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Remuneration committee role 3 Lernen beginnen
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To have an appropriate reward policy, | that attracts and motivates directors, | to achieve the long-term interest of shareholders.
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NEDs remuneration characteristic: 3 Lernen beginnen
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Consist of a basic salary and sometimes share awards | equity-based remuneration should be fully vested on the grant date, but still subject to applicable holding periods | performance measures remuneration not generally supported
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Remuneration - Company strategy dependence 3 Lernen beginnen
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Amount depends on company resources. | Remuneration levels in comparable companies. | Conditions throughout the company.
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Remuneration level is determined by: 2+2 Lernen beginnen
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Job description. | Significant proportion based on performance related elements. | Not too small – could lead to lack of motivation and underachievement | Not to easily earned to ensure that directors to improve performance to attract and possibly motivate if increase with performance
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Institutional shareholder intervention due to strategy - examples of concerns: 3 Lernen beginnen
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products sold. | markets serviced. | expansion developing.
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Institutional shareholder intervention due to Internal controls examples 3 Lernen beginnen
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failure in health and safety. | quality control. | budgetary control.
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Institutional shareholder intervention due to Operational performance Lernen beginnen
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in terms of divisions within the corporate structure that have persistently under-performed.
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Institutional shareholder intervention due to Remuneration policy might relate to...? 2 Lernen beginnen
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to a failure of the remuneration committee. | to self-serving executive rewards. self-serving - wyrachowany
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Institutional shareholder intervention due to Acquisitions and disposal Lernen beginnen
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When executive decisions that have been inadequately challenged by NEDs.
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Institutional shareholder intervention due to Succession planning 2 Lernen beginnen
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A failure to adequately balance board composition. | Or recommendation of replacement executives without adequate quality of the candidate.
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Institutional shareholder intervention due to Social responsibility example: 1 Lernen beginnen
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A failure to adequately protect to instances of environmental contamination.
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development that meets the needs of the present, | without compromising the ability of future generations.
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Sustainability is an attempt to provide the...? 3 Lernen beginnen
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_the best outcomes | for the human and natural environments | both now and into the indefinite future.
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Environmental footprint – an attempt to evaluate the size of a company’s impact on the environment in 3 respects: 3 Lernen beginnen
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Consumption of resources. | Pollution emissions impact on environment. | Measurement of both in terms of harm to the environment.
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Social footprint – evaluates sustainability in three areas: 3 Lernen beginnen
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Human capital. | Social capital. | Constructed capital
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Social footprint - Human capital Lernen beginnen
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Peoples health, | Skills, | Motivation. to take effective action.
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Social footprint - Social capital basics: 3 Lernen beginnen
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Networks of people.| The mutually-held knowledge and skills... | _they have in order to take effective action.
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Social footprint - Constructed capital examples: 4 Lernen beginnen
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tools | technologies | roads | infrastructures. _that people produce and use in order to take effective action.
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Environmental reporting - generic meaning Lernen beginnen
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The disclosure of information on environment related issues and performance by an entity.
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Environmental reporting typically contains details of environmental performance in areas such as: 2 Lernen beginnen
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Measures of emissions. | Consumption of resources. Like pollution, waste and greenhouse gases. | Such as energy, water and non-renewable mineral deposits.
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Drawback of social and environmental reporting 2 Lernen beginnen
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Additional cost of reporting systems | ambiguity of measures used
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Integrated reporting demonstrates the linkages between...? 2 Lernen beginnen
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_between an organisation’s governance | and the social and environmental context within which it operates.
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Integrated reporting can help business to take...? 2 Lernen beginnen
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To take more sustainable decisions. | To enable investors and other stakeholders to understand how an organisation is really performing.
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Integrated reporting should be a single report which is not...? Lernen beginnen
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IR is not mandatory in most jurisdictions. An integrated report could contain FS information, in which case the IR would fulfil statutory requirements whilst containing lots of other stuff that might be reasonable and useful... or which might be a waste of paper.
