- August 25, 2019 at 1:57 pm
Thank you so much !
Miss Gillian you are a life saver first of all.
You made things quite easier than I really expected to be.
Well for this ” With profits and revenue these may have fallen because of inappropriate strategies taken by management and/or lack of foresight on their part in anticipating environmental changes [Think about PEST Factors to understand this comment]”
I had a talk with my mentor regarding pestel, and he said pestel does not fit in CG as it is not CG theory.
” Note you could also compare the independence of Uber’s board with what the UK Code 2018 terms as independent as there is a difference of opinion between US boards and what is considered to be independent in the UK – another thing you could discuss. Size of boards tend to be larger also in the US and bigger is not always better when it comes to decision-making”
this is an excellent which I missed out completely. I had no idea about this, because though uber’s board is already smaller.
Thank you once again
I will try to make some amendments with the board point. I have not mentioned specifically anything about the years of UK codes as I have used my texts and kaplan notes for writing about CG.
And for the stakeholder theory, yes I would put this into last section.It would be a massive help if you can help me by telling me a bit about ratio analysis section.
Can I put this into this way like
profits and revenues dramatically fallen over past few quarters due to wrong decisions taken by the board of management and some key personnel were resigned in the meantime.
Would it be okay ?
I think you are right. Topic 8 is most preferable to students, but I decided to work on this topic because I thought it would be help me to refresh my knowledge for SBL too.August 25, 2019 at 6:56 pm
A formal PESTEL analysis is not required in your report but management need to incorporate the company strengths and factor in aspects and changes in the business environment that may impact on the organisation when formulating strategies so that implemented strategies are appropriate. (Failure to do so will result in missing opportunities and possibly mean competitors can steal the lead). Strategies are developed by executive management under the CEO but should be reviewed under UK best practice by NEDs under the leadership of the Chairman (Principle A UK CG Code). However you may find in many US companies they don’t separate out the roles of CEO and Chair so this opportunity to question and discuss strategy objectively is lost.
Fine if the board is small but are most of the members connected with the CEO (as is the case with Facebook – most are Mark Zuckerberg’s friends and family)? Lack of varied opinion on boards can mean optimum decisions can be comprised, alternatives overlooked and the CEO dictates everything.
Board resignations if sudden indicate dissent and interfere with operations and again impact on the decision making process.
You will need to reference your work throughout, so though you put in examples to illustrate the points you will need to support your evidence with proper references.
Well done for taking on the challenge of Topic 17 !August 26, 2019 at 12:19 am
Thank you so much for elaborating the points with perfect set of examples.
I will take all these into consideration and rework on my project during the week and get back to you.
I’m feeling much relieved ?October 2, 2019 at 2:20 pm
Hi Gillian and Trephena
I trust i find you well. Thank you so much for this forum, I have been following from the terraces. It has contributed a lot to my RAP. Please bear with me I have a several questions which might also help someone with similar issues here. I need a second opinion to gain confidence. I am doing T17 on ZESA Holdings, a state owned producer of electricity in Zimbabwe.
1. To evaluate the CG practices at ZESA
2. To assess the origins of CG issues
3. To assess the response of organisation to the CG issues and the impact on stakeholders.
Are these okay?
On Data Sources;
I could not find any of the company’s CG reports, audit reports, financial statements etc on their website or anywhere else. However, the information on many of the governance issues is widely available online. I am aware that its necessary to use both company and external sources for a balanced analysis. Am I penalised for failing to cite any of these company reports even if I have used other sources outside the company? I have also felt that I can actually point out the company’s failure to disclose these reports to the public as a sign of weak governance. Can I escape this one in your view?
On Business models/techniques:
In part 2 I have outlined the OECD Corporate Governance Guidelines for SOEs and discussed its application and limitation. Is it fine to use int’l best practice code like OECD when a local code is available in Zimbabwe? In part 3 when I am now comparing company practices to the code/best practice, is it necessary to repeat what the code says when i have already said it in detail in part 2? Or in part 3 I simply need to simply say, for example; “guideline 2 of the CG code” since I have already outlined the guideline in part 2?
