T17 Corporate Governance

Most definitely - both are mentioned in the Cadbury report and the first Principle of focus in the UK Code [ 2014/ 2016/ 2018] has always been on effective leadership. Now however stewardship is only touched upon in the UK Code 2018 itself as there is a separate Stewardship Code 2020 [an update of the Stewardship Code 2012].

Thank you so much for clearing my confusion. I'm have finished my report and now an moving towards the appendices. Can you guide a little about what goes in in Excel file. Do I just make the financials in excel or some other things are required as well?

As per the Assessment Criteria p.17-21 of the June 2021 Info Pack, you need to demonstrate use of a VARIETY of different formulae. I depends on what company info you have but there should be the potential to take numerical data from the Annual Reports and produce some graphs and from the data work out some percentages and averages and the like. I normally suggest at least 4 different formulae so that the AC are fulfilled

First you need a section where you set out what the issues were. Follow this with an application of a Code (OECD/UK/ domestic code) making appropriate comparisons between what the Board did, what it purported to have done at the time (company statements) and the various code recommendations. Note my use of the PAST tense. Before the conclusions you should include the company response -what it did in the light of breaches and identified weaknesses and anything it continues to do. Think of it a bit like story telling - you wouldn't normally have the 'ending' early on Please see the University guidelines on what evaluation means and avoid overly describing events without examining them in a broader but relevant context. Recommendations are NOT required for Topics based on secondary data I.e.Topic 17 though they are usually mandatory for those based on primary data collection

Thank you for the wonderful insight. I'll keep them in mind while making my excel file. My project os on Luckin Coffee. I was re reading my report. In the Impact on Stakeholders part, I have used me mendelow's matrix and have discussed the following stakeholders 1. Chairman and CEO, their net worths etc were greatly effected. 2. Sister Concerns (these are CarInc and UCAR) they had involvement in fraud perpetration. 3. External Auditors 4. China Concept Stocks Do you think these are adequate?

Personally I tend not to recommend Mendelow's Matrix for Topic 17 as the title does not stipulate the impact on stakeholders [however it does for Topic 20]. It is important to consider the Company Response as that is part of the topic title - so what the company did in respect of the weak governance and fraud [Board refreshment, removal of chair/ CEO that type of thing] As for a model in addition to the Codes you could try applying the Fraud Diamond or Executive Fraud Triangle [both extensions of Cressey's Fraud Triangle]

Not a silly question but there is no definitive answer as it depends on the context and company. For example with most companies I would expect you to have dealt with the Code in the main analysis and with some companies such as those that have collapsed any further application of the code in the response section would be an irrelevance. However where a company say lacked sufficient independent NEDs but has refreshed its Board or committee(s) as part of its response it might be appropriate to comment that having done so, it is now compliant with Code section x

There is no mandatory way to present this, the important thing is to cover the company response adequately. Remember that in some cases the company response may develop over time e.g. , CEO removed, subsequently the Board is refreshed, new policies and procedures implemented, new external auditors appointed etc. so the response which may have been slow becomes more proactive over time. Where the company has collapsed then obviously you have to examine how failure by the Board in doing less than was required to ensure long-term sustainability in terms of managing the elements of its governance e.g. inadequate risk assessment, inappropriate strategies, lack of board independence led up to its demise. Although this can be mentioned as you go along I would recommend having a final section before the conclusions that deals with/sumarises this

Thank you for such detailed response! About discussing Impact, do you think discussing Impact on various Stakeholders could constitutes as a fail because this was suggested by my mentor. I am/was not aware of the fraud triangle model.

As long as you deal with the topic title fully, evaluate [rather than just describe what went wrong] and ensure that you have complied with the Assessment Criteria [including reference appropriately and have a good structure] then you should be able to pass. Most fails relate to insufficient evaluation or not demonstrating adequate understanding of the models used. Poor structure can also sometimes lead to a fail because if your report 'jumps about' then the marker will struggle to make sense of it. A good way of avoiding this is to give a close friend/ relative or colleague your report to read and to ask them to comment on anything that they don't understand and/or indicate areas where they may have struggled to make sense of what has gone on. The impact on stakeholders is certainly worth bringing in but unless Mendelow's Matrix is your MAIN model this does not have to be too detailed. [As I may have mentioned it is not one of my favourite models for this topic as I believe there are usually better models - depending on what the weak governance entails].

Thank you for such keen advise. I'll surely get it read from a closed one. I had one more confusion, is it necessary to include limitations of Mendelow's Matrix in Part 2 of the report. If yes, do we also have to mention how we overcame them?

Also I am confused about adding limitations for CG codes used. I used the regulations stipulated by SEC and NASDAQ for US-listed foreign companies. Do these limitations have to generic? I am lost as to what kind of limitations are required.