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Central to Integrated Reporting is the challenge facing organisations to create and...? Lernen beginnen
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_sustain value in the short, medium and longer term.
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An integrated report is a concise communication about...? 3 Lernen beginnen
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_about how an organisation’s governance, | in the context of its external environment, | lead to the creation of value.
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Institutions such as families | communities | businesses.
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Natural resources. | Also the capacity of the world’s carbon sinks — (forests and oceans) — to absorb the waste generated by economic activity. 1. E.g. iron ore, water, oil
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Material goods or fixed assets which contribute to the production process rather than being the output itself – e.g. tools, machines and buildings.
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4 Lernen beginnen
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Brands. | R&D. | Reputation. | External relationships. Proprietary information, also known as a trade secret, is information a company wishes to keep confidential. It may can include secret formulas, processes. It can also include a company's business and marketing plans, salary structure or customer lists.
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IR - Annual and intercompany comparability Lernen beginnen
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The information in the integrated report should be presented on a basis that is consistent over time and in the way that it enables comparison with other organisations.
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IR – Orientation to future and strategy. Highlighting...? Lernen beginnen
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Highlighting significant risks and opportunities flowing from the organisation’s market position and business model.
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IR – Stakeholder relationship 1 Lernen beginnen
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It should provide insight into quality of the organisation’s relationships with its key stakeholders.
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1 Lernen beginnen
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Identifying matters with ability to affect value creation.
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IR - Conciseness (Shortness) 3 Lernen beginnen
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Should give sufficient context, | to understand the organisation’s strategy and prospects | without being burdened by less relevant information.
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Reliability and completeness. IR should include all material matters, both...? Lernen beginnen
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_both positive and negative, in a balanced way.
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The AIDA Model identifies cognitive stages an individual goes through during the buying process for a product or service. It's a purchasing funnel where buyers go to and fro at each stage, to support them in making the final purchase. Lernen beginnen
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Awareness | Interest | Desire | Action
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Integrated reporting - value creation process 3 Lernen beginnen
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Value is created through a business model, | which takes inputs from the capitals and transforms them into outputs. | Over time it creates (or destroys) value for its stakeholders.
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Who should implement a sound system of internal controls? Lernen beginnen
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Who is ultimately responsible for internal control system? Lernen beginnen
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Who advise on establishing and monitoring internal controls? Lernen beginnen
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Who need to establish specific internal control for each business unit? Lernen beginnen
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Who need to evaluate the effectiveness of internal controls and recommend improvements? Lernen beginnen
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Who need to set corporate governance policy in respect of internal control procedures? Lernen beginnen
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What stakeholders are involved in risk management and internal control? Lernen beginnen
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CEO | Board of directors | Risk committee | Executive management | Internal auditors | Unit heads | All employees | External auditors
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Attempt to ensure that risks are minimised
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Internal control system definition: 3 Lernen beginnen
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Network of systems established in an organisation to provide reasonable assurance | that organisational objectives will be achieved Network of systems | to provide reasonable assurance | organisational objectives.
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Internal management control Lernen beginnen
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Procedures and policies in place to ensure that company objectives are achieved.
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Internal control system objectives: 3 Lernen beginnen
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Safeguarding assets. | Prevention and detection of fraud and errors. | Accuracy and completeness of accounting records.
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Internal control system benefits: 3 Lernen beginnen
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Effectiveness of operations. | Reliability of financial reporting | Compliance with law
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Sound internal control system characteristics: 3 Lernen beginnen
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Embedded within operations. | Able to respond to changing risks. | Procedures for reporting control weaknesses.
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Internal control systems by COSO Lernen beginnen
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‘Tone at the top’ or the ethics and culture of the organisation. Set by management philosophy and style.
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Risk assessment procedure. 3 | Internal control systems by COSO Lernen beginnen
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Set objectives of organisation. | Then for each objective, identify and assess the risk affecting that objective. | Distinguish between controllable and uncontrollable risks.
