Brainscape's Knowledge GenomeTM


Top Flashcards (Certified)
All Flashcards

M92 > Company Structure & Management > Flashcards

Company Structure & Management Flashcards

1
Q

Proprietary companies

A

These have authorised and issued share capital to which shareholders subscribe. Profits belong to sharcholdes after provisions for expenses and reserves. Shareholder liability is limited to their share amount

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

Mutual companies

A

Insurance companies that have no share Capital stock & are owned by the policy holders

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

Takaful insurance

A

Roots in Islamic Financial service industry. Designed to meet needs of religious group. These policies do not include uncertainty gambling or interest & no profit is made. Takaful Insurance products need to be approved by Islamic scholars to ensure complaince

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

Facultative reinsurance

A

Reinsurance purchased on a specific policy

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

Composite insurance company

A

Transact both life & general insurance

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

Proprietary insurer

A

Authorised and issued share capital to which the original shareholders are subscribed. Shareholders’ liability is limited to the value of their shares, the company is liable for its debts and if solvency margin cannot be met the company risks of insolvency.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

Demutalisation

A

Process of turning a mutual to proprietary company. This must be done to raise share capital

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Syndicates

A

Members of the Loyd’s market place that underwrite for their own profit and loss

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Managing agents

A

Appointed by underwriting members to carry out business on their behalf

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Incentives of captives

A

• Obtain full benefits of groups risk control techniques by paying premiums based on loss experience
• avoidance of insurers overheads
• obtain a lower overall risk premium level by purchasing reinsurance at cheaper lower costs
• to achieve risk financing objectives

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

Reinsurance treaty

A

The reinsurer agrees to part of all insurances that the direct insurer underwrites

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

Multinational Company

A

A company that operates in a number of countries but has one home base. The aim is to have the ability to respond to local demands as the business is a semi-independent operation all working under the global brand

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

Global company

A

Where the company sees the whole world as one potential market. Very centralised business but one common brand e.g. Lloyd’s

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

Requirements for an international insurance market

A

• Political & economic stability
• Good geographical location
• Quality transport system
• Highly qualified personnel
• English as a business language
• Stable legal & regulatory environment
• Good time zone
• Foreign presence
• Developed financial centre

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

Customer Relationship Management (CRM)

A

Using info about customers to create sales and marketing strategies that develop and sustain desirable customer relationships

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

Business ethics

A

Standards & moral conduct that a business sets itself in its dealings both within and outside the organisation as a whole

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

Shareholder focus

A

Society is capable of looking after itself and the key responsibility of the business is to its shareholder

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

Stakeholder perspective

A

It is in the business and shareholders long-term interest to play a role in society beyond what is required by law

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

CII code of ethics

A

-Comply with the code and all relevant laws and regulations
-Act with the highest ethical standards and integrity
-Act in the best interest of each client
-Provide a high standard of service
-Treat people fairly regardless of; age, disability, gender, pregnancy, marriage, race, religion, sex and sexual orientation

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

Organic growth

A

Where a company develops and expands by increasing sales revenue and output through its own business activities rather than through mergers & acquisitions

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

Benefits of organic growth

A

• Increasing consumer incomes
• Ready availability of finance
• Low interest rates
• Buoyant markets
• Opportunities to develop products
• Export opportunities
• Economies of scale
• Increased revenue, profits and shareholder value

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

Organic growth drivers

A

• A sound means to measure progress and success
• More profitable rate with better investment return
• Enables executive management to demonstrate long term commitment to a business by building it with internal resource
• Management can fully focus on growing the business and achievement of goods and not be distracted by a merger or acquisition

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
23
Q

Horizontal merger

A

The combination of two or more firms competing in the same space with the same goods or services.
• Improve a mediocre performance to a better market position
• Achieving economies of scale
• Improving competitiveness
• Possible opportunities for diversification

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
24
Q

Vertical merger

A

When a company is trying to control a stage either closer to the source of the manufacturer or close to the source of the customers
• Reduce costs through economies of scale
• Gain more control of the market
• Add greater value to the customer

