E3 - 5. Governance and Ethics

Question 1

What are the 4 main aims of good corporate governance?

Answer 1

1. Disclosure to stakeholders
2. Legal and ethical running of the company
3. Provide confidence to investors
4. Increased transparency at board level

Question 2

What are the 5 key principles of good corporate governance?

Answer 2

1. Leadership
2. Effectiveness (balance)
3. Accountability
4. Transparent Remuneration
5. Relations with shareholders

Question 3

What are the 4 ethical stances, according to Johnson, Scholes and Whittington?

Answer 3

1. Short Term Shareholder
2. Long term shareholder
3. Multiple stakeholder
4. Shaper of society

Question 4

What are 4 internal safeguards an organisation can put in place to maintain ethical behaviour?

Answer 4

1. Ethical, open culture
2. Tone from the top
3. Audit department monitoring
4. Disciplinary producers

Question 5

What are 3 external safeguards an organisation can put in place to maintain ethical behaviour?

Answer 5

1. Corporate governance regulations
2. Education, training and experience requirements for CIMA members
3. Professional monitoring

Question 5

What are the 4 steps of conflict resolution?

Answer 5

1. Consider ethical issues
2. Analyse in context of fundamental principles
3. Internal procedures
4. Alternative solutions - Consult Internally/Ask CIMA/seek counsel/Cut off/CEASE WORK

Question 6

What is a company mission?

Answer 6

Why we do what we do

Question 7

What are the 4 main challenges in objective setting?

Answer 7

1. Need for congruence between strategy and objectives
2. Conflicting objectives can arise
3. Financial and non financial objectives
4. Different stakeholder interests