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Internal control systems by COSO Lernen beginnen
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Policies and procedures ensuring instructions of management are carried out.
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Information and communication 2 | Internal control systems by COSO Lernen beginnen
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Communicate correct information to correct people. | Need internal and external information systems.
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Monitoring is a ....... Normally doing by ...? 2 | Internal control systems by COSO Lernen beginnen
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Control of controls | normally by internal audit function.
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Strategic level management responsibilities for internal control and risk. 3 Lernen beginnen
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Monitoring organisation as a whole. | Reviewing IC systems. | Assess the risk outcomes of different decisions.
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Tactical level management responsibilities for internal control and risk 3 Lernen beginnen
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Implement strategic decisions. | Inform strategic managers of control weaknesses. | Advise them on risks identified.
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Operational level management responsibilities for internal control and risk. 3 Lernen beginnen
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Identify risks at operational level. | Report weaknesses to tactical managers. | Controlling day-to-day operations.
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Information characteristic for STRATEGIC level Lernen beginnen
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Information characteristic for STRATEGIC level Lernen beginnen
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Information characteristic for STRATEGIC level Lernen beginnen
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Information characteristic for STRATEGIC level Lernen beginnen
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Information characteristic for STRATEGIC level Lernen beginnen
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Information characteristic for STRATEGIC level Lernen beginnen
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Information characteristic for STRATEGIC level Lernen beginnen
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Information characteristic for STRATEGIC level Lernen beginnen
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Information characteristic for STRATEGIC level Lernen beginnen
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Information characteristic for Operational level Lernen beginnen
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Information characteristic for OPERATIONAL level Lernen beginnen
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Information characteristic for OPERATIONAL level Lernen beginnen
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Information characteristic for OPERATIONAL level Lernen beginnen
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Information characteristic for OPERATIONAL level Lernen beginnen
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Information characteristic for OPERATIONAL level Lernen beginnen
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Information characteristic for OPERATIONAL level Lernen beginnen
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Information characteristic for OPERATIONAL level Lernen beginnen
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Information characteristic for OPERATIONAL level Lernen beginnen
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Risk management strategy needs to be develop for frauds. This strategy should include three key elements: 3 Lernen beginnen
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Fraud prevention | Fraud detection | Fraud response fraud detection - e.g. performing regular checks, stocktaking or cash counts.
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Fraud prevention examples: CAWS Lernen beginnen
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An anti-fraud culture | Risk awareness | Whistleblowing | Sound IC systems
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Organisations response to fraud: 3 Lernen beginnen
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Internal action, in accordance with personnel policies | Civil litigation for the recovery of loss | Criminal prosecution through the police
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Factors affecting the need for internal audit: 3 Lernen beginnen
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Scale and complexity of company activities | Increase in unacceptable events. | Changes in key risks.
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It is now common for companies to use a combination of push and...? Lernen beginnen
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Disclosure – general principles 3 Lernen beginnen
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AGM is the opportunity to communicate with shareholders. | Annual report only legally-required information to shareholders and other stakeholders. | Mechanism which gives the transparency to the governance. AGM is the most important, perhaps only opportunity for the directors to communicate with shareholders.
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Organisational risks example: Lernen beginnen
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the organisation is too moribund and too slow to respond to developments in the market. moribund - chylący się ku upadkowi
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Inadequate system risk example: Lernen beginnen
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management information inaccurate and out-of-date.
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theft of cash or inventory.
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an employee acts unethically and the company’s reputation is damaged.
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Reputational risk example: Lernen beginnen
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products get a name for being unreliable so the company’s reputation is damaged.
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Mergers and acquisitions.