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
25
Merger
Two firms agree to join forces on a strategic basis
26
Acquisition
A company gains control by purchasing a majority shareholding
27
Reasons for M&A
• Growth • Efficiency and improved performance • Overcoming the costs of IT by sharing resources • Provides investment capital if insurer has spare capital • Spread risk
28
Disadvantages of M&A
• Reduced customer choice through reduction in number of organisations offering products to customers • Impact on staff and potential redundancies • Clash of corporate culture • Reduced customer service while changes are implemented • Expected savings not realised
29
Outsourcing
The use of skilled resources outside the company to handle work previously done in house
30
Advantages of outsourcing
• Business is guaranteed a certain level of service as set out in the contract • The business can budget for pre agreed fixed costs • Outsourcing companies are usually specialists and will bring new skills and working methods to the company
31
Disadvantages of outsourcing
• Business could loose customers and suffer reputational damage due to poor service standards • The business could became dependent then have issues long term • Care needs to be taken with customers confidential information and any mistakes are the responsibility of the business • Control and direction is lost
32
Executive Director
Works full time for the business and is given Management responsibilities for running parts of the business
33
Non-executive director
Part-time work with the business chosen for their expertise
34
Responsibilities of the board
• Regulation of executive directors and other members of Senior management to ensure they uphold shareholder interests and the law. • approves reports, accounts, annual budgets, strategy etc • selecting apprising & rewarding the CEO and ensuring succession plans are in place • overseeing risk management & ensuring necessary mitigations are implemented • ensuring integrity & principles are upheld on critical matters like financial reporting accuracy, regulatory compliance and ethical standards
35
Corporate governance
Stringent regulation that determine the way by which companies (especially public companies) are controlled internally through the board and executive management
36
UK corporate governance code
Sets out UK standard practice in relation to issues such as • board composition and development • remuneration • accountability and audit • relations with shareholders
37
Roles of CEO
• Formulate company objectives and policy • organise resource to translate board policy into operational policy • lead the organisations structure and management style • responsible for business functions and day to day activities
38
Roles of the financial director
• Responsible for economic model which helps set capital requirements • scenario & stress testing to determine extreme risk • propose to board forms of capital to hold in addition to share capital • prepare board papers to assist in calculating dividends • recommendations on appropriate capital levels of claims provisions to hold • prepare accounts for board approval • support investment analysts on reports on company performance and holders of company debt • preparation of content for PRA and PRA main contact • prepare management information on financial performance • manage debt cash flow liquidity and treasury matters • manage investment portfolio • manage financial aspects of planning such as budget and forecast • prepare for rating agency reviews and audits • management of reinsurance accounting process
39
Company Secretary
Ensures all administrative and legal requirements are fulfilled by the company. All public companies must have one as a result of the Companies Act 2006
40
Chief actuary responsibilities
• technical pricing of new & existing products • calculation of claims reserves • calculation of risk-based capital requirements • assessment of investment risk for funds supporting technical reserves
41
Other Senior positions
Chief risk officer Head of internal audit Underwriting director Claims director Marketing director Head of HR Head of IT Strategy director Investment director
42
Management actions
Planning Organising Leading Controlling
43
Business components
Physical resources Financial resources Human resources
44
Individual managers roles
• hiring & staffing • training, coaching and developing employees • dealing with performance issues and dismissal • support problem resolution and decision making • conducting timely performance evaluations • translating corporate goals into functional and individual goals • monitoring performance and initiating action to strengthen results • monitoring and controlling expenses and budgets • monitoring performance and taking action to strengthen results • tracking and reporting scorecard results to senior management • planning and goal setting for future
45
Characteristics of effective internal communication
Accurate Clear Relevant Reliable Credible Timely
46
Barrier to effective communication
Organisation size Natural reserve/fear/lack of confidence Knowledge is power Language Time Training The grapevine Failure to see the need Inability to listen
47
Benefits of effective communication
•Bring change in culture & structure of a business faster •Reduce employee turnover •Facilitate and improve decision making by including employees •Encourage cooperation and innovation •Ensure all relevant staff are helping to meet corporate objectives
48
Action centred leadership (ACL)
Widely used model for effective leadership. Three key areas of team leaders' effectiveness; •The task •The team •The individual
49
Open door Management
Managers are approachable at all times
50
Autocratic Management
