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Le Go > 7 - The governing body and strategy > Flashcards

7 - The governing body and strategy Flashcards

1
Q

What is considered the strategic expectation in a commercial organisation?

A

Maximising the long-term return to owners and enhancing the value of assets - promoting the success of the company

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2
Q

Governance involves responsibility and accountability for

A

the satisfaction of stakeholder expectations

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3
Q

What sits in the middle of the intersection between governance and operational management?

A

The role of the CoSec / governance professional

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4
Q

Operational management involves responsibility and accountability for

A

the delivery of process

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5
Q

Key differentiator between governance and operational management

A

Timescale involved

Op. management - short-to-medium frame

Governance - long-to-medium frame

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6
Q

Strategy should be aligned in triangulation with:

A

Risk and Control

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7
Q

4 stakeholder groups which must be considered per S.172

A
  • Members as a whole
  • Employees
  • Suppliers and customers
  • Community and environment
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8
Q

2 key benefits of controlling risk

A

Maximising the upside

Minimising the downside

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9
Q

Other than consideration of stakeholders, other required aspects of promoting success of company per S.172 (3)

A

Long-term consequences

High standards of business conduct

Acting fairly between members

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10
Q

3 areas in which stakeholders can be classified

A

Internal (owners and employees)

Market (suppliers and customers)

External - direct (banks) and indirect (government, environment/community)

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11
Q

Primary and secondary expectations of owners

A

P - financial return
S - added value

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12
Q

Primary and secondary expectations of employees

A

P - pay
S -work satisfaction, training

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13
Q

Primary and secondary expectations of customers

A

P - supply of goods and services
S - quality

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14
Q

Primary and secondary expectations of creditors

A

P - creditworthiness
S - payment on time

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15
Q

Primary and secondary expectations of suppliers

A

P - payment
S - long-term relationships

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16
Q

Primary and secondary expectations of the community

A

P - safety and security
S - contribution to community

17
Q

Primary and secondary expectations of government

A

P - compliance
S - improved competitiveness

18
Q

What does stakeholder mapping involve?

A

Look at the levels of power and strategic influence of different stakeholder groups and considering the impact of not satisfying their expectations

down the left - low/medium/high power to disrupt business

across the top - low/medium/high interest in business

19
Q

Stakeholder mapping - 4 groups into which stakeholders will be categorised and how org needs to engage with them

A

Low power to disrupt, low interest - monitor
Low, high - keep informed
High, low - keep satisfied
High, high - actively engage

20
Q

5 pros of stakeholder engagement process (there are more)

A
  • Aids development of long term strategy
  • Allows development of shared objectives
  • Aligns strategy with activities of other orgs/groups
  • Deters high risk activity
  • Improves how org is viewed by prospective stakeholders (think investors)
21
Q

4 cons of stakeholder engagement process (there are more)

A
  • Impossible to satisfy everyone (usually)
  • Process can be long
  • Danger of interference from stakeholders if strategy needs to shift (or difficulty to change strategy without alienating stakeholders)
  • Reduced independence to respond quickly
22
Q

Two extremes of power dynamic

A

Traditional - centralised, bureaucratic, structured

Empowered - devolved, participative, fluid

23
Q

Within which extreme of the power dynamic is their a greater ability for stakeholder influence

A

Empowered

24
Q

Which extreme of power dynamic is typically focussed around a rational strategy approach?

A

Traditional

Empowered approach has a more collective and emergent approach

25
Q

4 core forces which are continually impacting the organisation and its stakeholders

A

The law (UK, EU, worldwide)

Best practice (codes, customer expectations, industry norms)

Societal expectation (avoiding media criticism)

Visibility - dichotomy which exists between what we are willing to reveal about an organisation, and its strategic direction

26
Q

Simple definition of risk

A

Any circumstance with more than one possible outcome

27
Q

Is risk management important for a business? (good for exam)

A

Risk management is a critical aspect of any business. All companies must consider and
be explicit on their risk appetite, processes, and management. This includes having
backup options for business continuity planning.

28
Q

Two possibilities for risk appetite

A

Risk averting

Risk seeking

29
Q

A risk averse person (or group): (3)

A
  • Looks for certainty of outcome (preferring facts to theories)
  • Prepared to sacrifice opportunities that might exist for change
  • May be intolerant to challenge
30
Q

A risk seeking person (or group): (3)

A
  • Accepts that life is full of options and uncertainty (preferring imagination to facts)
  • Has confidence using their abilities to counter whatever they may face
  • May dismiss the realities that confront them
31
Q

Define risk capacity

A

Maximum level of risk that can be taken

32
Q

5 perspectives (types) of organisational risk (with examples)

A

Financial - gearing considerations

Operational - supplier/customer issues damaging reputation

Competition - losing market share often as a result of reputational damage

Environment - tax affairs of entities damaging reputation

People - behaviour/words of leaders

33
Q

4 aspects of risk control

A

KPIs
A risk register
A risk matrix
Balanced scorecard (has many uses asides from risk)

34
Q

What does a risk matrix measure (2 axis)

A

Severity (impact)
Probability (likelihood)

35
Q

What are the two options for risk matrix?

A

3x3 (low, medium, high severity and likelihood)

5x5 (severity and likelihood will be graded 1-5)

36
Q

Disadvantage of risk matrix - how to mitigate

A

Ignores timeframe or indication of basis of data that has been used to produce it.

Useful to use risk register as well which will provide more detailed info

37
Q

On what would risks be listed, categorised and weighted

A

A risk register

38
Q

Three dimensions (stages) of risk management

A

Identification
Evaluation
Mitigation

39
Q

Define reputation

A

The beliefs or opinions that are generally held about someone or something

Le Go (21 decks)

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