(Archive) T17 Corporate Governance

Thank you Gillian, would reference accordingly.

Hello, can anyone tell me if the OECD principles of corporate governance rule-based or principle-based? i need to find limitations for this approach and i cant seem to find it.

Yes it is very similar to the UK Code and has key principles (as do most Codes). However it can be that there are laws within a country's constitution that govern some aspects of CG e.g. in the UK there are some regulations about directors' duties in the Companies Act and where there has been fraudulent activity there could be action taken under the Fraud Act against officers in a company (as with the 2014 Tesco scandal) The fact that there continue to be company scandals shows that the Codes are of limited power to prevent them so to find limitations you need to us key words and find articles relating to disadvantages of principle CG system, and consider how effective are the Codes in practice?

It is required in the project to state your research approach, I have been reading on this. Which approach fits in line with T17, Qualitative, Quantitative or Mixed approach?

Hello Gillian, I had a meeting with my mentor today, and he told me that I should have at least two or three business model, as I have used only Mendelow matrix. My question is, should I use more then one Business model or technique with topic 17? Is it a requirement? I'm doing my research on Carillion and i'v almost completed section 3 with only conclusion to be made.

@melonny05 - it is impossible for me to give a precise answer without having seen your data. Qualitative refers normally to written documentation used in your research and quantitative to numerical data and obvious mixed mean both. Topic 17 predominantly relies on qualitative data secondary data and very little quantitative data, although possibly if you are using some ratio analysis in your evaluation this would be classified as quantitative data.

@Kurt - I suspect that your mentor is more used to mentoring students for Topic 8 ! The actual assessment criteria mention "understanding" and "application of accountancy / business models" and in the grading grid (see Appendix 1 of the Information Pack) it refers to 'concepts' and 'techniques'. For the purpose of Topic 17 accountancy models and techniques include making comparisons with the CG Code (in itself an accountancy model), mentioning the Anglo-Saxon Board model and Agency Theory / Stewardship theory as well as Mendelow. (Although Mendelow's was traditionally used with OLD Topic 17 it is not necessarily prescribed for new Topic 17 but could be included - as could any other stakeholder model). I would therefore think that alongside the Code that Mendelow's would suffice. As with all models it is not the number but how WELL they are applied - this is particularly the case with Carillion (where word count can be an issue) where you are advised for a good grade to focus on the deficiencies of the board rather than overly focus on superficial models just for the sake of it..

Thanks you Gillian, word count is a problem, and will have to be reduced in order to make a good conclusion. I've used the corporate governance code and stewardship code and compared it with those of Carillion, and also I mentioned the practices that was in noncompliance to the code. As for the origin of the issues, I did mention the deficiencies of the board and the case of a manager having to go through whistleblower procedure, and the responsibility of auditors in helping in the collapse by signing the financial report while the company was in financial constraint. I also mentioned how hedge funds and some major investors noticed signs of Carillion failure before the management. As for the respond of the company, I used the Mendelow matrix, and focused on the effect of the collapse/liquidation has on them, and change in their position in the matrix quadrant brought on by the collapse. In your opinion are my on the right track?

That all sounds good Kurt. All the best with your submission!

Hi Gillian, my RAP Part 3 consist of 5000 words while that of Part 2 consist of 1000 words, my mentor advises to stick to the recommended word count in the information pack. I feel that this would reduce the quality of part 3 and include unnecessary information in part 2. Your thoughts concerning this would be appreciated. Thank you

All a marker is interested in is ensuring that you have covered the basics requirements with Part 2 (as set out in the Info Pack) and discussed data sources, limitations both of data gathering and business techniques and considered reliability, validity of the data and tried to avoid bias. If you have done that, then fine. I actually instruct my own mentees to plan for 5,000 words for the findings,analysis, evaluation and conclusions as I know as a former marker that is what will dictate their grade. To ensure they have sufficient words for this important section I tell them to stick to 2,500 words from the front cover through to the ends of Part 2. Obviously other mentors have not latched on to why Part 3 is so critical but then I have had the advantage of years of marking RAPs! Even with 5,000 words to "play with' my mentees tend to exceed this without any padding so it would be well nigh impossible for them (in my opinion) to do justice to Topic 17 with fewer than 5,000 words

Thank you so much Gillian!

Please be aware that until Period 37 closes both mentors and current students are occupied elsewhere. Technical problems with the submission portal adding extra stress means you are unlikely to get a rapid response! BTW you need a mentor to supervise your work and a review of your research objectives and questions are the sorts of things you would normally discuss with your mentor

Hello Gillian, trephena I know the requirements state choose one company but will my research work be based on just one company?