And then in Part 3:
Government as the shareholder enacted new legislation on SOEs, fired top management, introduced salary caps for executives, appointed a new Board, appointed independent auditor to investigate corrupt tenders and in response to the governance malpractices. Can this fall under response by the organisation? Could response by the organisation also mean justification by management of the actions or decisions they took during the time? What would be the best structure or approach to tackle Objective 3?
Sorry for a long list of questions. Would appreciate your advice.
Thank you.October 3, 2019 at 6:29 pm
Can I ask what sort of calculations should be used in CG? There is an independent report that was done and had calculations based on an underestimation, can I use those figures?October 20, 2019 at 6:52 pm
time is running out and I’m still stucked at part C part of the project and unable to bring out further analysis.
while doing this project, I am facing serious trouble with my mind and it seems like everything is jammed up. I can’t even concentrate on my SBR exam.
I have included quite a few issues and after having a recent meeting with my mentor, He said my project lacks analysis.
I have tried to put this things from my way and not being able to express it in a structural manner. I can understand that
How do I overcome this issue, like in part C
what minimal level of effort is required ?October 24, 2019 at 9:04 pm
Hi Trephena and Gillian,
I had a query regarding the choice of company for T17, specifically about the timeline from when the corporate governance issue took place, to when our RAP is submitted.
I had initially planned to submit the RAP in the previous periods and had completed 80% of the RAP on Tesco plc, but unfortunately could not submit it earlier, and I’m therefore looking to submit it in Period 39.
However, Tesco plc had its corporate governance scandal around August 2014, and the topic itself tells us to select a company that has been “identified as having weak corporate governance structures within the past 5 years.”
Considering 5 years from August 2014 is August 2019, is Tesco plc a suitable organisation for T17 to be submitted in Period 39 (November 2019)?
Would really appreciate your help.
Thanks in advance.October 26, 2019 at 5:20 pm
Yes this is a difficult one as technically it has expired. As I cannot give you a reliable answer you will have to email firstname.lastname@example.org.UK as they are the only ones who can answer or give you permission to submit on it.October 26, 2019 at 5:34 pm
Apologies @14munashe for not getting back to you (I had been on holiday and got caught up on lots things on my return and unfortunately your query got overlooked).
Your approach is sound. Just make sure you apply the OECD Code as thoroughly as possible and supplement this with other Code(s) such as the UK CG Code as examples of best practice
Yes your Part 3 response is good and explain the implications behind this for stakeholders. You might also refer to the work of Transparency International in trying to stamp out corruption. It is hard to discuss structure in the abstract and is something your mentor who is more familiar with your work should be able to advise you on.October 27, 2019 at 2:10 pm
WeWork looks like a really interesting company for topic 17. So many CG problems and scandals…October 27, 2019 at 11:24 pm
@mwiser the ratios very from company to company . You may use someone else’s figures but you have to produce a spreadsheet showing calculations. Percentage changes in share price, year on year decrease / increase in earnings are some of the things you might be able to do if they are relevant. Alternatively changes in liquidity, debt to asset ratios related to governance issues.October 27, 2019 at 11:27 pm
@proticz -please remind me which company you are doing.October 28, 2019 at 9:38 am
Thank you so much Gillian for your valuable feedback. I will adjust accordingly. My mentor is not available at the moment so i have relied much on information on this thread for guidance.October 28, 2019 at 10:37 am
Yes @tbm13 – WeWork is an interesting case. My only reservations about using it currently for Topic 17 is that it is a US company and as the IPO didn’t go ahead I am not sure what framework could be used to evaluate it against. I think most US CG legislation (SOx and Dodd-Frank) only apply to listed companies (in fact I recall Trump may have specifically repealed parts of Dodd-Frank to remove the burden on some companies)
Also whereas I would probably have previously given the green light for this, having read some marker feedback telling a student who did Facebook for T17 that they needed to apply the UK CG Code systematically to their work (which seems non-sensical advice given it is not subject to the UK Code ) I am now more cautious when considering overseas companies….October 29, 2019 at 11:04 am
I am back with somewhat a silly question. I am now satisfied with the structure of my final report but I am struggling with word count a bit. I have decided to write short recommendations in bullet form as below, for example:
– Company WYZ should reduce unbudgeted expenditures to improve profitability
– Govt should follow a more transparent selection of Board members to improve professionalism and accountability.
