SBL key points to remember

Points to remember

?Internal audit is tasked by the audit committee
?Boards should contain half NEDs
?NED’s should be independent and free from bias
?NEDs should not have worked for the company in the past 5 years- UK CGC
?Nominations committee is required
?Discussion and setting of strategy is a high priority
?Training and Proffesional development is an important art of CG
?Nominations committee is made up of NED’s
?Nominations committee estbalishes the skill , knowledge,experience possessed by current board and notes any gaps that need to be filled
?NC acts to meet the needs of continuity and succession planning
?NC establishes the desirable size of the board
?NC committee ensures the board is balanced and diverse
?A stakeholder is any person who can affect or be affected by an entity
?Key external shareholders- Government, shareholders,
?Shareholders have the right to have their investment managed in such a way that wealth is maximised
?Shareholders can hold directors to account
?Mandelows matrix – Stakeholder mapping ad=nd stakeholder influence on an organisation
?Performance measurement of public sector – 3Es( Economy, Efficiency ,Effectiveness
?Common way for high interest, Low power stakeholders to gain influence is to act together
?Many stakeholders act as one to mobilise public opinion
?Transparency is a default position of openess and and disclosure rather concealment
?Fairness is best expressed as the neutrality of the accountant
?Strategic CSR is the balancing of creating Economic value with social value, and also how to manage stakeholder relationships especially those with competing values
?When CSR is undertaken to maximise long term economic benefits, it is Strategic CSR
?Strategic CSR supports the main business areas of the business
?Strategy is the rocess of building value Q12 done
?Benchmarking is the process of comparing a product or service with the best in class
?Types of benchmarking
1)Internal
2)Industry
3)Activity
4)Generic

?Balance scorecard measures performance from 4 perspectives
1)Financial- how do we look at our shareholders
2)Customer – how do our customers see us
3)Internal business – What must we be good at
4)Learning and growth- how must we learn and grow to meet changes in the business environment

?Balridge model of performance excellence
?

E busines
?Shifting to E business can lead loss of personal touch
?E business can lead to greater insights about customers
?Problem with E business is customers can compare prices
?Internet has weakened industry profitability and cheaper to hold onto operational advantages
?Tuckers 5 question model
1)Profitable
2)Legal
3)Sustainable
4)Fair
5)Right

?2 things that provide competitive advantage are
1)Resource
2) competencies

?Strategy is the direction and scope of the organization over the long term
?Strategy dictates the resources an org requires and how these resources should be used

3 levels of strategy- 3 levels must be consistent
1)Corporate strategy
2)Business Strategy
3)Operational Strategy

?A mission is the most generalized type of objective
?Smart- Specific, Measurable, Attainable, result oriented, time bound
?JSW 3 stage model- Establish strategic position, choose strategic direction, put strategy into action
?Emergent strategies evolve over time
?Logical incrementalism is the view that strategy is not created by evaluating all options
?Freewheeling opportunits reject the need for long , intensive planning

Scenario planning
?Identify the scope of the scenario (Key pestel factors)
?Identify different possible futures for each scenario
?Build scenario
?Eliminate highly improbable scenario
?Flesh out possible scenario
?A capability usually requires a combination of resources and competences
?COSO provides assurance that an org is operating effectively and efficiently
?COSO risk types- Strategic, Operational, Compliance, Reporting
?Risk management should follow ALARP
?Entreprenurial organisations do not usually have specialised departments for different functions
?Shared service center is an example of internal outsourcing
?Diviisonalisation is breaking down units ingto Smaller Business units
?Accountability- Taking responsibility for your actions
?Chairman carries authority of the board
?CEO has authority delegated by the board
?Having power concentrated in one person can lead to abuse of power
?In US role of executive chairman is common
?Customer pay more when there is elasticity of demand for the product
?Added value can help charge high prices
?Questionaires, Survey is a good of monitoring the success
?Risks are dynamic and change with the environment
?Riks changes in non static environments
?

Brainscape notes

?Five perspectives of leadership
1)Trait approach
2)Behaviour approach
3)Power influence approach
4)Situational approach
5)Integrative
?Leaders- Transactional vs transformational
?3 levels of strategy – operational, Corporate, Business level
?4 stages in risk audit- Identify, asses, review, report
?Agency theory assumes that agents and principal will act in their own self interest which may not be aligned
?Mandelow matrix is used to asses how org should respond to its shareholders
?Change ca be classified with the extent of the change required , and the speed required
1)Adaptation- slow and gradual. Based on existing, culture process
2)Evolution- change its culture over time. No immediate need but vital for org success
3)Revolution- Rapid and fundamental change. Org facing pressure, Strategic flux.
4)Reconstruction- much quicker change, bought about by external pressures. COuld be low performance
?Benefits of CG
1)Risk management
2)Overall business performance goes up
3)Defines clear accountability
4)Provides an adequate system of internal control, from top to bottom
5)Best practice guidelines are achieved
6)Encourages ethical behaviour and CSR
7)Safeguars firm from misuse of assets
8)Can attract new investment, esp in developing countries