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Conflict of interest definition: 2 Lernen beginnen
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Situation in which an individual has compromised independence because of another countervailing interest which may or may not be declared. compromised independence | countervailing interest (wyrównawczy) Shareholders have the right to expect each NED to act wholly in the shareholder's interest. Any other factors that might challenge this sole fiduciary duty are likely to give rise to a conflict of interest. Risk that NED take own personal benefits first.
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Discuss the ways in which CSR and the ethical stance might differ between non-profit and a commercial business. 3 Lernen beginnen
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Strategic purpose. | Measures of success. | Directors and staff attitude to financial benefits.
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Four roles of nomination committee: 4 Lernen beginnen
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Policy determination. | Each directors is rewarded for individual contribution. | Annual disclosures to shareholders with remuneration breakdown for each individual with explanation. | Law and voluntary code compliance ensuring.
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Eco-Management and Audit Scheme (EMAS) is a management instrument to? 3 Lernen beginnen
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Evaluate, | Report, | and Improve organizations environmental performance.
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What is the main use of EMAS? Eco-Management and Audit Scheme Lernen beginnen
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Use the EMAS registration to demonstrate to customer, suppliers and investors your commitment to environmental care and improvement. commitment to environmental care
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ISO for international standards on environmental management: Lernen beginnen
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3 Lernen beginnen
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Guidance on the development of environmental management systems. | Guidance on environmental auditing. | Coverage of life-cycle issues.
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Triple bottom line accounting elements. 3 Lernen beginnen
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3P Profit: nothing new here as this is the traditional reporting of financial performance.
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Triple bottom line accounting (3Ps) Lernen beginnen
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It deals with environmental and sustainability issues, sometimes known as the organisation’s environmental footprint.
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2 | Triple bottom line accounting (3Ps) Lernen beginnen
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Metrics can include reporting on the ethnic and gender composition. | Comparisons of the wages between different groups. It deals with social issues.
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2 Lernen beginnen
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How profits can be increased (in a profit-seeking organisation). | How service levels could be improved in a not-for-profit organisation.
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The business case techniques examples: 3 Lernen beginnen
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Cost-benefit analysis. | NPV. | Decision tree.
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The project benefits really begin to be more easily dealt with once they change from...? Lernen beginnen
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_from measurable to quantifiable. Because predictions are needed for DCF calculations.
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The objectives and deliverables of the project are never really well defined | or keep changing.
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The project sponsor can be regarded as a person to whom... 2 Lernen beginnen
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to whom the project belongs | and very often is a person or department which is providing the funding. The person or department who wants the project to be undertaken.
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The project manager responsibilities? 3 Lernen beginnen
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_day-to-day responsibilities | for looking after the progress of the project | and in particular he will be looking after a project team.
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The project manager useful abilities: 3 Lernen beginnen
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Technical ability. | Negotiation ability. | Reporting on progress and difficulties.
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Post-implementation review characteristics. Lernen beginnen
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This is about what the project achieved. If the project has delivered anything of sufficient value.
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Difference in make-up of AC and RmC against Nomination Committee and Risk Management Committee?. Lernen beginnen
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Nomination committee and Remuneration Management Committee should comprise majority of NEDs. In contrast to AC and RmC only Neds.
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Risk Management Committee report to...? Lernen beginnen
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RC B
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Risk manager report to...? Lernen beginnen
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Risk Management Committee. Chief internal auditor (CIA) report to the Audit committee.
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Operational risks are managed at ...... level. Lernen beginnen
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At risk management level (not necessarily board level).
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Improvement sharing clause. Lernen beginnen
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In the licensing contract it will ensure that patented technology will be improved and perfected with several manufacturers.
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Voluntary disclosures are the way of... Lernen beginnen
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of redressing the information asymmetry that exist between management and investors.
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Voluntary disclosures benefits: 3 Lernen beginnen
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Fuller picture of the company. | Annual report more forward looking (predictive). | Enable the company to address specific shareholder concerns as they arise (such as responding to negative publicity).
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Nomination committee report to...? Lernen beginnen
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NC B
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