate the company if you need to but write it out in full the first time and put your abbreviation in brackets next to the full version. I’ve noticed however that the Examiner usually does this for us in the question.
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