Would this approach be sufficient if I want to include recommendations in my report?
Thanks for helping.October 29, 2019 at 11:15 am
I also wanted to know from other students or Gillian in your experience as marker/mentor if anyone has passed without putting recommendations in their RAP?
Thanks again.October 30, 2019 at 6:55 am
Recommendations are NOT required for topics using secondary data. (Only those where a student works for the organisation or has close connections and has used primary data e.g. questionnaires or interviews).
Do ensure you cover the company response adequately. though.
Markers are more strict about using a framework for the analysis I.e. application of a CG code (to the point they often expect the UK Code to be applied to overseas companies!!!) Whilst elements of this can, I am querying how, when many countries don’t have a Code and often the issues relate to bribery and corruption (which are not covered by a Code anywayay), students can be expected to do this and why markers are insisting on this non-sensical requirement.
I am also pointing out that this acts to restrict the choice for overseas students who then can’t use a local company and probably as such is indirect racial discrimination. The latter being illegal under UK law.
If any student has been failed and told to apply a Code when there is little scope to do this because of the above CG issues (bribery, corruption, insider trading and directors’ fiduciary duties). Please let me know (contact me via my website) as If it is racial discrimination it needs to be brought to the attention of very senior personnel at the UniversityOctober 30, 2019 at 10:43 am
Thanks a lot for the heads-up on recommendations. On responses, I am confident I covered that part adequately.
I am just wondering why this is the case on CG codes now. I applied the OECD CG Guidelines for SOEs because I am researching a state-owned company in my country. I am now a bit confused. I justified in my report why I think this OECD Code is the best to adopt.
This strictness for international students should rather be made clear in the RAP guidelines. As you pointed out, I believe this is confusing and unfair if we are not told about specific frameworks which international students should use. The UK Code would limit me because it wont cover various aspects of SOEs. I however, covered a few areas of the UK code as you earlier advised. My only fear would be on technicalities such as using the wrong code or organisation for my analysis.October 30, 2019 at 6:05 pm
Thanks for your reply
I’m doing for Uber
Really tensed whether should I go for period 39 or 40November 1, 2019 at 11:21 am
Sorry 14munashe I didn’t mean to panic you as you should be ok if you used the OECD code systematically in your work. (The basic fact is they try to insist on a code of some sort)
The point I was trying to make is that not all CG issues are covered by a Code particularly in some developing nations where the big challenge to CG comes from systemic corruption. So being expected to apply a Code is not realistic or appropriate for many of the issues.
I find some of the markers do not really seem to understand CG – which is quite ironic really and they try to apply a straight jacket of ‘one size fits all’ when clearly it doesn’t. I have a resubmitting student who is in Sri Lanka and she was told in her previous feedback to apply the UK Code. We actually tried to do it but it just didn’t work as the Code is silent on bribery, corruption, inside trading and barely touches on fiduciary duties which are the issues in her chosen company.
It is not a case of telling students in the Info Pack to apply a Code it is more a case of OBU ensuring their markers are up to the task in hand and up to speed on how CG works (or more appropriately doesn’t work) outside the UK so that they can adopt the correct approach in their marking when confronted with Topic 17s on overseas companies.
As I said earlier – restricting the choice of overseas students by insisting on the application of a Code is wrong and is INDIRECT racial discrimination (because it places a racial group I.e non British at a disadvantage because it means they could have more difficulty in passing if choosing a company from their own country if they can’t apply a code).