The new topic title requires you to focus on weak governance issues in a particular organisation. In the context of this it may be appropriate to make comparisons with best practice found in other companies and therefore you may bring some examples, however these would be to compare and contrast aspects that are specifically weak normally in the main organisation, and/or perhaps might relate to the difference in the companies' responses if both companies had experienced a similar problem. From having mentored several students in P37 who chose T17 (who between them chose 3 different companies), we found a well researched report will mean that you will find the word count extremely challenging and therefore such examples should only be brought in when really relevant

Yes Ed your objectives look reasonable. However please note you should be sticking with your mentor and not seeking alternative advice unless there is something that is very contentious and an alternative perspective is necessary (which I am happy to advise on having been a marker for 14 years and having taught CG on Masters courses at Brookes). Let's put it another way - I would be very upset if a mentee of mine was asking around for advice - even it their intentions were good as it would imply they had little trust in my capabilities to guide them appropriately! (and therefore not a great start to the mentor-mentee relationship) :-D

Hello once again, this is neither MSc or PhD dissertation but is a literature review necessary for this research project? I don't have a mentor yet, I plan on submitting my rap next year. So I want to be fully prepared.

No a literary review is not required however a brief background to the development of CG is required. This does not have to be more than about a paragraph - this is to put your work into a context

"FaceBook making the headlines like this is demonstrating signs of weak CG - see https://www.bbc.co.uk/news/technology-46231284 It is the CEO who should be setting strategy and the Chairman scrutinising it -neither of which Mark Zuckenberg seems to be doing! It again emphasises how CG in the US lags behind the UK by not encouraging the separation of these two key roles. There are also problems in the way shareholder power is weakened in this organisation (and several major big name US companies) giving more voting weight to powerful insiders (directors and founder) to weaken any potential toshareholder dissent. See: https://variety.com/2018/biz/news/facebook-alphabet-corporate-governance-1202869861/ Someone has to take responsibility for the Cambridge Analytica incident - It is not acceptable to be ignorant of what is going on in your own company (just like VW's board with the emissions scandal could not escape liability as ignorance is no defence) and the buck stops at the top i.e. with the CEO There are clearly many issues at FB both with CG and its CSR (all the tax avoidance measures it takes worldwide and the moral responsibility it has to prevent fake news, bullying and pressures on vulnerable adolescents and children) as well as the Cambridge Analytica issue. This means it could also be used quite successfully for T20 too -depending on where you yourself decide to put the focus"

Hi, I Did the T17 in period 32 and now want to resubmit, can i still submit under old topic or do i have to change my topic to new version for period 38? please advise

You can check with [email protected] Even if not mandatory, I would advise you to go with the new title. The old title was changed because the reports were very 'wishy-washy' whereas the new title has a more practical aspect to it. Consequently demonstrating good analysis and evaluation (the most common reason for failure) is easier and a pass more likely with the new title and requirements

Hello guys, Sorry this may be a silly question, I've finished writing the RAP for next submission and having some difficulties with my mentor’s feedback. She is happy with the content in all three parts but it’s the layout that she’s suggesting that I amend. I just wanted to get a second opinion. The first disagreement we have is how to introduce the issues at Carillion and corporate governance. In part 1 of my RAP I’ve introduced some of the key issues briefly that occurred to ‘set the scene’. I’ve then gone on to give a brief intro into how corporate governance has developed since Cadbury. She has said that I should introduce corporate governance in part 2 when I introduce the Corporate Governance Code as my business/accounting model and introduce the issues in my part 3 before the analysis. Second is my project title. I believe from reading the information pack is that the title should follow the topic picked and have the chosen company adapted into the title ie ‘A critical evaluation of Carillion Plc’s corporate governance practices including an assessment of the origins of the corporate governance issues and the organisation’s response’ however my Mentor has said this in not the case. She has suggested a title along the lines of 'An evaluation of the corporate governance issues at Carillion Plc that led to the liquidation of the company'. I’m probably overthinking but I just want to get a first time pass before I fall back into the pressure of my final exams!!!

I don't normally like to comment about another mentor's advice unless it is clearly wrong and I think a student is being seriously misled. I have to say on the first point I am up there with your mentor and have advised my own mentees to do a potted history of CG either in Part 2 or at the very beginning of Part 3 to set the scene and to introduce the CG Code in a logical way. This way the finindings then flow as you go on to discuss Carillion in the context of weak CG. Regarding title I support you -this is based on having been a BSc Applied Accounting marker and an exam marker. All markers (including exam markers) are always a bit cagey about people who stretch a given topic title and twist it to suit their own preferences -time and again it comes up that students answer the question they hoped would come up rather than the one actually stipulated. I take your side especially as your emphasis should be evaluating the weak governance practices and not describing the factors that led to the liquidation -there is a subtle difference. That said, the marker will focus on your content and at the end of the day that is how they will judge your report. (Ironically in P37 I encountered this problem the other way round and had a student who insisted on using an alternative title although I warned against it!)

Thank you Gillian! Your advice is greatly appreciated.