Control & power rests with a single individual, usually the chief executive
51
Paternalistic Management
The company looks after its employees In a fatherly way, employees respect the company managers in the way a child respects their parents. This style is sometimes too interfering
52
Militaristic/hierarchical Management
Management is structured in a formal way, with clear job demarcations
53
Democratic/consultative Management
Decisions are taken with prior reference to as many employees as possible
54
Chaotic/laissez-faire Management
A more modern style of management. The Manager is a mentor and the employees are allowed to let their own ideas and creativity flourish in specific areas
55
Setting a strategic business plan
Needs to cover key areas that allow for company objectives to be to be achieved, including: • setting objectives • identify what needs to bedone to achieve objectives • creating appropriate organisation structure • allocating responsibilities to senior managers • agreeing consistent management styles • agreeing and setting budgets • agreeing staff incentives • setting sales targets • planning most efficient use of resources • setting timetables and deadlines • identifying contingency plans
56
Implementing business plans
Pleas are created for each division Project or operational area & should include: • SMART objectives (specific, measurable, achievable, relevant and time defined) • strategy for achieving objectives • specific activities that will be done • allocation of responsibility for each activity • specific estimates of resource requirements for the implementation period • expected cost • expected result
57
The budgeting process
• Guidelines from CEO • consultation & preparation • review by budget committee • communication • monitoring
58
Top-down budgeting
Owners/directors decide on the individual plans for each department and function and these plans are given to the individual managers for implementation
59
Bottom-up budgeting
Individual manages construct their own budgets within set guidelines. These are then passed up to managers & directors who incorporate individual budgets into the organisations master budget
60
Fixed budget
Does not change once it has been set, regardless of company's performance. Projected figures gre compared to actual figures at the end of the year
61
Flexible budget
Changes in accordance with actual company performance
62
Zero-based budgeting
Managers justify expenditure from zero. Any amount they subsequently decide must be justified through a formal process. This process is completed by Senior manages rather than department budget-holders. Usually employed in research or legal teams
63
Rolling budgets
Budgets that constantly look forward. As you come to the end of a month a new month is added on to the rolling period e.g. 12 months. Managers are always looking ahead and alterations to future budgets are made regularly
64
Budget variance
Difference between actual & budgeted performance
65
Types of variance
Unfavourable: budgets not met (preventative action needs to be implemented) Favourable: budgets are exceeded
66
Causes of variance
• Inadequate pricing • Higher expenses than planned • Random events • Operating efficiency
67
Five C's of decision making
Consider Consult Crunch Communicate Check
68
Strategic information
Used by Senior Management to plan the objectives of their organisation and to assess whether objectives are being met
69
Tactical information
Used by middle managers to ensure that resources of the business are employed to achieve the strategic objectives of the organisation
70
Operational information
Used by front-line managers like supervisors to ensure specific tasks are planned and carried out properly
71
Management information systems (MIS)
Database of Financial information used to produce regular reports on operations for every level of management. Gives managers feedback on their own performance and enables senior management to monitor the company as whole
72
Features of Management Information System
•Information flows horizontally and vertically •Centre core of data is likely tactical info for management control, but subsystems have operational and strategical data too •The control cycle (comparison of actual results v plan) requires that the plan is carefully prepared •Precise and well drawn up specification of areas of management responsibilities is essential •Information produced must be able to measure actual v plan results in a way that control decisions can be taken at all levels
73
Knowledge management
Compilation and redistribution of an organisations collective skills and experience for the benefit of the organisation as a whole
74
Codification strategy
Knowledge is carefully codified and stored in a database where it can be accessed and used easily by appropriate employees
75
Personalisation strategy
Knowledge is closely tied to the person who developed it and is shared person to person and through training courses. Computers are used purely for communicating not storing knowledge
76
Main role of audit committees
•Monitor integrity of Financial statements •Review internal Financial controls •Monitor & review effectiveness of internal audit function •Make recommendations to board e.g. appointment of external auditor •Review external auditors independence, objectivity and effectiveness •Develop and implement policy on external audit supplying non audit services •Report to board matters where action or improvement is needed and recommended next steps
77
Listing rules
Rules for listed companies administrated by the FCA. Dictates matters such as contents of prospectus for a company seeking listing and on going obligation such as disclosure of price sensitive information
78
Companies House