I encourage anyone who has been failed because of this where a Code, like in my student’s case just doesn’t fit their company’s problems and circumstance to contact me as it needs to be flagged up with the University’s authorities. It is a form of prejudice and as explained, puts overseas students at a disadvantage when they choose a domestic company and as such it is illegal under UK LAW.November 2, 2019 at 4:42 am
Hello miss Gillian
I have chosen Uber. what do you think about this company?
a number of CG scandals are out there and it’s a hotcake item for this topic, I reckon.
But, the major problem is not a number of information is available for this company. Like no information about number of NEDS, the number of board meetings and all those stuff which could be linked with the CG Code.
But they have badly performed in terms of good CG. Their management has serious issues.
what’re your thoughts on this?November 2, 2019 at 6:39 pm
yes there are a lot of CG issues prevalent here in Uber. Be guided by the CG Code (where possible) is my advice when structuring your work (as the marking team is too inflexible to consider that this is not always appropriate). For example use the 2016 Code principles (Leadership,Effectiveness, Accountability, Remuneration and Relations with shareholders) or the newer 2018 Code (Leadership, Division of responsibilities, Composition, Audit, risk and internal control and Remuneration – note the UK Stewardship code now deals with relations with shareholders)
The Board members are set out here https://www.uber.com/en-GB/newsroom/leadership/
So I suggest that you find out about all of them by conducting internet searches and rate their independence using the Provision 10 of the 2018 Code [and also look at Part 3 of the same Code]. You might also consider the proposal to increase the board size to 17 (which would be considered excessively large in the UK – though the Code does not prescribe an actual number, most UK Boards are comprise about 10 directors) You could introduce some critical thought with this by looking at Janis 1972 and ‘Group Think’ and how large boards tend to promote this.November 4, 2019 at 8:48 pm
Another rounding up question please????.
When outlining the code in Part 2 (Business models and limitations) is it really necessary to explain each provision. I have explained each provision with about 3 or 4 lines and I feel it ate on my word count unnecessarily which i could have used to add more flesh in part 3. I would like to know your advice on the provisions part if we should explain the provisions or merely state them since we are going to discuss them in Part 3 anyway.
Not sure if my problem is clear. Thanks for your help once again.November 6, 2019 at 10:20 am
thank you very much, Miss Gillian,
First of all a big thank you to say that yes Uber has serious corporate governance issues.
I have chosen this company on the basis of the trending topics on twitter and business journals, had no idea before.
I wanted to come up with something fresh and updated. Uber has recently become a public company and this also taken into consideration in my research.
but the main focus is on the former CEO who had a very aggressive approach and for that reason, Uber had serious difficulties in CG.
thanks once again for the suggestions
yes, I have structured in the same manner as you have mentioned. Also followed 2016 UK CG code. ( mentioning about Leadership, Effectiveness, Accountability, Remuneration and Relations with shareholders)
and also included stakeholder and agency theory.
” leadership, Division of responsibilities, Composition, Audit, risk and internal control and Remuneration – note the UK Stewardship code now deals with relations with shareholders)”
all mentioned in my research.November 6, 2019 at 12:03 pm
14munashe – you should provide some overview of CG and the development of Codes in Part but then focus on the principles/ provisions that are relevant to the weak governance to your organisation (because otherwise as you say it eats up the word count and in fact doesn’t really add much value).
With my own students I get them to use the main relevant provisions/principles as the framework for their evaluation in Part 3 and as there is nothing much to say about those provisions that are not relevant they are not covered. For example what is the point about commenting on attendance at meetings per se? This would however be relevant if the meetings were infrequent and many directors had been absent and/or if the Board members had so many directorships and responsibilities elsewhere that they could not possibly have given full attention to meeting preparation and making a proactive contribution (as was the case at Patisserie Valerie); or the scope of the meeting would be too much to be accomplished in one day (e.g.the agenda for some of the Carillion audit committee meetings is too intense for it all to be satisfactorily covered in one meeting and shows that more frequent meetings would have been required to cover the issues diligently)
So in short – use the code as a framework but put the emphasis on appropriate evaluation of relevant provisions/ principles in the proper context (like the examples I have given) rather than routiely going through them one by one
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