[elizateresa]

Dear Sir,

For the same Question (Sweet cicely sept/dec 2017) I am stuck on part (b) the minimax regret table.

I have calculated the regret as (12) for option 2 and (36) for option 3 ( with an annual demand of 50 million). After doing this much I have gotten stuck.

In the NPV table we see that option 1 (supplying 50 mil) when the demand is 60 mil would make an NPV of 6.0. I did not understand this as it looks like that would be the right decision? Since 6 is higher than 4 (Npv of supplying 50mil for 50 mil demand). How is it possible that the NPV is higher there?

Going on to the calculation down the option 1 row.. the answer scheme says:

Annual demand Option 1
50 0
60. (10)
70. (11)

I am totally lost as to how they got these values due to the confusion I mentioned above.. since 6 is higher than 4, where is the regret there..ans how is it calculated? And since both NPVs and 60 and 70 mil demand are 6, why is the regret 10 at 60 and 11 at 70?

Hope my question was phrased in a way that is understandable to you sir!

Would be so thankful for some help, living in Algeria and trying my best to hopefully pass this paper in September.

Thanks a bunch, hope you are well..
Elizabeth.

[elizateresa]

Dear @trephena,
Thank you for your reply!!! I have a better understanding now. I had included a section about bribery activities that caused a big commotion for them in China in 2014.. the marker had said that they were pleased to see this.

The marker said that my work was good in terms of research, information material and effort but it was – not structured well – and so for anybody else reading this thread..

don’t let this slide!

I was confused by what OBU required from me in terms of structure somehow and am sad that I failed over something like that after the effort and time put into it.

I looked up GSK and the NHS and it seems they were slapped with a sizeable fine last year because of their anti-competitive practices. They were accused of ” cheating the NHS and the taxpayer”.. unfortunate for them but hopefully good for the RAP. Thank you Trephena for this suggestion, I will include it in my work. You’re an angel!

Liz 🙂

[elizateresa]

Dear @trephena,

I have been reading your replies to other students on this forum and would like to thank you for your tremendous help and patience with our never ending doubts… If you don’t mind helping me out, I have a few (or more than a few!) of my own as follows.

I am currently assessing the Relations with Shareholders part of the UK code in relation to my company (GSK).

1) The company does not provide much information, for example as to how often the SID met with shareholders. It simply says the following:

“”The Chairman also meets regularly with institutional shareholders to
hear their views and discuss issues of mutual importance, and
communicates their views to the other members of the Board.
The Senior Independent Non-Executive Director (SID) and all the
Non-Executive Directors are available to meet with shareholders.”

And it mentions that the annual meeting session with shareholders in December included the SID, Chairman and committee heads.

I am confused as to how I should assess the quality if such information is unavailable and I cannot do any sort of comparison with another company due to this. What are your views on this?
How else can I do justice to this section of the UK code?

I tried to find out who the main shareholders are of GSK and the Annual report has said that “Nominee Companies” own above 60% of GSK’s shares. When I did more research as to what Nominee companies are I found out that they are simply companies providing a service to shareholders which allows shareholders to buy and sell their shares as they please (as they would even if they were not doing it through the nominee company) quicker, anonymously and without having to hold a shareholder ownership certificate. So now does this mean that these nominee companies should regarded as institutional investors or major shareholders? I feel that they are not institutional investors because of the reasons I described above and because they are made up of many small investors. But this is technically also the case with mutual funds etc, other than the fact that individual shareholders here have the discretion to buy or sell whenever they deem it fit. So how do you feel I should consider this?

I am constantly reaching dead ends with wherever I seem to go!

2) I am also finding it difficult to make a direct link between aspects of the UK code and their impact on stakeholders such as customers and suppliers. After reading through this thread and trying to gather up all the advice you have given other students and I came across your message:

“For employees it is all about employment relations – whistle-blowing policies, employee share schemes. Suppliers – factors that relate to its relationships with suppliers (some companies are accused of exploiting their suppliers by introducing exclusivity agreements, poor payment terms etc).”

Thank you so much for the help you have given all of us, it is greatly helping me when I am stuck. As for your message above I had a query as to how I can relate such information to the QUALITY part of the question, which part of the UK code would supplier relations be linked to? For employees I think whistle blowing policies could come under Internal controls. How about for customers? I feel a little lost in terms of structuring my RAP in a way that logically answers the Topic question. I had submitted in November but failed due to my RAP structure, the marker feedback said that my work was good but that I my structuring was jumbled up.

3) I am assessing remuneration and thinking of making comments on how executive remuneration may affect the amounts available to pay back to shareholders as dividends and also how it may affect employee pay similarly. They have recently appointed a new female CEO who is to be paid 25% lower than her predecessor due to her lack of experience (thankfully not because she is female!), this being her first role as CEO.

I have also included a section on how this is a step towards fulfilling Lord Davies approach that is being pushed forward by the Women on Boards review (coincidentally led by the chairman of GSK!) and so it is a good example set by GSK. Do you think this is a valid point to make in terms of board diversity (I am trying to ensure that it is linked to the QUALITY part of the topic question). I am wondering if after speaking of this, whether I should extend it to an overall review of the ratio of female and male employees in GSK (which was 43% and rising in 2013, overall not a bad ratio but years before the female CEO was appointed and so, can I just make a general comment that they are setting a good example to the pharmaceutical industry in general? Perhaps I can do a comparison of the ratio with other pharma companies although i fear I will be going into too much depth and not leaving word count for the other areas).

Do you think these ideas are good for my RAP? So sorry for the massive message, I have to resubmit in May and am desperate to turn that fail into a pass! 🙁

Thank you,
Liz.

[elizateresa]

@trephena

Hi trephena,
Thank you so much for all the help you have provided us with on this forum!!! It has really addressed a lot of my doubts.\

I had a question about referring to the UK CG code:
When introducing areas of focus, for example section A:1, can I combine parts of the subsections?
What I mean is, can I maybe address “The sufficient regularity of board meetings and the disclosure of attendance of each individual member at these meetings.” rather than having to address each provision separately?

Also, I had read something about quoting provisions from the code but for the life of me cannot seem to find that particular post again today and so would you mind advising me on how to reference different provisions from the code? Am I allowed to perhaps start off by writing ” As per section A:1 of the code..”
Also, will quoting from the code create problems in terms of plagarism?

So sorry for the trouble, am having a lot of starting difficulties..

another question is would it be a problem if i dont assess the quality of risk management in my research paper.. or is this too important a part to miss?

Thanks a ton,
Elizabeth.

[elizateresa]

@trephena
Thanks a ton for that entry, it has given me a lot of direction!
I wanted to ask whether it is alright to choose a company that is not currently making the headlines for any scandals but has had a rocky past. Also, does the scandal have to have been about accounting by any chance? I was looking at Valent Pharmaceuticals and the method in which it grew as I am interested in choosing this company to write my RAP on..
Do you have any advice regarding the above?

Thank you 🙂

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