Three statutory functions: •Incorporate and dissolve limited companies •Examine and store information delivered under the companies act and related laws •Make info public
79
Companies listed on the London stock exchange must follow which reporting standard?
International Financial Report Standards (IFRS)
80
3 things most financial accounts will include
Income statement Balance sheet Directors repot
81
First line of defence
Once a risk strategy is set it is primarily the responsibility of front line manages to ensure risks are identified and controlled in keeping with the strategy and control environment
82
Second line of defence
The risk management department will be actively involved in discussing the best control to be put in place, accountability for the delivery of risk control remains with the operational management
83
Third line of defence
The internal audit team has the responsibility of reviewing the overall risk management operation. Auditing both front line managers and the effectiveness of the risk management department
84
4 key risk categories for insurance companies
Strategic Underwriting & reserving Investment / market Credit
85
Statutory external audit
Under the companies act 2006 external audit must be conducted by an approved entity and a report to shareholders published. Companies with 2 of the following require external audit: •Turnover > £10.2m •Net assets > £1.2m •More than 50 employees
86
Benefit of internal audit
•Maintain a sound system of internal controls •Reviewing board reports to ensure they show a balanced and understandable viewpoint •Ensure directors are up to date with new accounting & auditing issues e.g. International accounting standards •Communicating with external auditors and ensuring a unified approach to work and that the board receive the correct information
87
Role of compliance
Ensure that processes and activities are carried out in compliance with established operational procedures and meet requirements of regulators
88
GDPR (General Data Protection Regulation)
New EU law on data protection and privacy for individuals
89
Data controller
Someone who determines why and how personal data is processed
90
Data processor
Someone who processes data on behalf of a data controller
91
Data Protection principles
1. Personal data shall be processed fairly & lawfully 2. Personal date shall be obtained only for a specified and lawful purpose and should not be processed in any manor incompatible with that purpose 3. Personal data should be adequate relevant and not excessive 4. Personal data shall be accurate and where necessary up to date 5. Personal data shall only be kept for as long as is necessary 6. Personal data shall be processed in accordance with the rights of data subjects
92
Rights of data subjects under GDPR
The right to be informed The right of access The right of rectification The right of erasure The right to restrict processing The right to data portability The right to object Rights relating to automated decision making and profiling
93
Strategy team
Undertake projects for the Senior executives on new areas of business or perhaps look into expansion and development of existing business lines on operations
94
SWOT analysis
Strengths Weaknesses Opportunities Threats
95
Strategy team activities
Mergers & acquisitions Classes of business Geographical spread Partnerships Outsourcing Advertising & marketing Broker or direct Time horizons Business planning
96
Coverholder
The party whom authority has been delegated to
97
Binding authority
Sets out the scope and extent of the authority delegated to the coverholder
98
Role of claims team
To ensure that when claims are made the policyholder receives fair and equitable settlement, in accordance with the contractual obligations of the policy
99
Marketing team roles
•Market research •Competitor research •Customer profiling, target markets and segmentation •Develop strategic and operational marketing plan •Advertising •Media relations •Public relationships and sponsorship •Product development •Relationship management including sales management and customer service
100
Pre-transactional customer service
Customer service mission statement, staff training, complaints handling process and preparation of warranties
101
Transactional customer service
Managing customer service demand patterns, timing and monitoring levels of customer service delivery
102
Post-transactional customer service
Claims handling service, handling complaints and cross-selling
103
Risk Management Standard
Identifying strategic objectives Risk identification Risk analysis Risk reporting Monitoring & iteration
104
Risk register
Centralised data source on all known risks, kept up to date by the risk management department. Significant finds are reported. Risks are assessed as inherent or residual and rated from 1-15. They are assigned a Red (9-15) Amber (5-8) or Green (1-4) colour based on impact and probability
105
Compliance roles
•Communicate all regulatory requirements to employees and update on any changes •Regulator point of contact •Ensure all procedures are followed on every sale •Carry out anti money laundering and fraud procedures •Ensure credit checks are carried out •Deal with complaints fairly •Develop new procedure and audit existing procedure •Ensure all staff in controlled functions are Approved Persons •Regular reporting on compliance performance and any breaches •Create and maintain compliance manual
106
Typical recruitment process
Sign off Recruitment Interview Job offer Induction
107
Facilities Management
Responsible for obtaining and maintaining adequate workspace and equipment, office procurement, may be involved in business recovery planning and arrangements

M92 (5 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2025 Bold Learning Solutions. Terms and Conditions